SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2004
                         Commission file number 0-23044

                               MOTIENT CORPORATION
             (Exact name of registrant as specified in its charter)

                  DELAWARE                            93-0976127
      (State or other jurisdiction of              (I.R.S. Employer
       incorporation or organization)             Identification No.)

                            300 Knightsbridge Parkway
                             Lincolnshire, IL 60069
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (847) 478-4200

             Securities registered pursuant to Section 12(b) of the
               Act: None Securities registered pursuant to Section
                                12(g) of the Act:
                     Common stock, $0.01 par value per share

                                (Title of class)

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 report(s), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. Yes [ ] No [X]

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

The aggregate market value of shares of common stock held by non-affiliates at
June 30, 2004 was approximately $200,051,042.

Indicate by check mark whether registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes [ ] No [X]

Number of shares of common stock outstanding at March 15, 2005: 65,144,383

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None


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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
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                                                                                              Page

                                     PART I
<S>                                                                                          <C>
Cautionary Note Regarding Forward-Looking Statements                                            3
Item 1.     Business                                                                            4
Item 2.     Properties                                                                         31
Item 3.     Legal Proceedings                                                                  32
Item 4.     Submission of Matters to a Vote of Security Holders                                32

                                     PART II

Item 5.     Market for Registrant's Common Equity, Related Stockholder Matters
            and Issuer Purchases of Equity Securities                                          33
Item 6.     Selected Financial Data                                                            36
Item 7.     Management's Discussion and Analysis of Financial Condition and                    40
            Results of Operations
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk                         70
Item 8.     Financial Statements and Supplementary Data                                        70
Item 9.     Changes in and Disagreements with Accountants on Accounting and                    70
            Financial Disclosure
Item 9A.    Controls and Procedures                                                            70
Item 9B.    Other Information                                                                  72

                                    PART III

Item 10.    Directors and Executive Officers of Motient                                        73
Item 11.    Executive Compensation                                                             77
Item 12.    Security Ownership of Certain Beneficial Owners and Management and                 81
            Related Stockholder Matters
Item 13.    Certain Relationships and Related Transactions                                     84
Item 14.    Principal Accountant Fees and Services                                             86

                                     PART IV

Item 15.    Exhibits and Financial Statement Schedules                                         87

Signatures                                                                                     96
Financial Statements Motient                                                                  F-1
Financial Statements MSV                                                                      M-1
</TABLE>



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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements regarding
our expected financial position and operating results, our business strategy and
our financing plans are forward-looking statements. These statements can
sometimes be identified by our use of forward-looking words such as "may",
"will", "anticipate", "estimate", "expect", "project", or "intend". These
forward-looking statements reflect our plans, expectations and beliefs and,
accordingly, are subject to certain risks and uncertainties. We cannot guarantee
that any of such forward-looking statements will be realized.

Statements regarding factors that may cause actual results to differ materially
from those contemplated by such forward-looking statements, or cautionary
statements, include, among others, those under the captions "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Overview" and "Risk Factors," and elsewhere in this report, including in
conjunction with the forward-looking statements included in this report. All of
our subsequent written and oral forward-looking statements (or statements that
may be attributed to us) are expressly qualified in their entirety by the
cautionary statements referred to above and contained elsewhere in this report.
You should carefully review the risk factors described in our other filings with
the SEC from time to time, including our quarterly reports on Form 10-Q which
will be filed in the future, as well as our other reports and filings with the
SEC.

Our forward-looking statements are based on information available to us today,
and we do not undertake any obligation to update these statements. Our actual
results may differ significantly from the results discussed.



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                                     PART I
                                     ------



Item 1. Business.
-----------------

Overview

We are a nationwide provider of two-way, wireless mobile data services and
wireless internet services. Owning and operating a wireless radio data network
that provides wireless mobile data service to customers across the United
States, we primarily generate revenue from the sale of airtime on our network
and from the sale of communications devices, which are manufactured by other
companies. Our customers use our network and our wireless applications for
wireless email messaging and wireless data communications services. This enables
businesses, mobile workers and consumers to wirelessly transfer electronic
information and messages and to wirelessly access corporate databases and the
Internet. Our network is designed to offer a broad array of wireless data
services, such as:

o    two-way mobile Internet services, including our own eLink(SM) wireless
     email service and our BlackBerry(TM) by Motient wireless email service,
     each providing personal consumers and corporate customers with wireless
     access to a broad range of email and information services;

o    wireless data systems used by companies involved in data transmission and
     processing, used to connect remote equipment, such as wireless
     point-of-sale terminals, with a central monitoring facility; and

o    mobile data and mobile management systems used by transportation and other
     companies to wirelessly coordinate remote, mobile assets and personnel.

Our eLink service and BlackBerry by Motient service are two-way wireless email
services that use our DataTac network. They allow users to remotely and
wirelessly access their email, and allow users to synchronize the calendar and
organizer functions of their desktop computer with a handheld device such as a
RIM 850 or 857 Wireless Handheld, a small, data-only wireless handheld device.
Research In Motion, Ltd., or RIM, has discontinued making these models, and
therefore sales of these devices have declined recently and we anticipate sales
of these devices will continue to decrease. Motient cannot use any newer RIM
devices on our network and currently has no alternative product for these
services. However, current users of eLink and BlackBerry by Motient may still
continue to use their devices on our network. We currently are exploring
different ways to provide similar wireless email services to our customers using
iMotient Solutions(TM), which we discuss below.

In addition to selling wireless data services that use our own network, we are
also a reseller of airtime on the Cingular and Sprint wireless networks. We have
reseller agreements with these companies that allow us to sell and promote
wireless data applications and solutions to our customers using these networks,
which are more modern and have greater capacity than our own, while still

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maintaining a direct relationship with the customer, since "back office"
functions like customer support, application design and implementation, and
billing, among other support services, are handled by Motient.

These arrangements allow us to provide integrated wireless data solutions to our
customers using a variety of networks. In December 2004, we launched a new set
of products and services designed to provide these integrated wireless data
solutions to our customers called iMotient Solutions(TM). iMotient allows
Motient's customers to use these multiple networks via a single connection to
Motient's back-office systems, providing a single alternative for application
and software development, device management and billing across multiple
networks, including but not limited to GPRS, 1XRTT, and our own DataTac network.
Once connected to iMotient, customers will receive our proprietary applications
and services that reduce airtime usage, improve performance and reduce costs. As
of February 1, 2005, we have not generated any revenues from iMotient Solutions,
however, we have recently signed customer agreements and anticipate generating
revenue in the near term.

As of March 15, 2005, Motient's terrestrial wireless two-way data network covers
a geographic area populated by more than 195 million people and is comprised of
over 1,200 base stations that provide service to 412 of the nation's largest
cities and towns, including all primary metropolitan statistical areas, commonly
known as "MSAs". Subscriber units, which may be mobile or stationary, receive
and transmit wireless data messages to and from these terrestrial base stations
via radio frequencies. Terrestrial messages are then routed to their destination
via data switches that Motient owns, which connect to the public data network.
Motient's network is a wireless packet-switched network based on technologies
developed prior to newer networks built around CDMA or GSM technologies, and,
unlike those networks, cannot accommodate wireless telephony. Over the course of
2004, Motient implemented and completed certain initiatives to rationalize the
size of its network, primarily to remove unprofitable base stations and reduce
unneeded coverage.

During the first quarter of 2005, Motient initiated a plan to refocus its
DataTac network primarily on the top 40 MSAs. This plan involves the
decommissioning of DataTac network components and termination of service in
previously served MSAs other than the top 40. Given the similar coverage
profiles of the Cingular and Sprint networks, the significantly increased
bandwidth capabilities of these networks relative to DataTac and the
concentration of our revenues in the top 40 MSAs, we determined that this plan
best allowed us to match our network infrastructure costs with our revenue base,
while continuing to meet the needs of as many of our customers as possible. We
have notified our customers of this change in our network coverage and this
decommissioning will begin on June 1, 2005. We are making every effort to
provide any impacted customers with alternatives to migrate their services and
applications either to our new iMotient Solutions(TM) platform, or to other
networks using our agreements with RACO Wireless, Inc. and eAccess Solutions,
Inc. Our 800 MHz FCC licenses for these discontinued markets may be lost as a
result of these actions. While we are taking steps to avoid this possibility,
and while we believe that any such losses would not be material to our
business, we can provide no assurance that any such losses would not negatively
impact our business. We believe that the value of our FCC licenses in these
smaller markets is very small compared to the value of our FCC licenses in the
top 40 MSAs.

As of December 31, 2003 and 2004, there were approximately 204,000 user devices
and 132,000 user devices registered, respectively, and 115,000 user devices and


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77,000 user devices, respectively, with active usage on Motient's network.
Registered devices represent devices that our customers and resellers have
registered for use on our network. These devices may be kept in inventory by our
customers for future use, in which case they are not generally revenue
producing. We count a device as active when it is removed from inventory by the
customer and transmits data traffic.

In the fourth quarter of 2004, we performed an analysis of our registered user
devices from our larger resellers, which represent a majority of our registered
user devices not in service. Given the decline in our wireless internet base in
2004, the end-of-life of the RIM 857 devices and the general availability of
next-generation devices that were voice capable from wireless carrier such as
T-Mobile and Verizon, we determined that many of the devices registered by our
resellers on our network were not likely to be put back in service on our
network. As a result, during the fourth quarter of 2004 and the first quarter of
2005 approximately 39,000 user devices were deregistered from our network, of
which approximately 30,000 were de-registered by SkyTel Communications, Inc. on
December 30, 2004. The de-registration of these user devices did not impact our
revenue or our billable and active user devices and we believe that our
registered device counts now provide a more accurate representation of user
devices held in inventory by our customers that may be put back in service by
our customers in the future.

Our website is www.motient.com.

Management and Board Changes Since January 1, 2004

On March 4, 2005, the board of directors elected Barry A. Williamson to serve as
a member of the board.

On February 28, 2005, Peter Aquino resigned from the board of directors.

On June 15, 2004, the board of directors designated Raymond L. Steele and
Jonelle St. John as the board's financial experts.

On May 24, 2004, the board of directors designated Myrna J. Newman, the
Company's controller and chief accounting officer, as the principal financial
officer of the Company.

Also on May 24, 2004, the board of directors elected Christopher W. Downie to
the position of executive vice president, chief operating officer and treasurer.
Mr. Downie remains the principal executive officer.

On May 6, 2004, the board of directors elected Raymond L. Steele to serve as a
member of the board. They also elected him to the Company's Audit Committee.

On May 6, 2004 the board of directors elected Robert L. Macklin to the position
of general counsel and secretary.

On March 18, 2004 the board of directors elected Christopher W. Downie to the
position of executive vice president, chief financial officer and treasurer, and
designated Mr. Downie as the Company's principal executive officer.


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<PAGE>

On February 18, 2004, Daniel Croft, senior vice president, marketing and
business development, and Michael Fabbri, senior vice president, sales, were
relieved of their duties as part of a reduction in force.

On February 10, 2004, our board of directors and Walter V. Purnell, Jr. mutually
agreed to end his employment as president and chief executive officer of Motient
and all of its wholly owned subsidiaries. Concurrently, Mr. Purnell resigned as
a director of such entities and of Mobile Satellite Ventures L.P., or MSV, and
all of its subsidiaries.

History

Motient was formed in 1988 under the name "American Mobile Satellite
Corporation" to construct, launch and operate a mobile satellite services system
to provide a full range of mobile voice and data services via satellite to land,
air and sea-based customers subject to local regulation. During 1995, we
successfully launched our first satellite and initiated commercial voice
service. In late 1996, we expanded our mobile data business through the
acquisition of Rockwell International Corporation's dual mode mobile messaging
and global positioning and monitoring service for commercial trucking fleets.

In March 1998, we acquired Motient Communications, formerly ARDIS Company, from
Motorola and combined the ARDIS terrestrial-based business with our
satellite-based business to offer a broad range of integrated end-to-end
wireless solutions through two network configurations, either a "satellite-only"
service network or a "multi-mode" terrestrial and satellite service network.

Following operation of a joint network for three years, we decided to base our
business primarily on the terrestrial network and make the satellite available
to a joint venture. Motient's satellite and related assets and business were
sold on November 26, 2001 to MSV.

Mobile Satellite Ventures

Business

MSV is a provider of mobile satellite-based communications services. MSV uses
two satellites to provide service, which allow customers access to
satellite-based wireless data, voice, fax and dispatch radio services almost
anywhere in North and Central America, northern South America, the Caribbean,
Hawaii and in various coastal waters.

MSV is also developing a next-generation system, a hybrid satellite/terrestrial
wireless network over North America that MSV expects will utilize new satellites
working with MSV's patented "ancillary terrestrial component" technology. MSV
will be able to deploy terrestrial two-way radio network technology in thousands
of locations across the United States, allowing subscribers to integrate
satellite-based communications services with more traditional land-based
wireless communications services. MSV is headquartered in Reston, VA, with an
office in Ottawa, ON, Canada.


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<PAGE>

MSV is structured as a limited partnership, of which Motient is one of the
limited partners. Motient holds a proportionate ownership interest in the
corporate general partner. Motient has certain rights to appoint directors to
the sole general partner of the limited partnership, but does not have any
direct or indirect operating control over MSV. As of March 1, 2005, we have a
49% direct and indirect interest in MSV.

History

On June 29, 2000, we formed a joint venture subsidiary, MSV, with certain other
parties, in which we owned 80% of the membership interests. The remaining 20%
interests in MSV were owned by three investors unrelated to Motient. However,
the minority investors had the right to participate in certain business
decisions that were made in the normal course of MSV's business. Therefore, in
accordance with Emerging Issues Task Force Issue No 96-16, "Investor's
Accounting for an Investee When the Investor Has a Majority of the Voting
Interest but the Minority Shareholder or Shareholders Have Certain Approval or
Veto Rights", our investment in MSV has been recorded for all periods presented
in the consolidated financial statements included in this annual report pursuant
to the equity method of accounting.

Through November 2001, MSV used our satellite network to conduct research and
development activities. On November 26, 2001, we sold the assets comprising our
satellite communications business to MSV. In consideration for our satellite
business assets, we received the following:

o    a $24.0 million cash payment in June 2000;

o    a $41.0 million cash payment paid at closing on November 26, 2001, net of
     $4.0 million retained by MSV related to our sublease of real estate from
     MSV; and

o    a five-year, $15.0 million note.

In this transaction, TMI Communications and Company, Limited Partnership, or
TMI, a Canadian satellite services provider, also contributed its satellite
communications business assets to MSV. In addition, Motient purchased a $2.5
million convertible note issued by MSV as part of this transaction, and certain
other investors, including a subsidiary of Rare Medium, purchased a total of
$52.5 million of MSV convertible notes. On August 12, 2002, we purchased an
additional $957,000 of MSV convertible notes. At December 31, 2002, on a fully
diluted basis, Motient owned approximately 25.5% of the equity of MSV, assuming
certain other investors fully exercised their option to make additional
investments in MSV as a result of the FCC's ATC approval process described more
fully below.

On August 21, 2003, two investors in MSV (excluding Motient) invested an
additional $3.7 million in MSV in exchange for Class A preferred units of
limited partnership interests in MSV. MSV used the proceeds from this investment


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to repay other indebtedness that was senior in its right of repayment to
Motient's promissory note. Under the terms of the amended and restated
investment agreement, these investors also had the option of investing an
additional $17.6 million in MSV.

On April 2, 2004, an additional $17.6 million investment in MSV was consummated.
Of the proceeds, $5.0 million was used to repay certain outstanding indebtedness
of MSV, including $2.0 million of accrued interest under the $15.0 million
promissory note issued to Motient by MSV. The remainder of the proceeds from
this investment was used for general corporate purposes by MSV. Motient was
required to use 25% of the $2 million it received in this transaction, or
$500,000, to make prepayments under its existing notes owed to Rare Medium
Group, Inc. and Credit Suisse First Boston. As of the closing, Motient's
percentage ownership of MSV was approximately 29.5% (assuming conversion of all
outstanding convertible notes).

On November 12, 2004, we acquired approximately 5.4 million MSV limited
partnership units, and a corresponding number of shares in MSV's general
partner, Mobile Satellite Ventures GP Inc. ("MSV GP"). These units consist of
4.2 million units purchased for $125 million in cash and 1.2 million units
received for the cancellation of our $15 million principal note (and all accrued
interest thereon) issued by MSV and the conversion of $3.5 million of
convertible notes issued by MSV (including the cancellation of the accrued
interest on such convertible notes). In connection with our investment, the
other limited partners of MSV exchanged their outstanding notes (but not
generally the accrued interest thereon), and one limited partner contributed an
additional $20 million of cash, for limited partnership units and a
corresponding number of MSV GP shares. Such investments and conversions
increased Motient's ownership of MSV from 29.5% (assuming conversion of all
outstanding convertible notes) to 38.6%.

On February 9, 2005, Motient entered into a merger agreement with Telcom
Satellite Ventures Inc. and Telcom Satellite Ventures II Inc. and simultaneously
consummated the transactions contemplated thereby, pursuant to which Telcom
merged with and into MVH Holdings Inc., a direct and wholly-owned subsidiary of
Motient, in a tax free reorganization in which MVH is the surviving company. In
exchange for 2,296,835 MSV limited partnership units held by the Telcom
entities, Motient issued to Telcom's stockholders 8,187,804 shares of its common
stock.

Concurrently with this merger, Motient (through MVH) also purchased 373.7 shares
of common stock of Spectrum Space Equity Investors IV, Inc. and two other
related entities, representing approximately 66.3% of the outstanding common
stock of each of such entities, and 221.2 shares of common stock of Columbia
Space Partners, Inc. and two other related entities, representing approximately
27.8% of the outstanding common stock of such entities. In total, Motient issued
to the Spectrum entities and Columbia entities a total of 4,516,978 shares of
Motient common stock in a private placement in exchange for indirect ownership
through the Spectrum and Columbia entities of 1,267,098 MSV units.


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At the consummation of these transactions, Motient's direct and indirect
ownership of MSV was approximately 49%. Motient does not control MSV and
accounts for its investment under the equity method.

MSV's Next-Generation Communications System: ATC

In February 2003, the FCC adopted an order governing ancillary terrestrial
component, or ATC, technology, giving mobile satellite operators broad authority
to use their assigned spectrum to operate an ATC. ATC technology allows a
wireless provider to use satellite communications technology in conjunction with
more traditional land-based wireless communications technologies, allowing a
user to utilize a signal from both satellite and terrestrial locations,
depending on a variety of technical and cost concerns. ATC can enhance satellite
availability, efficiency and economic viability by terrestrially reusing at
least some of the frequencies that are allocated to the satellite systems. An
appeal of this decision has been filed before a federal court. We cannot predict
the outcome of this pending appeal.

Without ATC, it may be challenging for mobile satellite systems to reliably
serve densely populated areas, because the satellite's signal may be blocked by
high rise structures and may not penetrate into buildings. As a result, the
satellite spectrum may be underutilized or unused in such areas. The use of ATC
retransmission can reduce or eliminate this problem.

The ATC Order established a set of preconditions and technical limits for ATC
operations, as well as an application process for ATC approval of the specific
system incorporating the ATCs that the licensee intends to use. On November 18,
2003, MSV filed an application with the FCC to expand the use of its L-band
spectrum and construct its next-generation hybrid network with ATC. On November
8, 2004 the FCC issued an order granting MSV the first ATC license ever granted
by the FCC. The FCC also approved several of MSV's waiver requests, allowing MSV
to further enhance its service coverage, but it specifically deferred its ruling
on other MSV waiver requests. The order sets forth various limitations and
conditions necessary to the use of ATC by MSV, but there can be no assurances
that such conditions will be satisfied by MSV, or that such limitations will not
be unnecessarily burdensome to MSV. One of MSV's competitors has asked the FCC
to review the November 8, 2004 decision. We cannot predict the outcome of this
review. On February 25, 2005, the FCC issued a revised set of rules following a
detailed multi-year process for the use of ATC. The rules expanded the technical
and operational flexibility of ATC Services allowing for greater capacity in
both the uplink and downlink directions. These rules are subject to challenge at
the FCC or before a federal court.

MSV's Spectrum Assets

MSV, together with Mobile Satellite Ventures (Canada) Inc., licensed by Industry
Canada, has access to more than 25 MHz of L-band spectrum that is authorized for
use in every market in North America. The L-band spectrum is positioned within
the range of frequencies used by terrestrial wireless providers in North
America. In addition to its L-band spectrum, MSV has certain rights to receive


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nationwide spectrum in the S-band (2 GHz range) from its affiliate, TMI
Communications and Company, Limited Partnership, or TMI, as a result of
authorizations from the FCC and Canada's regulatory authority. The S-band
authorizations contain certain conditions and require the satisfaction of
certain satellite construction and other milestones. Additionally, the amount of
the S-band spectrum that can be utilized by any one operator is contingent upon
the number of remaining authorized operators in the band as determined by their
respective ability to meet construction and other milestones. There can be no
assurance that such conditions and milestones will be satisfied. Also, the
transfer of the S-band authorizations to MSV is subject to approval by the FCC
and Canadian regulatory authority.

For additional information regarding MSV, please see the financial statements of
MSV beginning on page M-1.

Fresh Start Accounting

In January 2002, Motient and an informal committee of its senior noteholders
reached an agreement in principle with respect to the primary terms of a Plan of
Reorganization of Motient and its principal subsidiaries. Accordingly, on
January 10, 2002, Motient and certain of its subsidiaries filed for protection
under Chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court
for the Eastern District of Virginia. The Bankruptcy Court confirmed the Plan of
Reorganization on April 26, 2002, and the Plan became effective on May 1, 2002.

Upon effectiveness of the Plan, the ownership of Motient changed significantly,
with creditors becoming the new owners of substantially all of the equity of
Motient. Under the Plan, holders of the senior notes exchanged the principal
amount of their notes and all accrued interest thereon for shares of our common
stock. In addition, certain of our trade creditors received shares of our common
stock in settlement of their claims. All then outstanding shares of our
pre-reorganization common stock and all unexercised options and warrants were
cancelled. Holders of our pre-reorganization common stock received warrants to
purchase an aggregate of approximately 1,496,512 shares of common stock. These
warrants never vested and therefore they expired on May 1, 2004. Additionally,
our certificate of incorporation and bylaws were amended and restated. Our
restated certificate of incorporation authorizes Motient to issue up to 100
million shares of common stock and up to 5 million shares of preferred stock.

On the effective date of our Plan of Reorganization, a new board of directors of
Motient consisting of seven members was established. Effective May 1, 2002, we
adopted "fresh-start" accounting in accordance with the American Institute of
Certified Public Accountants Statement of Position 90-7, "Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code". We determined that the
selection of May 1, 2002 versus April 26, 2002 for the "fresh-start" date was
more convenient for financial statement reporting purposes and that the results
for the period from April 26, 2002 to May 1, 2002 were immaterial to our
consolidated financial statements. Under "fresh-start" accounting, a new entity
has been deemed created for financial reporting purposes.


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Further details regarding the Plan of Reorganization are contained in our
disclosure statement with respect to the Plan of Reorganization, which was filed
as Exhibit 99.2 to our current report on Form 8-K dated March 4, 2002.

Motient's Business Strategy

Motient's objective is to use its enterprise wireless data experience to
continue to penetrate the large markets for mobile data communications services
and solutions and wireless telemetry applications while keeping costs under
control. To meet these objectives, we intend to:

Focus Growth Efforts on iMotient Solutions Service Platform. In December 2004,
we launched a new set of products and services designed to provide seamless
wireless data solutions to our customers over multiple networks called iMotient
Solutions(TM). iMotient allows Motient's customers to use multiple networks via
a single connection to Motient's back-office systems, providing a one-source
alternative for development, device management and billing across multiple
networks, including but not limited to GPRS, 1XRTT, and DataTac. Once connected
to iMotient, customers will receive proprietary applications and services that
reduce airtime usage, improve performance and reduce costs. As part of the
iMotient Solutions platform, in addition to selling wireless services that use
our own network, we are also a reseller of airtime on the Cingular and Sprint
wireless networks. These reseller agreements allow us to sell and promote
applications and solutions to enterprise accounts on networks with greater
capacity than our own, while still maintaining a direct relationship with the
customer, since "back office" functions like customer support, application
design and implementation and billing, among other support services are handled
by Motient.

Focus Growth Efforts for the DataTac Network on Network Efficient Applications.
Certain applications have key attributes that make them an efficient use of the
Motient DataTac network. Applications such as wireless point-of-sale and
transportation and dispatching applications (found in industries such as
transportation, trucking and credit card processing) typically have small
bandwidth requirements and can be designed to utilize the network on a 24 hours
per day, 7 days per week basis, thus smoothing loading requirements and
optimally using our existing capacity. We believe that these kinds of
applications are poised for significant growth and that this growth can be
accommodated efficiently on the existing Motient DataTac network, and we have
signed agreements with several resellers that specialize in these kinds of
applications. This focus could also allow for some excess capacity to be
removed from our DataTac network in the future, which would reduce our operating
costs.

Leverage Motient's Expertise in Selling and Provisioning Complete Wireless Data
Solutions for Business Customers. A key strategic asset of Motient is its
experienced sales, customer care and technical support team. This team is
qualified to sell complete wireless data solutions, rather than simply devices
and network airtime, that may include network services that utilize more than
Motient's core terrestrial network, such as customer support and business
services.

Develop New Wireless Applications to Increase Demand and Revenue Per Subscriber.
Motient intends to exploit the market potential of its wireless network by


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working with other companies to develop additional innovative wireless
applications. As market acceptance and demand for wireless email grows, Motient
believes users will demand an increasing variety of Internet-based content and
services. Motient currently offers content-based services for use with its eLink
service provided by GoAmerica and Notify Inc.

Leverage Distribution Resources of Strategic Resellers. To penetrate target
markets without significant direct sales and marketing expenses, Motient has
signed a number of strategic alliances with various industry leaders. Motient
intends to leverage the relationships, marketing and distribution resources and
large existing customer bases of these resellers to reach significantly more
potential customers than Motient would be able to address on its own. Motient
has a roster of resellers and resale contracts with third parties, including
SkyTel Communications, Inc., Metrocall Wireless, Inc., Geologic Solutions
(formerly Aether Systems, which purchased our transportation assets in November
2000), Research In Motion, Ltd. and Earthlink, Inc., among others. Motient has
also entered into agreements with a number of device manufacturers, resellers
and software vendors to develop and offer a variety of specialized applications,
including heating, ventilation and air conditioning, commonly known as HVAC,
system monitoring, energy meter reading, office and vending machine automation
and wireless point-of-sale applications such as credit card processing. Motient
plans to continue to seek new strategic distribution channels that will enable
it to more fully penetrate its existing markets and access potential new
markets. In addition, Motient intends to exploit cross-selling opportunities
using some of its existing large corporate customers in the future.

Effectively Manage the Anticipated Migration of our Mobile Internet Segment
Customers. Due to the emergence of high-bandwidth competitive data networks, and
with additional voice service capabilities, as well as limitations on the number
of available mobile internet user devices, primarily as a result of Research In
Motion's decision in 2003 to discontinue the RIM 857 product line on our DataTac
network, we are implementing initiatives to manage the migration of these
customers to next-generation network solutions. These initiatives include
supporting customer migration efforts by referring these customer relationships
to T-Mobile through our sub-dealer agreements with RACO Wireless or otherwise
through eAccess Solutions, Inc. This allows us to continue to support our
customers' needs, while also generating revenue from these customers. This
migration of customers could also allow for some excess capacity to be removed
from our network, which would reduce our operating costs.

Work With Vendors to Develop Less Expensive and More Functional User Devices to
Address Competition and Increase Demand for its Services. Motient plans to
continue to work with vendors to develop new generations of user devices and
applications that combine improved functionality and convenience at a lower
price. Motient also plans to continue to incorporate inexpensive, off the shelf
software or free software in its services. Motient believes that lower price
points will help accelerate the acceptance and adoption of its services in its
traditional markets and will also enable Motient to better penetrate its
targeted new wireless markets. By working with suppliers and by making strategic
software and hardware investments, Motient has lowered the total cost of
ownership of its products. At the same time, Motient has improved the
functionality of its devices and made them smaller and more convenient.


                                       13
<PAGE>

Take Advantage of Motient's Professional Service and Back-Office Capabilities to
Potentially Generate New Revenue Opportunities. Motient has deployed
comprehensive and customized wireless data communications solutions for
businesses for over a decade. These wireless data communications solutions have
often required specialized billing, data switching requirements and inventory
and reporting requirements, among other customized back-office capabilities.
With our new iMotient platform, these professional services and back-office
capabilities can be customized to satisfy existing and new customers on
Motient's network or alternative networks. Motient believes that these
professional services and back-office capabilities can be positioned as network
or carrier agnostic and thus provide customers potentially expansive network
capabilities and service at the lowest cost.

Rationalize Cost Structure & Improve Network Utilization. Motient plans to
rationalize its network infrastructure by focusing on market segments that are
most appropriate for its technology. We intend to focus on the markets
identified above because we believe that this will enable us to grow our
revenues while also reducing the operating cost of our network, because these
markets are less demanding on our network.

Motient's Wireless Service Offerings

General

Motient sells wireless devices, airtime and applications. Our wireless data
applications include wireless email, wireless internet and intranet access,
wireless faxing, paging and peer-to-peer communications, wireless asset tracking
and dispatching, and wireless point-of-sale and data monitoring applications.
Motient supports 8 types of devices from 8 different manufacturers for use on
our network. These devices include Research In Motion handheld devices,
ruggedized laptops, handheld digital assistants and wireless modems for personal
computers, or PCs. Motient has also developed proprietary software and has
engaged a variety of other software firms to develop other "middleware," to
assist its customers' development efforts in connecting their applications to
our network. Also, a number of off-the-shelf software packages enable popular
email software applications on Motient's network.

Motient also has agreements with Sprint and Cingular to resell airtime
subscriptions and communications devices for use on their next generation
high-speed networks for wireless data communications services. In doing so,
Motient believes we will be able to enhance our sales performance by offering
enterprise customers a full array of technology solutions that meet their needs,
independent of the network.

iMotient Solutions

In December 2004, we announced the creation of iMotient Solutions(TM) and that
we are a reseller of airtime on the Cingular and Sprint wireless networks. These
reseller agreements allow us to sell and promote wireless data applications and
solutions to customers using networks that are more modern, and therefore have
greater capacity, than our own DataTac network, while still maintaining a direct
relationship with the customer, since "back office" functions like customer
support, application design and implementation and billing, among other things,
are handled by Motient.


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<PAGE>

The iMotient Solutions set of products and services allows Motient's customers
to use these multiple networks via a single connection to Motient's back-office
systems, providing a one-source alternative for software and application
development, device management and billing across multiple networks, including
but not limited to GPRS, 1XRTT and DataTac networks. Once connected to iMotient,
customers will receive our proprietary applications and services that reduce
airtime usage, improve performance and reduce costs.

Wireless Internet

Motient offers a variety of wireless email solutions for its network, including
its own eLink wireless e-mail applications, as well as Research In Motion's, or
RIM's, BlackBerry(TM) wireless solution for use on its own network.

Motient's eLink and BlackBerry(TM) applications for use on Motient's DataTac
network are generally used on wireless handheld devices manufactured by Research
In Motion, including the RIM 850 and RIM 857 wireless handhelds. Production of
the RIM 850 and RIM 857 wireless handhelds has been discontinued by Research in
Motion, as they cannot offer many of the features, like voice capability, that
the newer RIM devices can. For these reasons, we do not anticipate significant
future sales of these wireless internet devices, applications and services. In
addition, due to the competitive nature of this market segment from wireless
carriers with greater financial resources than our own, we expect this revenue
segment to decline in the future as customers migrate to alternative networks.

Motient can offer its customers an opportunity to utilize T-Mobile's GPRS
network for their wireless email solutions via its sub-dealer agreement with
RACO Wireless, Inc., a T-Mobile master dealer. T-Mobile's network can support
newer devices from RIM that are voice capable, among other things. Motient also
can offer its customers access to other alternative networks through its
agreement with eAccess Solutions, Inc.

We are currently exploring ways to offer comparable wireless email solutions
utilizing our iMotient Solutions platform in order to expand sales in this
market segment. There is no assurance that we can be successful in these efforts
and we may not be able to offer comparable competitive products.

Field Service Applications

In the field service market, long-standing customers, such as IBM, use Motient's
wireless network, wireless applications and professional support services and
back-office capabilities to enable their mobile field service technicians to
stay connected. For these and other field service customers, Motient also
provides critical professional support service and back-office functionality
tailored to our customers' respective communications requirements, such as
specialized billing, data switching, inventory tracking, customer support and
reporting.

The iMotient Solutions set of products and services will allow Motient to expand
sales in this market segment by using the coverage and capacity of multiple
networks.


                                       15
<PAGE>

Transportation and Shipping

In the transportation and shipping market, customers take advantage of Motient's
network, data switching and routing capabilities and professional support
services and back-office capabilities to provide effective communications
solutions to transportation and shipping fleets and other similar mobile
customers. For these and other transportation and shipping customers, Motient
also provides critical professional support service and back-office functions
tailored to our customers' respective communications requirements, such as
specialized billing, data switching, inventory tracking, customer support and
reporting.

The iMotient Solutions set of products and services will allow Motient to expand
its market presence in this vertical channel while leveraging the coverage and
capacity of multiple networks.

Telemetry

Telemetry involves the transmission of generally small amounts of data from a
remote device to a master collection or monitoring point. The data may be stored
in a mobile device and then transmitted when necessary or cost-effective.
Motient has signed agreements with a variety of resellers, device manufacturers
and software vendors in this market. We have also signed agreements with several
application service providers to develop and offer a variety of customer-driven
telemetry applications.

Applications include HVAC system monitoring, wireless point-of-sale systems,
energy monitoring, vending and office machine automation and security/alarm
monitoring. We believe that our expansive wireless network and telemetry
experience will allow us to provide cost-effective and comprehensive solutions
for these communication requirements.

The iMotient Solutions set of products and services will allow Motient to expand
sales in this market segment by using the coverage and capacity of multiple
networks.

Pricing of Services

Motient's customers are generally charged a monthly access fee or minimum usage
fee. Unless on a flat rate plan, users also pay for usage depending on the
number of kilobytes of data transmitted. Motient's pricing plans offer a wide
variety of volume packaging options, consistent with customer demand and market
conditions, from flat-rate plans to per message or per kilobyte plans. In
certain cases, primarily as it relates to strategic resellers, a percentage of
these subscriber units do not become revenue producing for up to several months
from initial registration on the network.


                                       16
<PAGE>

Motient's Customers

As of December 31, 2004, there were approximately 132,000 user devices
registered on Motient's network, with 107,000 in a billable status and 77,000
with active usage. Motient's customer base consists of large corporations in the
following market categories:



                                                     Percentage of
              Market Categories                      Billable Units
              -----------------                      --------------
     Transportation and package delivery                      39%
     Field service                                             7
     Telemetry and point of sale                              21
     Wireless internet or email                               33
                                                            ----
     Total                                                  100%
                                                            ====



For the year ended December 31, 2004, four customers accounted for approximately
40% of Motient's service revenue, with one of those customers, SkyTel,
accounting for more than 22%. The loss of one or more of these customers, or any
event, occurrence or development, which adversely affects Motient's relationship
with one or more of these customers, could harm Motient's business. The
contracts with these customers are generally multi-year contracts, and the
services provided pursuant to such contracts are generally customized
applications developed to work solely on Motient's network.

UPS, Motient's second largest customer for the year ended December 31, 2003 and
tenth largest customer for the year ended December 31, 2004, substantially
completed its migration to next generation network technology in the first six
months of 2003, and its monthly airtime usage of Motient's network declined
significantly. Consequently, the revenue and cash flows generated by UPS
declined significantly. While Motient expects that UPS will remain a customer
for the foreseeable future, there are no minimum purchase requirements under
Motient's contract with UPS and the contract may be terminated by UPS on 30
days' notice. As of December 31, 2004, UPS had approximately 4,700 user devices
actively passing traffic units on Motient's network.

In addition, due to a separate arrangement entered into in 2002 under which UPS
prepaid for network airtime to be used by it in 2004 and beyond, we do not
expect that UPS will be required to make any cash payments to us through 2006
for service to be provided through 2006. As of December 31, 2004 the value of
our remaining airtime service obligations to UPS in respect of the prepayment
was approximately $4.0 million. If UPS terminates its contract with Motient, any
remaining prepayment would be required to be repaid.


                                       17
<PAGE>

Marketing and Distribution

Motient markets its wireless services through strategic distribution resellers
and its direct sales force.

Strategic Alliances and Resellers

To penetrate new wireless data markets, which Motient believes have significant
growth potential, we have signed contracts for a variety of strategic alliances,
including with industry leaders. Motient intends to use the marketing and
distribution resources and large existing customer bases of these resellers to
address significantly more potential customers than Motient would be able to
address on its own.

Motient is continuing to seek additional strategic distribution channels to help
us move forward with our plan to more fully penetrate our existing markets and
access potential new markets on an incremental basis.

Furthermore, Motient has broadened its product line by entering into agreements
with Sprint and Cingular to include their next generation high-speed data
services in Motient's product offerings. By doing so, Motient believes that it
will be able to market itself as a "one-stop shop" for a full array of
technology and product offerings, not just those products operating on the
Motient network.

Direct Sales Force

Motient has a direct sales force that is experienced in selling its various
wireless services. Prior to making a buying decision, a majority of Motient's
potential customers exercise a due diligence process where competitive
alternatives are evaluated. Motient's employees often assist in developing
justification studies, application design support, hardware testing, planning
and training. Motient's internal sales force has been key to its ability to
convey customer feedback to its product management team, enabling Motient to
identify and develop new product and service features. Motient's internal sales
force is also supported by technical project managers that assist customers to
assess, design and implement their wireless data need and solutions.

Motient's Network

Motient's two-way wireless radio data network provides a wide range of mobile
data services. Users of Motient's network access it through subscriber units
that may be portable, mobile or stationary devices. Subscriber units receive and
transmit wireless data messages to and from terrestrial radio
transmitters/receivers, known as base stations, which are located on various
leased antenna sites across the United States. Terrestrial messages are then
routed to their destination via leased communications circuits and data switches
that Motient owns, which connect to the public data network.

Motient's terrestrial network delivers superior in-building penetration,
completion rates and response times compared to other wireless data networks
through the use of a patented single frequency reuse technology developed by
Motorola. Single frequency reuse technology enables multiple base stations in a


                                       18
<PAGE>

given area to use the same frequency. As a result, a message sent by a
subscriber can be received by a number of base stations. This technology
contrasts with more commonly used multiple frequency reuse systems, which
provide for only one transmission path for a given message at a particular
frequency. In comparison with multiple frequency reuse systems, Motient's
technology provides superior in-building penetration and response times and
enables it to incrementally deploy additional capacity as required, instead of
in larger increments as required by most wireless networks.

Equipment and Supplier Relationships

Motient has contracts with a variety of vendors to supply devices designed to
meet the requirements of specific end-user applications on its DataTac network.
Motient continues to pursue enhancements to these devices that will result in
additional desirable features and reduced cost of ownership. Although many of
the components of its products are available from a number of different
suppliers, Motient relies on a relatively small number of key suppliers for
devices for its DataTac network. The devices used with Motient's services
generally are subject to various product certification requirements and
regulatory approvals before they are delivered for use by its customers. There
are currently eight types of subscriber units available from eight different
manufacturers that can operate on Motient's terrestrial network. Examples of
portable subscriber units include ruggedized laptop computers, small external
modems, handheld or palmtop "assistants" and pen-based "tablets." Motient is
also working with other device manufacturers and software developers to bring
its network services to other existing popular PDA and wireless email platforms.

Under our iMotient Solutions platform and our reseller agreements with Cingular
and Sprint, we have access to a variety of vendors to supply devices designed to
meet the requirements of specific end-user applications. These vendors have
certified devices for use on either or both of the Cingular or Sprint networks,
and we are able to use any certified device that supports GPRS data on Cingular
or any 1XRTT device certified on Sprint's network.


                                       19
<PAGE>

AT&T Corp. provides network telecommunications services, including a nationwide
wireline data network, and leased sites which house regional switching equipment
for Motient's terrestrial network. Motient also has a relationship with AT&T as
Motient's vendor for switched inbound and outbound public switched telephone
network services, which connect Motient's network to the public
telecommunications network.

Motient's terrestrial DataTac network, and certain of its competitive strengths
such as comparatively strong in-building penetration, is based upon single
frequency reuse technology. Motorola holds the patent for the single frequency
reuse technology. Motient has entered into several agreements with Motorola
historically under which Motorola provided certain continued support for the
terrestrial network infrastructure, and ongoing maintenance and service of the
terrestrial network base stations. We do not currently have any service
agreement with Motorola.

Competition

The wireless communications industry is highly competitive and is characterized
by constant technological innovation. Motient competes by providing access to
multiple networks, broad geographic coverage, deep in-building penetration,
demonstrated reliability and experience in designing and implementing software
and other wireless applications for enterprise customers. These features
distinguish Motient from the competition. Motient's wireless solutions are used
by businesses that need critical customer and operational information in a
mobile environment. Motient offers multiple business lines and competes with a
variety of service providers, from small startups to Fortune 500 companies.
Motient's competitors include service providers in several markets--dedicated
mobile data, PCS and cellular, narrowband PCS/enhanced paging and emerging
technology platforms. Motient's agreements with Sprint and Cingular are not
exclusive and other wireless services providers have similar agreements with
these carriers.

Employees

On December 31, 2004 and March 15, 2005, Motient had 95 and 94 employees,
respectively. None of Motient's employees are represented by a labor union.
Motient considers its relations with its employees to be good.

Regulation

The terrestrial two-way wireless data network used in Motient's wireless
business is regulated to varying degrees at the federal, state and local levels.
Various legislative and regulatory proposals under consideration from time to
time by Congress and the FCC have in the past materially affected and may in the
future materially affect the telecommunications industry in general, and
Motient's wireless business in particular. The following is a summary of
significant laws, regulations and policies affecting the operation of Motient's
wireless business. In addition, many aspects of regulation at the federal, state
and local level currently are subject to judicial review or are the subject of
administrative or legislative proposals to modify, repeal, or adopt new laws and
administrative regulations and policies. Neither the outcome of these
proceedings nor their impact on Motient's operations can be predicted at this
time.

                                       20
<PAGE>

The ownership and operation of Motient's terrestrial network is subject to the
rules and regulations of the FCC, which acts under authority established by the
Communications Act of 1934, as amended, and related federal laws. Among other
things, the FCC allocates portions of the radio frequency spectrum to certain
services and grants licenses to and regulates individual entities using that
spectrum. Motient operates pursuant to various licenses granted by the FCC.

Motient is a commercial mobile radio service provider and therefore is regulated
as a common carrier. Motient must offer service at just and reasonable rates on
a first-come, first-served basis, without any unjust or unreasonable
discrimination, and Motient is subject to the FCC's complaint processes. The FCC
has decided not to apply or to withhold its right, at this time, to apply
numerous common carrier provisions of the Communications Act to commercial
mobile radio service providers. In particular, Motient is not subject to
traditional public utility rate-of-return regulation, and is not required to
file tariffs with the FCC.

The FCC's universal service fund supports the provision of affordable
telecommunications to high-cost areas and the provision of advanced
telecommunications services to schools, libraries, and rural health care
providers. Under the FCC's current rules, end-user revenues derived from the
sale of information and other non-telecommunication services and certain
wholesale revenues derived from the sale of telecommunications services are not
subject to universal service fund obligations. Generally, Motient is not
required to contribute to the universal service fund. Current rules also do not
require that Motient impute to its contribution base retail revenues derived
when it uses its own transmission facilities to provide a service that includes
both information service and telecommunications components. There can be no
assurances that the FCC will retain the exclusions described herein or its
current policy regarding the scope of a carrier's contribution base. Motient may
also be required to contribute to state universal service programs. The
requirement to make these state universal service payments, the amount of which
in some cases may be subject to change and is not yet determined, may have a
material adverse impact on the conduct of Motient's business.

Motient is subject to the Communications Assistance for Law Enforcement Act, or
CALEA. Under CALEA, Motient must ensure that law enforcement agencies can
intercept certain communications transmitted over its network. Motient must also
ensure that law enforcement agencies are able to access certain call-identifying
information relating to communications over Motient's network. The deadline for
complying with the CALEA requirements and any rules subsequently promulgated was
June 30, 2002. Based on discussions with Federal law enforcement agencies
regarding the applicability of CALEA's provisions to Motient, we do not believe
that our network, which uses packet data technology, is subject to the
requirements of CALEA. At the suggestion of Federal law enforcement agencies, we
have developed an alternative methodology for intercepting certain
communications over our network for the purposes of law enforcement
surveillance. We believe this alternative methodology has substantially the same
functionality as the standards provided in CALEA. It is possible that our

                                       21
<PAGE>

alternative methodology may ultimately be found not to comply with CALEA's
requirements, or that our interpretation that CALEA does not apply to our
network may ultimately be found to be incorrect.

In addition, CALEA establishes a federal fund to compensate telecommunications
carriers for all reasonable costs directly associated with modifications
performed by carriers in connection with equipment, facilities and services
installed or deployed on or before January 1, 1995. For equipment, facilities
and services deployed after January 1, 1995, the CALEA fund is intended to
compensate carriers for any reasonable costs associated with modifications
required to make compliance "reasonably achievable." It is possible that all
necessary modifications will not qualify for this compensation and that the
available funds will not be sufficient to reimburse Motient. Therefore, the
requirement to comply with CALEA could have a material adverse effect on the
conduct of Motient's business.

Motient's FCC licenses are renewable, site-based, 800 MHz licenses, granted for
a term of 10 years. Renewal is granted in the ordinary course for licenses like
those which Motient holds.

Motient's FCC licenses are subject to restrictions in the Communications Act
that (i) some FCC licenses may not be held by a corporation of which more than
20% of its capital stock is directly owned of record or voted by non-U.S.
citizens or entities or their representatives and (ii) no such FCC license may
be held by a corporation controlled by another corporation, referred to as
indirect ownership, if more than 25% of the controlling corporation's capital
stock is owned of record or voted by non-U.S. citizens or entities or their
representatives, if the FCC finds that the public interest is served by the
refusal or revocation of such license. However, with the implementation of the
Basic Telecommunications Agreement, negotiated under the auspices of the World
Trade Organization and to which the United States is a party, the FCC will
presume that indirect ownership interests in our FCC licenses in excess of 25%
by non-U.S. citizens or entities will be permissible to the extent that the
ownership interests are from World Trade Organization-member countries. If the
25% foreign ownership limit is exceeded, the FCC could take a range of potential
actions that could harm Motient's business.

In order to address certain concerns from wireless users in the public safety
community, such as fire and police departments, on July 8, 2004, the FCC
approved adoption of a reconfiguration plan for the 800 MHz spectrum band. Under
the plan, Nextel Communications Inc. will occupy spectrum in the 1.9 GHz band in
exchange for, among other things, (1) relocating and retuning public safety
licensees in the 800 MHz band, and (2) consolidating its own 800MHz frequencies
in the so-called "upper 800" MHz band. On April 8, 2004, Motient filed a request
with the FCC asking that the FCC relocate its 800MHz band frequencies into the
"Guard Band", which is that portion of the 800 MHz frequency band immediately
adjacent to the upper-800 as part of the 800 MHz reconfiguration plan. On August

                                       22
<PAGE>

6, 2004, the FCC released the text of its July 8, 2004 order. The text of the
order did not grant Motient's request, but neither did it explicitly deny it. On
December 2, 2004, Motient filed comments with the FCC seeking to clarify and
implement Motient's original request of April 8, 2004. On December 22, 2004, the
FCC clarified that Motient would generally be allowed, subject to certain
conditions, to move its 800 MHz frequencies to the upper-800 MHz band. Motient
cannot assure you that its operations will be not affected by the adoption or
implementation of this order or any subsequent addenda.

As a result of our ongoing network rationalization efforts, our 800 MHz FCC
licenses may be lost in markets to which we are discontinuing service. We
believe that the value of our FCC licenses in these smaller markets is very
small compared to the value of our FCC licenses in the top 40 MSAs. While we are
taking steps to avoid this possibility, and while we believe that any such
losses would not be material to our business, we can provide no assurance that
any such losses would not negatively impact our business.

Accounting and Auditing Matters

On March 2, 2004, we dismissed PricewaterhouseCoopers as our independent
auditors. The audit committee of our board of directors approved the dismissal
of PricewaterhouseCoopers. PricewaterhouseCoopers was previously appointed to
audit our consolidated financial statements for the period May 1, 2002 to
December 31, 2002, and, by its terms, such engagement was to terminate upon the
completion of services related to such audit.

PricewaterhouseCoopers has not reported on our consolidated financial statements
for such period or for any other fiscal period. On March 2, 2004, the audit
committee engaged Ehrenkrantz Sterling & Co. LLC as Motient's independent
auditors to audit our consolidated financial statements for the period May 1,
2002 to December 31, 2002 and for the fiscal year ended December 31, 2003.

On June 1, 2004, Ehrenkrantz Sterling & Co. LLC, merged with the firm of
Friedman Alpren & Green LLP. The new entity, Friedman LLP has been retained by
Motient and the Audit Committee of Motient's Board of Directors approved this
decision on June 4, 2004.

Risk Factors

An investment in our common stock involves risks. Any of the following risks, as
well as other risks and uncertainties, could harm our business and financial
results and cause the value of our securities to decline, which in turn could
cause investors to lose all or part of their investment in us. The risks below
are not the only ones we face. Additional risks not currently known to us, or
that we currently deem immaterial also may impair our business.

We have undergone significant organizational restructuring and we face
substantial operational challenges.

We have been forced to take material actions to reduce operating costs and
preserve our remaining cash. For example, in February 2004 we effected a
reduction in force that reduced our workforce from approximately 166 to 112
employees. The elimination of certain sales and other personnel may have a
negative effect on our future revenues and growth prospects and our ability to
support new product initiatives and generate customer demand. In addition, over
the course of 2004 we removed unneeded capacity across the network by
deconstructing under-utilized and un-profitable base stations. In addition,
during the first quarter of 2005, Motient initiated a plan to refocus its


                                       23
<PAGE>

DataTac network primarily on the top 40 Metropolitan Statistical Areas (MSAs).
This plan involves the decommissioning of DataTac network components and
termination of service in previously served MSAs above Top 40. Given the similar
coverage profiles of the Cingular and Sprint networks, the significantly
increased bandwidth capabilities of these networks relative to DataTac and the
concentration of our revenues in the top 40 MSAs, we determined that this plan
best allowed us to match our network infrastructure costs with our revenue base,
while continuing to meet the needs of as many of our customers as possible. As
Motient begins decommissioning its DataTac network outside of the 40 largest
MSA, it may be faced with the loss of certain FCC licenses in those areas.
Motient anticipates that if it is not able to sell, lease or otherwise monetize
these frequencies, it may be forced to return the underlying licenses to the
FCC. We have discussed these changes to our network with many of our customers
to assist them in evaluating the potential impact, if any, to their respective
communications requirements. These reductions in network capacity and coverage
may have a negative effect on our future revenues and growth prospects.

We are not and may never be cash flow positive, and our prospects will depend on
our ability to control our costs while maintaining and improving our service
levels.

We do not generate sufficient cash from operations to cover our operating
expenses, and it is unclear when, or if, we will be able to do so. As a result,
we have been involved in the process of reducing our expenditures in a variety
of areas, including a reduction in the number of our employees, the closure of
our Reston facility and the restructuring and reduction of our network. We also
have renegotiated several of our key vendor and customer arrangements and
continue to aggressively pursue further vendor cost reductions when
opportunities arise. We continue to use more cash than we generate from
operations. Our prospects will depend in part on our ability to reduce operating
costs further and operate more efficiently, while maintaining and improving our
service levels.

We will need additional liquidity to fund our operations.

We do not generate sufficient cash from operations to cover our operating
expenses, and it is unclear when, or if, we will be able to do so. Even if we
begin to generate cash in excess of our operating expenses, we expect to require
additional funds to meet capital expenditures and other non-operating cash
expenses. We currently anticipate that our funding requirements through 2005
should be met through a combination of various sources, including:

     o    cash on hand

     o    cash from a rights offering announced in December 2004, expected to be
          completed by May or June 2005, and,

     o    cash from the exercise of outstanding options and warrants

There can be no assurance that the foregoing sources of liquidity will provide
sufficient funds in the amounts or at the time that funding is required. In
addition, if our ability to realize such liquidity from any such source is
delayed or the proceeds from any such source are insufficient to meet our
expenditure requirements as they arise, we will seek additional equity or debt
financing, although such additional financing may not be available on reasonable
terms, if at all.

                                       24
<PAGE>

We will continue to incur significant losses.

If we do not become profitable, we could have difficulty obtaining funds to
continue our operations. We have incurred net losses every year since we began
operations. These losses are due to the costs of developing and building our
network and the costs of developing, selling and providing products and
services. Although we have significantly reduced our losses, we will continue to
have losses in the future.

We generate a large part of our revenues and cash flows from a small number of
customers, and the loss of one or more key customers could result in a
significant reduction in revenues and cash flows.

For the year ended December 31, 2004, four customers accounted for approximately
40% of our service revenue, with one of those customers, SkyTel Communications,
Inc., accounting for more than 22%. None of these significant customers are
obligated to purchase any minimum quantity of airtime, service or hardware from
us. There can be no assurance that the revenue generated from our largest
customers will continue in future periods. We may lose certain revenues from
major customers due to churn and migration to alternative technologies. The loss
of one or more of our key customers, a material reduction in such customers' use
of our network, or any other event, occurrence or development which adversely
affects our relationship with one or more of these customers, could harm our
business by reducing revenue and reducing net cash flow from operations.

In addition, United Parcel Service, Inc., or UPS, our second largest customer
for the year ended December 31, 2003 and our tenth largest customer for the year
ended December 31, 2004, substantially completed its migration to next
generation network technology by the end of the second quarter of 2003, and its
monthly airtime usage of our network declined significantly. In December 2002 we
entered into a separate agreement with UPS under which UPS made a significant
prepayment for network airtime service to be provided beginning January 1, 2004.
The prepayment was credited against airtime services provided to UPS beginning
January 1, 2004, until the prepayment is fully credited. If UPS terminates our
contract (which it may do on 30 days' notice), any remaining prepayment would be
required to be repaid. Based on the current level of network airtime usage by
UPS, we do not expect that UPS will be required to make any cash payments to us
through 2006 for service provided through 2006.

Our growth has been curtailed by funding constraints.

We have significantly decreased the amount that we are spending on the
maintenance and growth of our operations, network and subscriber base due to our
liquidity constraints. We have taken a number of steps to continue to reduce our
operating and capital expenditures in order to lower our cash burn rate. Our
failure to generate or raise sufficient funds may require us to delay or abandon
some of our expenditures, which could harm our business and competitive
position.

We face burdens relating to the recent trend toward stricter corporate
governance and financial reporting standards.

                                       25
<PAGE>

New legislation or regulations that follow the trend of imposing stricter
corporate governance and financial reporting standards, including compliance
with Section 404 of the Sarbanes-Oxley Act of 2002, may lead to an increase in
our costs of compliance. Beginning with our annual report on Form 10-K for the
year ended December 31, 2004, we will be required to file our quarterly and
annual reports on an accelerated basis, which we have not been required to do in
the past. A failure to comply with these new laws and regulations may impact
market perception of our financial condition and could materially harm our
business. Additionally, it is unclear what additional laws or regulations may
develop, and we cannot predict the ultimate impact of any future changes.

We may not be able to realize value from our investment in MSV due to risks
associated with MSV's next-generation business plan.

MSV's next-generation business plan involving the development of a next
generation network that combines satellite services with ancillary terrestrial
components, or ATC, is novel and without established precedent. Neither MSV nor
any other company has developed an integrated hybrid network combining satellite
services with ATC, and MSV's success will depend on several factors, including:

     o    the ultimate resolution of pending FCC and court proceedings with
          respect to MSV's L-band license and S-band rights;

     o    MSV's ability to effectively make use of spectrum in the S-band and
          L-band;

     o    MSV's ability to structure partnerships to fund its next generation
          system consistent with various regulations governing ownership and
          operation of both satellite assets and ATC;

     o    MSV's ability to coordinate with other satellite system operators to
          optimize both its overall spectrum access and the utility of its
          spectrum for certain wireless protocols;

     o    whether the price paid for spectrum in prior transactions is
          indicative of the future value of MSV's spectrum assets and MSV's
          ability to effect transactions that realize the value of such spectrum
          assets;

     o    the supply of available wireless spectrum in the marketplace;

     o    MSV's ability to develop and integrate the complex technologies
          associated with its next-generation system as well as appropriately
          and effectively manage interference;

     o    MSV's ability to develop and deploy innovative network management
          techniques to permit mobile devices to seamlessly transition between
          satellite and terrestrial mode;

     o    the construction, delivery and launch of MSV's next-generation
          satellites and the maintenance of MSV's existing geostationary
          satellites;

     o    MSV's ability to obtain funding for the construction of the satellite
          component of its next-generation service on favorable terms;

     o    MSV's dependence on one or more third party partners to construct the
          terrestrial base station component of its next-generation network;

     o    market acceptance and level of demand for MSV's next-generation
          network; and

     o    protection of MSV's proprietary information and intellectual property
          rights.

                                       26
<PAGE>

If MSV is unable to implement its next-generation business strategy, our
investment in MSV could be materially and adversely affected. For additional
information regarding MSV, please see the financial statements of MSV beginning
on page M-1.

Motient may have to take actions which are disruptive to its business to avoid
registration under the Investment Company Act of 1940.

Motient may have to take actions which are disruptive to its business if it is
deemed to be an investment company under the Investment Company Act of 1940.
Motient's equity investments, in particular its ownership interests in MSV, may
constitute investment securities under the Investment Company Act. A company may
be deemed to be an investment company if it owns investment securities with a
value exceeding 40% of its total assets excluding cash items and government
securities, subject to certain other exclusions. Investment companies are
required to register under and comply with the Investment Company Act unless an
exclusion or SEC safe harbor applies. If Motient were to be deemed an investment
company, it would become subject to the requirements of the Investment Company
Act. As a consequence, Motient would be prohibited from engaging in business as
it has in the past and might be subject to civil and criminal penalties for
noncompliance. In addition, certain of its contracts might be voidable, and a
court-appointed receiver could take control of Motient and liquidate its
business.

We could lose market share and revenues as a result of increasing competition
from companies in the wireless communications industry that have greater
resources and name recognition.

We expect to face intense competition in all of our markets, which could result
in a loss of customers and lower revenues and could make it more difficult for
us to enter new markets. Our competitors include service providers in several
markets -- dedicated mobile data, personal communications service, or PCS,
narrowband PCS/enhanced paging and emerging technology platforms. The growth in
wireless data opportunities has led traditional hardware manufacturers and
software developers to invest in technologies that will allow the migration of
core products and services to a mobile environment.

Our wireless internet service competes with a variety of services that offer
two-way messaging and personal digital assistant, or PDA, functionality on
small, portable devices. Most of these competing services are better established
in the marketplace, and many competitors have substantially greater financial,
technical, marketing, sales, distribution and other resources than we have. Our
agreement with Research In Motion permits us to market the BlackBerry(TM)
service in the United States on the Motient network. These and other firms may
enter the markets where we focus our sales efforts, which may create downward
pressure on the prices for our services and negatively impact our returns. Many
of the existing and potential competitors have financial and other resources far
greater than those of Motient. In addition, continuing consolidation in the
communications industry may strengthen existing competitors or give rise to
significant new competitors, which would threaten our business.

                                       27
<PAGE>

In addition, a variety of new technologies, devices and services will result in
new types of competition for us in the near future. The emergence of new
protocols such as the wireless access protocol, or WAP, and the Bluetooth
protocol enable the use of the Internet as a platform to exchange information
among people with different devices running on different networks. Also, several
large wireless providers are deploying new, so-called "2.5G" and "3G"
technologies, including new forms of CDMA, time division multiple access, or
TDMA, and GSM technologies, which will increase the data capabilities of
wireless voice and data services and will have a competitive impact on our
business.

Failure to keep pace with rapidly changing markets for wireless communications
would significantly harm our business.

The technology and markets for wireless communications services change rapidly.
Our success depends, in part, on our ability to respond and adapt to change. For
example, large wireless voice carriers are in the process of expanding their
ability to offer wireless data services that may compete with our services, by
deploying "2.5G" and "3G" technologies. These technologies, which include GPRS
and 1XRTT, support both wireless voice and packet data services. While we will
endeavor to enhance the efficiency and performance of our existing data-only
network through a variety of measures, we also expect to consider, as
appropriate, alliances or other contractual arrangements with larger wireless
communications providers, so that we can continue to offer as complete an array
of data services as possible. We cannot guarantee that we will be able to
compete effectively under, or adjust our contemplated plan of development to
meet, changing market conditions. We cannot guarantee that we will be able to
implement our strategy or that our strategy will be successful in these rapidly
evolving markets. The markets for wireless communications services are also
marked by the continuous introduction of new products and services and increased
capacity for services similar to those provided by Motient. Technological
advances may also increase the efficiency of existing products or services. If a
technology becomes available that is more cost-effective or creates a superior
product, we may be unable to access this technology or finance the necessary
substantial capital expenditures that may be required. Our technology may be
rendered less profitable or less viable by existing, proposed or as yet
undeveloped technologies. We cannot guarantee that we will have the financial
and other resources available to compete effectively against companies
possessing such technologies. We are unable to predict which of the many
possible future products and services will meet evolving industry standards and
consumer demands. We cannot guarantee that we can adapt to technological changes
or offer products or services on a timely basis to establish or maintain a
competitive position.

The success of our wireless communications business depends on our ability to
enter into and maintain third party distribution relationships.

A key element of our strategy is to develop and capitalize on distribution
relationships with leading companies who can provide access to significant
numbers of potential customers in our target markets. For example, Motient has
reseller agreements with SkyTel, Metrocall, Geologic Solutions and Earthlink, as
well as Research In Motion. Because we are relying on these distribution

                                       28
<PAGE>

companies to enable us to acquire subscribers, our success in penetrating our
targeted markets will depend, to a large extent, on the efforts of these
distribution companies, as well as future distribution companies. The rollout of
sales efforts by these distribution companies may be subject to delays, some of
which may be outside of our control. Some of our resellers have experienced
significant financial difficulties in recent periods. Our inability to fully
capitalize on our third party distribution agreements, the termination of or
failure to renew any of these agreements, or our inability to enter into similar
distribution relationships with other leading companies could reduce our access
and exposure to potential customers.

We expect to maintain a limited inventory of devices to be used in connection
with our wireless internet service, and any interruption in the supply of such
devices could significantly harm our business.

We depend on independent vendors to develop and manufacture wireless
communications devices for our networks, which are significant elements of our
business plan because most of our services require these devices. Numerous
vendors manufacture devices that can be utilized on the Cingular and Sprint
networks that can be offered to Motient's current and future customers through
our iMotient Solutions(TM) platform.

We carry a limited inventory of these devices and generally have no guaranteed
supply arrangements. Some of these suppliers and vendors are relatively small
companies and have limited resources and production capacities. In addition,
some of our sole-source suppliers themselves rely on sole- or limited-sources of
supply for components included in their devices.

We may not be able to develop, acquire and maintain proprietary information and
intellectual property rights, which could limit the growth of our business and
reduce our market share.

Our wireless communications business depends on technical knowledge, and we
believe that our future success is based, in part, on our ability to keep up
with new technological developments and incorporate them in our products and
services. We own or have the right to use certain of our work products,
inventions, designs, software, systems and similar know-how. While we have taken
steps to diligently protect that information, there is no assurance that the
information will not be disclosed to others or that others will not
independently develop similar information, systems and know-how. Protection of
our information, systems and know-how may result in litigation, the cost of
which could be substantial. There is also no assurance that third parties will
not assert claims that our products or services infringe on their proprietary
rights.

If we are found to infringe or misappropriate a third party's proprietary
rights, we could be required to pay damages to the third party, alter our
products or services, obtain a license from the third party or cease activities
utilizing these proprietary rights, including making or selling products or
services utilizing the proprietary rights. Our inability to do any of the
foregoing on commercially favorable terms could have a material adverse impact
on our business, financial condition or results of operations.

We also rely on some technologies licensed from third parties. We cannot be sure
that these licenses will remain available on commercially reasonable terms or at
all. The loss of these technologies could require us to obtain substitute
technology of lower quality or performance standards or at a greater cost, which
could harm our business.


                                       29
<PAGE>

Government regulation may increase our cost of providing services, slow our
expansion into new markets, subject our services to additional competitive
pressures and affect the value of our common stock.

Motient's ownership and operation of wireless communication systems are subject
to significant regulation by the FCC under authority granted by the
Communications Act of 1934 and related federal laws. There is no assurance that
the rules and regulations of the FCC will continue to support our operations as
presently conducted. A number of Motient's licenses are subject to renewal by
the FCC. We cannot guarantee that all existing licenses will be renewed and that
the requisite frequencies will be coordinated. Moreover, the recent changes to
our wireless network specifically the future discontinuance of service to
certain smaller markets, may result in the loss of our FCC licenses in such
markets. Current federal law requires prior FCC approval of greater than 25%
ownership of Motient by citizens or entities of foreign countries, which could
limit the value of our common stock.

Motient's competitive position may be harmed if the wireless terrestrial network
technology it licenses from Motorola is made available to competitors.

Motient holds a non-exclusive license to use a single frequency reuse
technology. The terrestrial network, and some of its competitive strengths, such
as in-building penetration, is based upon this technology. Under the terms of
the non-exclusive license, Motorola could enter into arrangements to license
this technology to any of our competitors, and those agreements could harm our
ability to compete.

We do not expect to pay any dividends on our common stock for the foreseeable
future.

We have never paid cash dividends on our common stock and do not anticipated
that any cash dividends will be paid on the common stock for the foreseeable
future. The payment of any dividend by us will be at the discretion of our board
of directors and will depend on, among other things, our earnings, capital
requirements and financial condition. In addition, under Delaware law, a
corporation cannot declare or pay dividends on its capital stock unless it has
an available surplus. Furthermore, the terms of some of our financing
arrangements directly limit our ability to pay cash dividends on our common
stock. The terms of any future indebtedness of our subsidiaries also may
generally restrict the ability of some of our subsidiaries to distribute
earnings or make other payments to us.

Future sales of our common stock could adversely affect its price and/or our
ability to raise capital.

Sales of substantial amounts of common stock, or the perception that such sales
could occur, could adversely affect the prevailing market price of the common
stock and our ability to raise capital. We have announced a rights offering,
pursuant to which we may sell up to 2.5 million shares of common stock at $8.57
per share.

We may issue additional common stock in future financing transactions or as
incentive compensation for our executives and other personnel, consultants and
advisors. Issuing any equity securities would be dilutive to the equity
interests represented by our then-outstanding shares of common stock. The market
price for our common stock could decrease as the market takes into account the

                                       30
<PAGE>

dilutive effect of any of these issuances. Any additional issuance of equity by
Motient would also be subject to certain pre-emptive rights held by the
investors in Motient's April, July and November 2004 private placements.
Finally, if Motient decides to file a registration statement to raise additional
capital (other than the rights offering mentioned above), some of Motient's
existing stockholders hold piggyback registration rights that, if exercised,
will require Motient to include their shares in the registration statement. Any
of these conditions could adversely affect Motient's ability to raise needed
capital.

Rights Offering

On November 22, Motient announced that it will issue to each of its stockholders
of record one right for each share of Motient common stock held as of the close
of business on December 17, 2004. Each right will entitle any holder that did
not participate in the April, July or November 2004 private placement to
purchase 0.103 shares of its common stock at a price of $8.57 per share, with
fractions rounded up to the next whole share. A maximum of 2.5 million shares
may be sold in the Rights Offering, generating maximum aggregate proceeds of
approximately $21.4 million.

The rights will be non-transferable and will expire if not exercised within the
exercise period. The rights will not be exercisable until the registration
statement covering the rights and the shares of underlying common stock is
declared effective by the SEC, and the exercise period will expire 30 days after
the rights become exercisable. Motient has not filed a registration statement
relating to the rights offering, but intends to do so as soon as reasonably
practicable. Motient expects to consummate this rights offering in mid 2005.

The holders of the rights will not have over-subscription rights, and there will
be no backstop to purchase unsubscribed shares. Purchasers that purchased shares
in the November 12, 2004 private placement of its common stock, which include
all purchasers in its April and July 2004 private placements, have waived their
right to participate in the rights offering. Motient reserves the right to
abandon this rights offering at any time prior to the effectiveness of the
registration statement relating to the rights offering, and upon any such
abandonment, any and all of the rights previously issued will be cancelled, will
no longer be exercisable and will be of no further force or effect.

Item 2. Properties.
-------------------

Motient leases approximately 79,000 square feet for headquarters office space
and an operations center in Lincolnshire, IL, the lease for which expires
December 31, 2010. On April 1, 2003, Motient subleased approximately 8,500
square feet to a third party under a sublease agreement that expires on December
31, 2005.

Motient also leases site space for over 1,200 base stations and antennae across
the country for the terrestrial network under one to five-year lease contracts
with varied renewal provisions.

                                       31
<PAGE>

Motient believes that its existing facilities are adequate to meet its needs for
the foreseeable future.

Item 3. Legal Proceedings.
--------------------------

In March 2005, Research In Motion Ltd. (RIM) settled an outstanding patent
infringement lawsuit related to RIM's BlackBerry handheld device and software,
which Motient supports on its DataTac wireless network. As a result of this
settlement, RIM and its customers, including Motient, may use the BlackBerry
device and software without any further interference from NTP, Inc., the holder
of the disputed patents.

On April 15, 2004, Motient filed a claim under the rules of the American
Arbitration Association in Fairfax County, VA, against Wireless Matrix
Corporation, a reseller of Motient's services, for the non-payment of certain
amounts due and owing under the "take-or-pay" agreement between Motient and
Wireless Matrix. Under this agreement, Wireless Matrix agreed to purchase
certain minimum amounts of air-time on the Motient network. In February 2004,
Wireless Matrix informed Motient that it was terminating its agreement with
Motient. Motient did not believe that Wireless Matrix had any valid basis to do
so, and consequently filed the above mentioned claim seeking over $2.6 million
in damages, which amount represents Wireless Matrix's total prospective
commitment under the agreement. On May 10, 2004, Motient received notice of a
counter-claim by Wireless Matrix of approximately $1 million, representing such
amounts as Wireless Matrix claimed to have paid in excess of services rendered
under the agreement. In June 2004, Motient reached a favorable out of court
settlement, in which Wireless Matrix paid Motient $1.1 million.

From time to time, Motient is involved in legal proceedings in the ordinary
course of its business operations. Although there can be no assurance as to the
outcome or effect of any legal proceedings to which Motient is a party, Motient
does not believe, based on currently available information, that the ultimate
liabilities, if any, arising from any such legal proceedings not otherwise
disclosed would have a material adverse impact on its business, financial
condition, results of operations or cash flows.

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

No matters were submitted to a vote of our stockholders during the fourth
quarter of fiscal 2004.

In March 2005, the board voted to propose to the shareholders that Motient's
authorized shared be increased from 100 million to 200 million at Motient's next
annual meeting.


                                       32
<PAGE>

                                     PART II

Item 5.  Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.
--------------------------------------

Our common stock is not listed on any national securities exchange or on the
Nasdaq Stock Market. Our common stock has been quoted under the symbol "MNCP" on
the Pink Sheets since May 2, 2002.

The following tables set forth for the period indicated the high and low bid
prices for our common stock for the periods indicated for 2003, 2004 and 2005.

     ----------------------------------------------------------------------
                              2005                    High          Low
     ----------------------------------------------------------------------
     First Quarter (through March 15, 2005)          $31.45        $21.25
     ----------------------------------------------------------------------
                              2004                    High          Low
     ----------------------------------------------------------------------
     First Quarter                                    $7.45         $4.05
     Second Quarter                                  $14.01         $6.15
     Third Quarter                                   $13.75         $8.40
     Fourth Quarter                                  $23.95         $8.95
     ----------------------------------------------------------------------
                              2003                    High          Low
     ----------------------------------------------------------------------
     First Quarter                                    $4.00         $2.75
     Second Quarter                                   $5.75         $2.00
     Third Quarter                                    $6.35         $4.35
     Fourth Quarter                                   $5.55         $3.50
     ----------------------------------------------------------------------


The high and low sales prices represent the intra-day prices on the Pink Sheets.
The quotations represent inter-dealer quotations, without retail markups,
markdowns or commissions, and may not necessarily represent actual transactions.

On March 15, 2005, the last reported bid price of our common stock was $25.40
per share on the Pink Sheets. As of March 15, 2005, there were approximately 106
record holders of our common stock.

Dividends

We have never declared or paid any cash dividends on our capital stock and do
not plan to pay dividends on our capital stock for the foreseeable future. The
payment of any dividend by us will be at the discretion of our board of
directors and will depend on, among other things, our earnings, capital
requirements and financial condition. Under Delaware law, a corporation cannot
declare or pay dividends on its capital stock unless it has an available
surplus.

                                       33
<PAGE>

Recent Sales of Unregistered Securities

On April 7, 2004, Motient sold 4,215,910 shares of its common stock at a per
share price of $5.50 for an aggregate purchase price of $23.2 million to several
different investors. The sale of these shares was not registered under the
Securities Act of 1933, as amended and the shares may not be sold in the United
States absent registration or an applicable exemption from registration
requirements. The shares were offered and sold pursuant to the exemption from
registration afforded by Rule 506 under the Securities Act and/or Section 4(2)
of the Securities Act. In connection with this sale, Motient signed a
registration rights agreement with the holders of these shares. Motient also
issued warrants to purchase an aggregate of 1,053,978 shares of its common stock
to the investors listed above, at an exercise price of $5.50 per share. Because
Motient met certain conditions following the issuance of the warrants, they will
never vest.

In connection with this sale, Motient issued to Tejas Securities Group, Inc.,
its placement agent for the private placement, and certain CTA affiliates,
warrants to purchase 600,000 and 400,000 shares, respectively, of its common
stock. The exercise price of these warrants is $5.50 per share. The warrants are
immediately exercisable upon issuance and have a term of five years. Motient
also paid Tejas Securities Group, Inc. a placement fee of $350,000 at closing.
The fair value of the warrants was estimated at $6.2 million using a
Black-Scholes model. The shares were offered and sold pursuant to the exemption
from registration afforded by Rule 506 under the Securities Act and/or Section
4(2) of the Securities Act.

On July 1, 2004, Motient sold 3,500,000 shares of its common stock at a per
share price of $8.57 for an aggregate purchase price of $30.0 million to
multiple investors. The sale of these shares was not registered under the
Securities Act and the shares may not be sold in the United States absent
registration or an applicable exemption from registration requirements. The
shares were offered and sold pursuant to the exemption from registration
afforded by Rule 506 under the Securities Act and/or Section 4(2) of the
Securities Act. Motient also issued warrants to purchase an aggregate of 525,000
shares of its common stock to the investors listed above, at an exercise price
of $8.57 per share. Because Motient met certain conditions following the
issuance of the warrants, they will never vest.

In connection with this sale, Motient issued to certain affiliates of CTA and
Tejas Securities Group, Inc., its placement agent for the private placement,
warrants to purchase 340,000 and 510,000 shares, respectively, of its common
stock. The exercise price of these warrants is $8.57 per share. The warrants are
immediately exercisable upon issuance and have a term of five years. Motient
also paid Tejas Securities Group, Inc. a placement fee of $850,000 at closing.
The fair value of the warrants was estimated at $11.6 million using a
Black-Scholes model. The shares were offered and sold pursuant to the exemption
from registration afforded by Rule 506 under the Securities Act and/or Section
4(2) of the Securities Act.

                                       34
<PAGE>

On November 12, 2004, Motient sold 15,353,609 shares of its common stock at a
per share price of $8.57. Motient received aggregate proceeds of $126,397,809,
net of $5,182,620 in commissions paid to its placement agent, Tejas Securities
Group, Inc. The approximately 60 purchasers included substantially all of the
purchasers from the April and July 2004 private placements, as well multiple new
investors. The sale of these shares was not registered under the Securities Act
and the shares may not be sold in the United States absent registration or an
applicable exemption from registration requirements. The shares were offered and
sold pursuant to the exemption from registration afforded by Rule 506 under the
Securities Act and/or Section 4(2) of the Securities Act. In connection with
this sale, Motient signed a registration rights agreement with the holders of
these shares. Among other things, this registration rights agreement required us
to file and cause to make effective a registration statement permitting the
resale of the shares by the holders thereof. Motient also issued warrants to
purchase an aggregate of approximately 3,838,401 shares of its common stock to
the investors listed above, at an exercise price of $8.57 per share. These
warrants will vest if and only if Motient does not meet certain deadlines
between January and March 2005 with respect to certain requirements under the
registration rights agreement, one of which has already been met, and one of
which was not met. Accordingly, 25% of these warrants have vested, and 25% of
these warrants will never vest. If the remaining warrants vest, they may be
exercised by the holders thereof at any time through November 11, 2009.

On February 9, 2005, Motient entered into a merger agreement with Telcom
Satellite Ventures Inc. and Telcom Satellite Ventures II Inc. and simultaneously
consummated the transactions contemplated thereby, pursuant to which Telcom
merged with and into MVH Holdings Inc., a direct and wholly-owned subsidiary of
Motient, in a tax free reorganization in which MVH is the surviving company. In
exchange for 2,296,835 MSV limited partnership units owned by the Telcom
entities, Motient issued to Telcom's stockholders 8,187,804 shares of its common
stock. As the purchasers are all accredited investors, and no general
solicitation has occurred, or will occur, as part of the offering and sale of
these securities, Motient has relied upon the exemption from registration
afforded by Rule 506 under the Securities Act and/or Section 4(2) of the
Securities Act.

Concurrently with this merger, Motient (through MVH) also purchased 373.7 shares
of common stock of Spectrum Space Equity Investors IV, Inc. and two other
related entities, representing approximately 66.3% of the outstanding common
stock of each of such entities, and 221.2 shares of common stock of Columbia
Space Partners, Inc. and two other related entities, representing approximately
27.8% of the outstanding common stock of such entities. In total, Motient issued
to the Spectrum entities and Columbia entities a total of 4,516,978 shares of
Motient common stock in a private placement in exchange for indirect ownership
of 1,267,098 MSV units. As the purchasers are all accredited investors, and no
general solicitation has occurred, or will occur, as part of the offering and
sale of these securities, Motient has relied upon the exemption from
registration afforded by Rule 506 under the Securities Act and/or Section 4(2)
of the Securities Act.


                                       35
<PAGE>

Telcom, Columbia and Spectrum also received warrants exercisable for an
aggregate of approximately 952,858 shares of Motient common stock. The warrants
have a term of five years and an exercise price equal to $22.50. Each warrant
shall become exercisable only as follows: (i) with respect to 35% of the warrant
shares, on the date that is 30 days following the closing of the merger, if a
registration statement covering the resale of the shares shall not have been
filed with the SEC by such date, (ii) with respect to an additional 35% of the
warrant shares, on the 60th day after the closing of the merger, if a
registration statement covering the resale of the shares shall not have been
filed with the SEC by such date, and (iii) with respect to 30% of the warrant
shares, on the 180th day after the closing of the Mergers, if a registration
statement covering the resale of the shares shall not have been declared
effective. As Motient has filed a registration statement covering these shares
on February 14, 2005, 70% of the 952,858 warrants will never vest.

No securities were repurchased during the fourth quarter of 2004.

Certain information concerning our equity compensation plans appearing under
"Equity Compensation Plan Information" is included in "Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters" below.

Item 6.  Selected Financial Data.
---------------------------------

The following table summarizes our financial results as of and for the fiscal
years ended December 31, 2000 and 2001, the four months ended April 30, 2002,
the eight months ended December 31, 2002, and the years ended December 31, 2003
and 2004. The consolidated balance sheet data and the other consolidated
statement of operations data are derived from the consolidated financial
statements of Motient, which were audited by Ehrenkrantz Sterling & Co. LLC,
independent public accounting firm, except for the December 31, 2003 and 2004
balance sheets, which were audited by Friedman LLP, successors-in-interest to
Ehrenkrantz Sterling & Co. LLC. All of the financial information for Motient up
to and including April 30, 2002 is referred to as "Predecessor Company" results.
The financial information for Motient for the periods subsequent to April 30,
2002 are referred to as "Successor Company" results.

You should read our selected financial data in conjunction with the information
contained in "Item 7 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our consolidated financial statements
and related notes thereto included elsewhere in this report. In reading the
following selected financial data, please note the following:

     o    Effective May 1, 2002, as a result of our emergence from bankruptcy,
          we adopted "fresh-start" accounting in accordance with American
          Institute of Certified Public Accountants Statement of Position 90-7,
          "Financial Reporting by Entities in Reorganization under the
          Bankruptcy Code". "Fresh-start" accounting has resulted in material
          changes to financial statements for periods beginning after May 1,
          2002, to reflect adjustments required pursuant to SOP 90-7 to record
          assets and liabilities at fair values in accordance with procedures
          specified by Statement of Financial Accounting Standards No. 141,
          "Business Combinations".

                                       36
<PAGE>

     o    Because the summary financial data below relates to periods prior to
          May 1, 2002, the effective date we emerged from bankruptcy, we refer
          to the summary financial data as that of the Predecessor Company. Due
          to the reorganization and implementation of SOP 90-7, financial
          statements issued for periods beginning after May 1, 2002 will not be
          comparable to that of the Predecessor Company.

     o    In November 2002, we initiated a process to seek the concurrence of
          the staff of the SEC with respect to our conclusions of the
          appropriate accounting for the formation of and certain transactions
          with MSV in 2000 and 2001 and the sale of certain of our
          transportation assets to Aether Systems in 2000. This process was
          completed in March 2003. The staff of the SEC did not object to
          certain aspects of our prior accounting with respect to the MSV and
          Aether Systems transactions, but did object to other aspects of our
          prior accounting for these transactions. For a description of the
          material differences between our original accounting treatment with
          respect to the MSV and Aether Systems transactions and the revised
          accounting treatment that we concluded is appropriate as a result of
          this process, please see our current report on Form 8-K dated March
          14, 2003.

     o    As a result of our re-audit of the years ended December 31, 2000 and
          2001 performed by, Ehrenkrantz Sterling & Co. LLC, certain additional
          financial statement adjustments were proposed and accepted by us for
          the periods noted above. See Note 2, "Significant Accounting Policies"
          of notes to the consolidated financial statements.


                                       37
<PAGE>

                      Selected Consolidated Financial Data
                  (Amounts in thousands except per share data)
<TABLE>
<CAPTION>
                                                                                                       Predecessor
                                             Successor Company                                      Company(1)(2)(3)(4)
                                             -----------------                                      -------------------
                                                                   Eight Months   Four Months     (Restated)      (Restated)
                                       Year Ended    Year Ended       Ended          Ended        Year Ended      Year Ended
                                      December 31,   December 31,  December 31,    April 30,      December 31,    December 31,
                                          2004          2003          2002           2002            2001            2000
                                          ----          ----          ----           ----            ----            ----
<S>                                 <C>            <C>            <C>            <C>            <C>            <C>
Revenues                            $    36,880    $    54,485    $    36,617    $    22,373    $    90,265    $    95,756
Operating Loss                          (46,587)       (48,739)       (35,531)       (21,649)      (120,491)      (191,845)
Income (loss) before
reorganization items                    (72,329)       (62,122)       (58,786)       (24,138)      (267,000)      (134,851)
                                    -----------    -----------    -----------    -----------    -----------    -----------

Reorganization items                         --             --           (772)       256,116         (2,497)        (3,035)

Income tax provision                         --             --             --             --             --             --
                                    -----------    -----------    -----------    -----------    -----------    -----------
Net (loss) income                       (72,329)       (62,122)       (59,558)       231,978       (269,497)      (137,886)

XM radio preferred stock
dividend requirement                         --             --             --             --             --         (5,081)

XM beneficial conversion                     --             --             --             --             --        (44,438)
                                    -----------    -----------    -----------    -----------    -----------    -----------

Net (loss) income before
cumulative effect of accounting
change                              $   (72,329)   $   (62,122)   $   (59,558)   $   231,978    $  (269,497)   $  (187,405)


Cumulative effect of change in
accounting principle                         --             --             --             --             --         (4,677)

Net (loss) income attributable
to common shareholders              $   (72,329)   $   (62,122)   $   (59,558)   $   231,978    $  (269,497)   $  (192,082)
                                    ===========    ===========    ===========    ===========    ===========    ===========

Basic and diluted net income
(loss) per common share             $     (2.21)   $     (2.47)   $     (2.37)   $      3.98    $     (5.27)   $     (3.89)
Weighted-average common shares
outstanding during the period -
basic and diluted                        32,771         25,145         25,097         58,251         51,136         49,425
Total assets                            248,080        157,028        202,221        257,401        240,465      1,572,036
Long term liabilities               $       675    $    33,189    $    33,913    $    29,785    $    30,652    $   753,376
</TABLE>

                                       38
<PAGE>


(1) Motient restated certain of its financial data reflected above to reflect
certain transactions with MSV in 2000 and 2001, the sale of assets to Aether
Systems in 2000 and certain additional adjustments. For further information,
please see Note 2, "Significant Accounting Policies - Restatement of Financial
Statements," of notes to the consolidated financial statements herein.

(2) As of December 31, 2000, we had an equity interest of approximately 33.1%
(or 21.3% on a fully diluted basis) in XM Radio, a public company that launched
its satellite radio service at the end of 2001, and we controlled XM Radio
through our board of director membership and common stock voting rights. As a
result, all of XM Radio's results for the period from July 7, 1999 (the date we
acquired 100% voting interest of XM Radio) through December 31, 2000 have been
included in our consolidated financial statements. Prior to July 7, 1999, our
investment in XM Radio was accounted for pursuant to the equity method of
accounting. In January 2001, pursuant to FCC approval to cease to control XM
Radio, the number of directors that we appointed to XM Radio's board of
directors was reduced to less than 50% of XM Radio's directors, and we converted
a portion of our super-voting Class B common stock of XM Radio to Class A common
stock. As a result, we ceased to control XM Radio, and as of January 1, 2001, we
accounted for our investment in XM Radio pursuant to the equity method of
accounting. During 2001, we disposed of all of our remaining shares of XM Radio
and ceased to hold any interest in XM Radio as of November 19, 2001.

(3) In June 2000, we formed a joint venture subsidiary, MSV, in which we owned
80% of the membership interests. The remaining 20% interests in MSV were owned
by three investors unrelated to Motient; however, the minority investors had the
right to participate in certain MSV business decisions that were made in the
normal course of business; therefore, in accordance with EITF Issue No 96-16,
"Investor's Accounting for an Investee When the Investor Has a Majority of the
Voting Interest but the Minority Shareholder or Shareholders Have Certain
Approval or Veto Rights", our investment in MSV has been recorded for all
periods presented in the consolidated financial statements included in this
annual report pursuant to the equity method of accounting. On November 26, 2001,
Motient sold the assets comprising its satellite communications business to MSV.
For further information, please see Note 1, "Organization and Going Concern" of
notes to the consolidated financial statements herein.

(4) In November 2000, Motient sold assets related to its retail transportation
business to Aether Systems. Concurrently with the closing of the asset sale, we
and Aether Systems entered into two long-term, prepaid network airtime
agreements with a total value of $20 million, of which $5 million was paid at
closing, pursuant to which Aether Systems agreed to purchase airtime on
Motient's satellite and terrestrial networks. Aether Systems also became an
authorized reseller of Motient's eLink and BlackBerry(TM) by Motient wireless
email service offerings. Aether Systems acquired all of the assets used or
useful in the retail transportation business, and assumed the related
liabilities. Aether Systems also purchased the existing inventory in the
business. For further information, please see Note 1 "Organization and Going
Concern" of notes to the consolidated financial statements herein.


                                       39
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
--------------

Overview and Introduction

The following Management's Discussion and Analysis is intended to help the
reader understand Motient Corporation. It is provided as a supplement to, and
should be read in conjunction with, our financial statements and the
accompanying notes.

It should also be read and understood in the context of several material
accounting issues, namely the effect of fresh-start accounting following our
emergence from bankruptcy on May 1, 2002.

Core Wireless Business

We are a nationwide provider of two-way, wireless mobile data services and
wireless internet services. We own and operate a wireless radio data network
that provides wireless mobile data service to customers across the United
States, and we generate revenue primarily from the sale of airtime on this
network and from the sale of communications devices to our customers. Our
customers use our network and our wireless applications for wireless email
messaging and wireless data transmission, enabling businesses, mobile workers
and consumers to wirelessly transfer electronic information and messages and to
access corporate databases and the Internet. Our network is designed to offer a
broad array of wireless data services, such as:

o    two-way mobile internet services, including our own eLink(SM) wireless
     email service and our BlackBerry(TM) by Motient wireless email service,
     each

                                       40
<PAGE>

     providing their users with wireless access to a broad range of email and
     information services to personal consumers and corporate customers;

o    wireless data systems used by companies involved in data transmission and
     processing, used to connect remote equipment, such as wireless
     point-of-sale terminals, with a central monitoring facility; and

o    mobile data and mobile management systems used by transportation and other
     companies to wirelessly coordinate remote, mobile assets and personnel.

In addition to selling wireless data services that use our own network, we are
also a reseller of airtime on the Cingular and Sprint wireless networks. We have
reseller agreements with these companies that allow us to sell and promote
wireless data applications and solutions to our customers using these networks
which are more modern and have greater capacity than our own, while still
maintaining a direct relationship with the customer, since "back office"
functions like customer support, application design and implementation, and
billing, among other support services, are handled by Motient.

These arrangements allow us to provide integrated seamless wireless data
solutions to our customers using a variety of networks. In December 2004, we
launched a new set of products and services designed to provide these seamless
solutions to our customers called iMotient Solutions(TM). iMotient allows
Motient's customers to use these multiple networks via a single connection to
Motient's back-office systems, providing a single alternative for application
and software development, device management and billing across multiple
networks, including but not limited to GPRS, 1XRTT and our own DataTac network.
Once connected to iMotient, customers will receive our proprietary applications
and services that reduce airtime usage, improve performance and reduce costs. As
of February 1, 2005, we have not generated any revenues from iMotient
Solutions(TM), however, we have recently signed several customer agreements and
anticipate generating revenue in the near term. We believe our iMotient
Solutions suite of products and services will be our primary source of new
revenue for 2005 and beyond, and we are focusing the majority of our
development, sales and marketing efforts on this area.

Of our revenues for the year ended December 31, 2004, approximately 50% were
generated in connection with our own eLink(SM) wireless email service and our
BlackBerry(TM) by Motient wireless email service, our "wireless internet" market
segment. These wireless email services are utilized by our customers primarily
in conjunction with Research In Motion's RIM 850 and 857 wireless handheld
devices. The RIM 850 device is no longer manufactured and on June 26, 2003
Research In Motion provided us with a written End of Life Notification for the
RIM 857 wireless handheld device.

                                       41
<PAGE>

Aside from our ability to obtain this hardware, the End of Life Notification by
Research In Motion may be considered indicative of the desire of Research In
Motion in particular and consumers in general to move to new technologies that
cannot be supported on Motient's network, such as wireless handheld devices that
are data and voice capable. We expect our revenues from these products will
continue to decline, but we will attempt to capture revenue from the migration
of our wireless internet customers to newer technologies through our reseller
agreements with RACO Wireless, Inc. and eAcess Solutions, Inc. which allows us
to receive a one-time commission for signing up customers to use alternative
network providers wireless internet service. We are also exploring alternatives
ways to provide comparable wireless internet services, using either our DataTac
network or our iMotient Solutions(TM) platform, however if we are unsuccessful
in these efforts, our wireless internet revenue base will continue to decline
and we will need to increase revenues from other sources.

In addition to focusing on iMotient Solutions, we plan to focus our growth
efforts on applications that make efficient use of our existing DataTac network.
Certain applications have certain key attributes that make efficient use of the
Motient DataTac network. For example, applications to conduct wireless
point-of-sale transactions, and transportation and dispatching applications,
typically have small bandwidth requirements and can be designed to utilize our
network on a 24 hours per day, 7 days per week basis, thus smoothing loading
requirements and optimally using our existing DataTac network capacity. We
believe that these kinds of applications are poised for significant growth and
that this growth can be accommodated efficiently on our existing DataTac
network, and we have signed agreements with several resellers that specialize in
these kinds of applications.

We also intend to take advantage of this loss of wireless internet customers by
undertaking to reduce our overall network cost structure. Additionally, this
reduction in overall cost structure may be considered necessary given a variety
of factors that have hindered our growth since our emergence from bankruptcy in
May 2002, including the weak economy generally and the weak telecommunications
and wireless sector specifically, the financial difficulty of several of our key
resellers, on whom we rely for a majority of our new revenue growth, and our
continued limited liquidity. We believe that these cost reduction efforts will
assist in lowering our cash burn rate.

                                       42
<PAGE>

Our most significant ongoing cost reduction effort involves reducing the number
of base stations in our network in a coordinated effort to reduce network
operating costs. Over the course of 2004, Motient implemented and completed
certain initiatives to rationalize the size of its network, primarily to remove
unprofitable base stations and reduce unneeded capacity and coverage. During the
first quarter of 2005, Motient initiated a plan to refocus its DataTac network
primarily on the Top 40 Metropolitan Statistical Areas (MSAs). This plan
involves the decommissioning of DataTac network components and termination of
service in previously served MSAs above the Top 40. Given the similar coverage
profiles of the Cingular and Sprint networks, the significantly increased
bandwidth capabilities of these networks relative to the DataTac network and the
concentration of our revenues in the Top 40 MSAs, we determined that this plan
best allowed us to match our network infrastructure costs with our revenue base,
while continuing to meet the needs of as many of our customers as possible. We
have notified our customers of this change in our network coverage and this
decommissioning will begin on June 1, 2005. We are making every effort to
provide any impacted customers with alternatives to migrate their services and
applications either to our new iMotient Solutions(TM) platform, or to other
networks using our agreements with RACO Wireless, Inc. and eAccess Solutions,
Inc. As a result of these network rationalization efforts, our 800 MHz FCC
licenses may be lost in markets to which we are discontinuing service. We
believe that the value of our FCC licenses in these smaller markets is very
small compared to the value of our FCC licenses in the top 40 MSAs. While we are
taking steps to avoid this possibility, and while we believe that any such
losses would not be material to our business, we can provide no assurance that
any such losses would not negatively impact our business. If we were to loose
any of these licenses, we would have to write-off the value of these assets. We
believe that the value of the licenses that may be in jeopardy represents about
5% of the total value of our 800 MHz FCC licenses. If our network
rationalization efforts expanded into the top 40 MSAs, our write-off would be
correspondingly larger if we were unable to retain the FCC licenses in such
markets.

Despite these efforts, we continue to be cash flow negative, and there can
be no assurances that we will ever be cash flow positive.

Mobile Satellite Ventures LP

As of March 15, 2005, we also own a 49% direct and indirect interest in Mobile
Satellite Ventures LP (commonly known as MSV), a provider of mobile
satellite-based communications services. Although Motient has certain rights to
appoint directors to the sole general partner of MSV, as a limited partner, it
does not have any direct or indirect operating control over MSV. MSV uses two
satellites to provide service, which allow customers access to satellite-based
wireless data, voice, fax and dispatch radio services almost anywhere in North
and Central America, northern South America, the Caribbean, Hawaii and in
various coastal waters.

MSV is also developing a next-generation system, a hybrid satellite/terrestrial
wireless network over North America that MSV expects will utilize new satellites
working with MSV's patented "ancillary terrestrial component", or "ATC",
technology. After the deployment of its next-generation system, MSV anticipates
that it will be able to deploy terrestrial two-way radio network technology in
thousands of locations across the United States, allowing subscribers to
integrate satellite-based communications services with more traditional
land-based wireless communications services.

MSV was formed on June 29, 2000, when we formed a joint venture subsidiary in
which we owned 80% of the membership interests. The remaining 20% interests in
MSV were owned by three investors unrelated to Motient; however, the minority
investors had certain participating rights which provided for their
participation in certain business decisions that were made in the normal course
of business; therefore, in accordance with Emerging Issues Task Force Issue No
96-16, "Investor's Accounting for an Investee When the Investor Has a Majority
of the Voting Interest but the Minority Shareholder or Shareholders Have Certain
Approval or Veto Rights", our investment in MSV has been recorded for all
periods presented in the consolidated financial statements included in this
annual report pursuant to the equity method of accounting.


                                       43
<PAGE>

Since its formation, we and other parties have undertaken on multiple occasions
to invest capital into MSV. Our current ownership of MSV reflects the result of
such investment.

Motient's investment in MSV is governed by several agreements, including but not
limited to the limited partnership agreement of MSV and the stockholder's
agreement of MSV GP. The acquisition or disposition by MSV of its assets, the
acquisition or disposition of any limited partner's interest in MSV, subsequent
investment into MSV by any person, and any merger or other business combination
of MSV, would be subject to the control restrictions contained in such
documents. Such control restrictions include, but are not limited to, rights of
first refusal, tag along rights and drag along rights. Many of these actions,
among others, cannot occur without the consent of the majority of the ownership
interests of MSV, and the limited partners of MSV entered into a voting
agreement, which may restrict any signatories ability to give such consent
absent the agreement of the majority of the signatories to such voting
agreement.

Results of Operations

Years Ended December 31, 2004 and 2003

In the year ended December 31, 2004, we experienced the loss of certain large
customer contracts, such as Schindler and Pitney Bowes, and a general erosion in
our customer base, primarily as a result of those customers' desire to utilize
newer wireless technologies, such as GPRS or CDMA, which we cannot support on
our wireless network. The majority of this decline in revenue was due to a
decline in our wireless internet segment, which was driven generally by the
aforementioned desire to move to newer technologies, as well as the termination
of the manufacture of RIM 857 devices by Research in Motion in late 2003, which
were the only RIM devices then produced for use on our network and the most
common wireless internet device used on our network. We are not able to utilize
any newer RIM devices on our network. As a result of this revenue decline, we
have been required to take numerous actions to reduce our cost structure and
change our operating strategy, which included reductions in the number of
employees and changes in senior management and a reduction in our DataTac
network coverage, among other things. We believe that several components of our
cost structure are much larger than required for our relative business size, and
we believe that we can continue to reduce our cost structure in our continued
efforts to improve our profitability. We are exploring alternatives ways to
provide comparable wireless internet services, using either our DataTac network
or our iMotient Solutions platform, however if we are unsuccessful in these
efforts, our wireless internet revenue base will continue to decline and we will
need to increase revenues from other sources. We believe our iMotient
Solutions suite of products and services will be our primary source of new
revenue for 2005 and beyond, and we are focusing the majority of our
development, sales and marketing efforts on this area.


                                       44
<PAGE>

Subscriber Statistics

Our customer base can be generally divided into five broad categories, Wireless
Internet, Field Services, Transportation, Telemetry and Other. Wireless Internet
primarily consists of customers using our network and applications to access
certain internet functions, like email. Devices and airtime used by
transportation and shipping companies, or by personnel in the field service
industries (such as repair personnel), for dispatching, routing and other vital
communications functions are known as Transportation and Field Service,
respectively. Telemetry typically covers devices and airtime used to connect
remote equipment, such as wireless point-of-sale terminals, with a central
monitoring facility. Other revenues may consist of sales commissions, consulting
fees or development fees.

The table below summarizes the make up of our subscriber base. Wireless devices
may be divided into three categories: registered, active and billable.
Registered devices represent devices that our customers have registered for use
on our network. Certain numbers of these devices may be kept in inventory by our
customers for future use and generally are not revenue producing. Customers can
move such inventory into a production status upon which it typically becomes
billable and generates revenue. However, billable units may not pass traffic and
thus will not be counted as active. We count a device as active when it is
removed from inventory by the customer and transmits greater than zero kilobytes
of data traffic. All billable and active units are registered on our network.
<TABLE>
<CAPTION>
                                             As of December 31,
                                    2004                              2003
                                                                                                      % Change
                         Registered   Billable   Active  Registered  Billable  Active     Registered  Billable    Active
                         ----------   --------   ------  ----------  --------  ------     ----------  --------    ------
<S>                       <C>          <C>       <C>      <C>        <C>       <C>            <C>         <C>       <C>
Wireless Internet         47,328(1)    35,366    20,126   106,600    69,673    51,179         (56)%       (49)%     (61)%
Field Services             7,437        7,360     4,896    17,468    16,415     9,851         (57)%       (55)%     (50)%
Transportation            46,721       41,013    40,621    45,902    39,344    39,513           2%          4%        2%
Telemetry                 30,107       22,640    11,484    32,420    23,947    13,444          (7)%        (5)%     (15)%
All Other                    256          180       156     1,305     1,043       584         (80)%       (83)%     (73)%
                         -------      -------   -------   -------   -------   -------       -------     -------   -------
  Total                  131,489      106,559    77,283   203,695   150,422   114,571         (35)%       (29)%     (33)%
                         =======      =======    ======   =======   =======   =======       =======     =======   =======
</TABLE>


1) Reflects deregistration of units by SkyTel on December 30, 2004 of
approximately 30,000 units.

                                       45
<PAGE>

Revenue

The table below sets forth, for the periods indicated, a year-over-year
comparison of the key components of our revenue:

<TABLE>
<CAPTION>
                                 Year Ended December 31,
                             --------------------------------
Summary of Revenue               2004               2003         Change      % Change
------------------               ----               ----         ------      --------
<S>                             <C>                <C>           <C>            <C>
(in millions)
Wireless Internet               $18.3              $27.8         $(9.5)         (34)%
Field Services                    5.6                9.9          (4.3)         (43)
Transportation                    3.3                7.9          (4.6)         (58)
Telemetry                         2.3                2.3           0.0            0
All Other                         2.9                1.4           1.5          107
                                -----              -----        ------          ---
   Service Revenue              $32.4              $49.3         (16.9)         (34)
   Equipment Revenue              4.5                5.2          (0.7)         (13)
                                -----              -----        ------          ---
         Total                  $36.9              $54.5        $(17.6)         (32)%
                                =====              =====        ======          ===
</TABLE>


The decrease in service revenue in 2004 as compared to 2003 was primarily the
result of the loss of certain large accounts and a material decrease in wireless
internet revenue, with additional decreases in field services and transportation
revenues. UPS deactivated a significant number of units on our network during
the third and fourth quarters of 2003 and our revenue from UPS declined
significantly during this period, resulting in the majority of the decline in
transportation revenues. This revenue decline was marginally offset by our
ability to generate some commissions from the transition of our wireless
internet customers to newer technologies under our reseller agreements with
Verizon and T-Mobile (we terminated these agreements in the fourth quarter of
2004 in connection with entering into our agreements with Cingular and Sprint).
We anticipate that our wireless revenue will continue to decline in 2005 as a
result of the continued decrease in our wireless internet customer base. By
market segment, we note:

     o    Wireless Internet: The revenue decline in the wireless internet sector
          during this period was driven almost exclusively by the migration of
          our wireless internet customers to newer technologies and newer
          wireless internet products (for example, RIM wireless email devices
          that incorporate a wireless telephone, which cannot be used on our
          network). Additionally, the termination of the manufacture of 857
          devices by Research in Motion greatly hampered our ability as well as
          our larger resellers' ability to add new wireless internet customers
          to our network. We anticipate that our wireless internet revenue will
          continue to decline in 2005 for similar reasons.

     o    Field Service: The decrease in field service revenue is primarily the
          result of the termination of several customer contracts, including
          Schindler, Sears, Lanier, and Pitney Bowes, as well as the general
          reduction of units and rates across the remainder of our field service
          customer base. Schindler's revenue increased slightly due to a $0.25
          million contract termination fee that was billed and collected in
          third quarter of 2004. We believe that the technology requirements of
          this market segment are more compatible with our network than the
          wireless internet market segment, and we are making efforts to grow
          this segment.

     o    Transportation: The decrease in revenue from the transportation sector
          was primarily the result of UPS, beginning in July 2003, having
          removed a significant number of their units from our network. UPS
          represented $0.2 million and $0.9 million of revenue for the three and
          twelve months ended December 31, 2004, as compared to $0.3 million and
          $5.5 million of revenue for the three and twelve months ended December
          31, 2003. We did, however, also continue to experience growth during

                                       46
<PAGE>

          2004 in other transportation accounts, most notably Aether and
          Roadnet. We believe that the technology requirements of this market
          segment are more compatible with our network than the wireless
          internet market segment, and we are making efforts to grow this
          segment.

     o    Telemetry: While we experienced revenue growth in certain telemetry
          customer accounts, this revenue growth was equally offset by customer
          losses or negative rate changes in other telemetry accounts. We
          believe that the technology requirements of this market segment are
          more compatible with our network than the wireless internet market
          segment, and we are making efforts to grow this segment.

     o    Other Revenue: The increase in other revenue for the year ended
          December 31, 2004 was attributable to the settlement of a take-or-pay
          contract with Wireless Matrix resulting in the recognition of $1.6
          million of revenue and approximately $0.7 million of commissions
          earned via the agency and dealer agreements with Verizon Wireless and
          T-Mobile USA. Our efforts to sell and promote wireless email and
          wireless internet applications to enterprise accounts under our agent
          relationships with T-Mobile USA and Verizon Wireless were reduced
          significantly in the third and fourth quarter of 2004, which we
          anticipate will lead to a decline in these revenues in the future,
          unless we can improve our efforts in this area or refocus our efforts
          in this revenue segment to a different vendor/strategy. We terminated
          these agreements in order to enter into our resale agreements with
          Cingular and Sprint and launch our new iMotient Solutions(TM)
          platform.

     o    Equipment Revenue: The decrease in equipment revenues for the year
          ended December 31, 2004 was the result of the decline in sales of
          wireless internet devices as compared to the year ended December 31,
          2003 and the third and fourth quarter decline in the sale of devices
          attributable to agency and dealer agreements with Verizon Wireless and
          T-Mobile USA.

For the year ended December 31, 2004, four customers accounted for approximately
40% of our service revenue, with one customer, SkyTel, accounting for more than
22%. As of December 31, 2004, one customer, RIM, accounted for more than 13% of
our net accounts receivable. No other single customer accounted for more than
10% of our net accounts receivable. The revenue attributable to such customers
varies with the level of network airtime usage consumed by such customers, and
none of the service contracts with such customers requires that the customers
use any specified quantity of network airtime, nor do such contracts specify any
minimum level of revenue. There can be no assurance that the revenue generated
from these customers will continue in future periods.

                                       47
<PAGE>

Expenses

The table below summarizes, for the periods indicated, a year-over-year
comparison of the key components of our operating expenses.

<TABLE>
<CAPTION>

                                                              Year Ended December 31,
                                                        -------------------------------
Summary of Expenses                                       2004(1)            2003(2)          Change       % Change
-------------------                                       -------            -------          ------       --------
<S>                                                        <C>                <C>             <C>            <C>
(in millions)
Cost of Service and Operations                             $39.6              $51.4           $(11.8)        (23)%
Cost of Equipment Sales                                      4.3                5.9             (1.6)        (27)
Sales and Advertising                                        1.9                4.6             (2.7)        (59)
General and Administration                                  13.2               11.3              1.9          17
Operational Restructuring and Impairment Costs               6.3                 --              6.3           0
Depreciation and Amortization                               15.6               21.5             (5.9)        (27)
Loss on Disposal of Assets                                   2.7                3.0             (0.8)        (26)
Loss on Impairment of Asset                                  0.8                5.5             (4.7)        (85)
Gain on Debt and Capital Lease Retirement                   (0.8)                --             (0.8)          0
                                                           -----             ------           -------       -----
         Total Operating                                   $83.6             $103.2           $(20.1)        (19)%
                                                           =====             ======           =======       =====
</TABLE>

               (1)  Includes compensation expense of $6.5 million related to the
                    market value of employee stock options and $3.6 million of
                    stock compensation expense for directors and consultants.

               (2)  Includes compensation expense of $0.6 million related to the
                    market value of employee stock options.


     o    Cost of Service and Operations: Our largest single cost center is the
          cost of service and operations, which includes costs to support
          subscribers, such as network telecommunications charges and site rent
          for network facilities, network operations employee salary and related
          costs, network and hardware and software maintenance charges, among
          other things. As a percentage of total revenues, these costs totaled
          approximately 107% for 2004, as compared to 94% in 2003. Our aggregate
          expenses in this area decreased $11.8 million, or $16.0 million,
          excluding certain non-cash compensation charges. Given our ongoing
          cost-reduction efforts described above, we expect these costs will
          continue to decrease. The extent of the decrease will depend both upon
          our ability to successfully manage our cost-reduction efforts as well
          as the necessity for these expenditures in the future if our revenue
          continues to decline. Additionally, any decreases would be offset by
          additional non-cash compensation expense related to currently
          outstanding employee stock options if the market price of our common
          stock continues to increase. (See "--2002 Stock Option Plan" below).
          The decrease in 2004 is primarily due to:

          o    lower employee salary and related costs due to the workforce
               reductions implemented in March of 2003 and February of 2004, of
               approximately $2.3 million from 2003 to 2004.
          o    the decrease in licensing fees paid primarily to RIM for
               licensing Blackberry as a result of the decline of wireless
               internet units and revenues, of approximately $0.8 million from
               2003 to 2004.
          o    lower network maintenance costs as a result of the termination of
               our national maintenance contract with Motorola at December 31,
               2003, of approximately $4.4 million from 2003 to 2004, as well as
               the continued removal of older-generation base stations from the
               network and the removal of base stations under our network
               rationalization efforts initiated in the second quarter of 2004.
               We currently perform our maintenance on our base stations by

                                       48
<PAGE>

               contracting directly with service shops in respective regions,
               which has materially lowered our cost relative to our prior
               national maintenance contract.
          o    lower site lease costs, of approximately $1.8 million from 2003
               to 2004, and telecommunications costs, of approximately $3.0
               million from 2003 to 2004, for base station locations as a result
               of the removal of base stations as part of our efforts to remove
               older-generation equipment from our network and the removal of
               base stations under our network rationalization efforts initiated
               in the second quarter of 2004. As we continue to remove base
               stations from the network, we anticipate that these costs will
               continue to decrease.
          o    reductions in hardware and software maintenance costs as a result
               of the negotiation of lower rates on maintenance service
               contracts in 2003 and 2004, the reduction of software licenses as
               a result of having fewer employees and a decrease in software
               development costs as a result of a change in capitalization
               policy, of approximately $1.1 million from 2003 to 2004.

          These decreases were partially offset by:

          o    higher compensation expenses associated with stock options issued
               to employees of $4.4 million for the year ended December 31,
               2004, as compared to $0.2 million for the year ended December 31,
               2003. Excluding these compensation charges, cost of service and
               operations decreased $16.0 million, or 31% for the year ended
               December 31, 2004, as compared to the comparable period in 2003.

     o    Cost of Equipment and Sales: The decrease in cost of equipment for the
          year ended December 31, 2004 was the result of the decline in sales of
          wireless internet devices and a decline in the third and fourth
          quarter of the sale of devices attributable to agency and dealer
          agreements with Verizon Wireless and T-Mobile USA. Our efforts to sell
          under our agent relationships with T-Mobile USA and Verizon Wireless
          were reduced significantly in the third and fourth quarter of 2004 and
          these contracts were terminated in the fourth quarter of 2004 to
          accommodate our agreements with Sprint and Cingular. As our sales of
          these devices will decrease in the future, so will these costs.

     o    Sales and Advertising: Sales and advertising expenses as a percentage
          of total revenue totaled approximately 5% for 2004, compared to 8% for
          2003. The decrease in sales and advertising expenses for the year
          ended December 31, 2004 was primarily attributable to lower employee
          salary and related costs, of approximately $1.9 million from 2003 to
          2004, including sales commissions of approximately $0.5 million from
          2003 to 2004, due to lower sales volumes and the workforce reductions
          implemented in March 2003 and February 2004. These decreases were also
          impacted by compensation charges associated with stock options issued
          to employees of $0.4 million for the year ended December 31, 2004, as
          compared to $0.2 million for the year ended December 31, 2003.
          Excluding these compensation charges, sales and advertising decreased
          $3.0 million, or 67% for the year ended December 31, 2004, as compared
          to the comparable period in 2003. We anticipate that these costs will

                                       49
<PAGE>

          increase in the future in conjunction with our increasing efforts to
          sell and promote our iMotient Solutions(TM) platform. Additionally, we
          may experience additional non-cash compensation expense related to
          currently outstanding employee stock options if the market price of
          our common stock continues to increase. (See "--2002 Stock Option
          Plan" below).

     o    General and Administrative: General and administrative expenses for
          the core wireless business as a percentage of total revenue totaled
          approximately 36% for 2004 as compared to 21% for 2003. Our aggregate
          expenses in this area increased $1.9 million or 17%. However,
          excluding certain compensation changes related to stock options,
          general and administrative decreased $3.1 million, or 28% for the year
          ended December 31, 2004, as compared to 2003. The decrease in general
          and administrative expenses was primarily attributable to:

          o    lower employee salary and related costs due to the workforce
               reductions implemented in March of 2003 and February of 2004 of
               approximately $0.4 million from 2003 to 2004,
          o    lower rent expense as a result of the closure of our Reston
               facility in July 2003, of approximately $0.6 million from 2003 to
               2004,
          o    lower audit and tax fees, of approximately $0.2 million from 2003
               to 2004, and
          o    a reduction in bad debt reserves primarily due to lower accounts
               receivables balances as a result of improvements in our
               collection capabilities, of approximately $0.5 million from 2003
               to 2004.

These decreases were offset by:

          o    increases in legal and regulatory fees, of approximately $0.1
               million from 2003 to 2004,
          o    higher consulting expenses as a result of the $1.8 million
               expensed in 2004 primarily related to CTA's monthly fees and
               certain stock options issued to CTA in December of 2004.
               Compensation expenses in 2003 was impacted by $0.9 million
               expensed for the Further Lane warrants in 2003,
          o    higher expenses related to Board compensation of $1.0 million,
               due primarily to the issuance of restricted stock to the Board in
               2004,
          o    higher bonus compensation expense due to the reversal of certain
               accrued bonuses in 2003 as a result of workforce reductions, and
          o    increases in compensation expenses associated with stock options
               issued to employees of $1.8 million and $3.6 million of stock
               compensation expense for directors and consultants for the year
               ended December 31, 2004, as compared to $0.2 million in 2003.


          We anticipate that these costs will continue to decline in the future
          in conjunction with our overall cost-cutting efforts. However, any
          decreases would be offset by additional non-cash compensation expense
          related to

                                       50
<PAGE>

          currently outstanding employee stock options if the market price of
          our common stock continues to increase. (See "--2002 Stock Option
          Plan" below).

     o    Restructuring and Impairment Charges: There were no restructuring
          costs in 2003. The operational restructuring and impairment charges in
          the first quarter of 2004 resulted from the severance and related
          salary charges as a result of the reduction in force in February 2004
          and certain costs as a result of base station deconstruction
          activities as part of our on-going network rationalization efforts. In
          the second quarter of 2004, we took an operational restructuring
          charge of $5.2 million related to these network rationalization
          efforts.

          In the second quarter of 2004, we finalized plans to implement certain
          network station rationalization initiatives. These initiatives involve
          the de-commissioning of base stations from our network. We had 1,549
          base stations in our network as of March 31, 2004, and as of December
          31, 2004, we have 1,239 base stations in our network. We took these
          actions in a coordinated effort to reduce network operating costs
          while also focusing on minimizing the potential impact to our
          customers communications and coverage requirements. We were
          substantially complete with these network rationalization initiatives
          in December 2004. Additionally, during the first quarter of 2005,
          Motient initiated a plan to refocus its DataTac network primarily on
          the Top 40 Metropolitan Statistical Areas (MSAs). This plan involves
          the decommissioning of DataTac network components and termination of
          service in previously served MSAs above the Top 40. Given the similar
          coverage profiles of the Cingular and Sprint networks, the
          significantly increased capacity capabilities of these networks
          relative to DataTac and the concentration of our revenues in the Top
          40 MSAs, we determined that this plan best allowed us to match our
          network infrastructure costs with our revenue base, while continuing
          to meet the needs of as many of our customers as possible. We have
          notified our customers of this change in our network coverage and this
          decommissioning will begin on June 1, 2005. We are making every effort
          to provide any impacted customers with alternatives to migrate their
          services and applications either to our new iMotient Solutions
          platform, or to other networks using our agreements with RACO
          Wireless, Inc. and eAccess Solutions, Inc. We expect that the costs
          associated with this de-commissioning will be lower than in 2004. We
          anticipate that a major component of these costs will be the write-off
          of our de-commissioned base stations (anticipated to be approximately
          $1.2 million). However, any future programs of de-commissioning could
          result in increased expenditures in this area. No such additional
          programs are planned at this time.

     o    Depreciation and Amortization: Depreciation and amortization for the
          core wireless business was approximately 42% of total revenue for
          2004, as compared to 39% for 2003. The decrease in depreciation and
          amortization expense in 2004 was partially attributable to the
          impairment of the value of our customer contract intangibles as of
          September 2003, as well as the write-off of certain base station
          assets in June 2004 as a result of our network restructuring
          initiatives. As a result of our additional impairment of our customer
          contract intangibles in December 2004 as well as continued network
          restructuring initiatives planned in 2005, we expect depreciation and
          amortization to continue to decrease in 2005.

                                       51
<PAGE>

     o    Loss on Impairment of Assets and Loss on Disposal of Assets: In May
          2004, we engaged a financial advisory firm to prepare a valuation of
          customer contract intangibles as of September 2003. Due to the loss of
          UPS as a core customer in 2003 as well as the migration and customer
          churn occurring in our wireless internet base that is impacting the
          average life of a customer in this base, among other things, we
          determined an impairment of the value of these customer contracts was
          probable. As a result of this valuation, the value of customer
          contract intangibles was determined to be impaired as of September
          2003 and was reduced by $5.5 million. In addition, in December 2004,
          we performed an additional analysis on the impact of our revenue
          decline on our customer contract intangibles. As a result, we
          determined that the value of our customer contract intangibles was
          further impaired and was reduced by $0.8 million.

          On July 29, 2003, our wholly-owned subsidiary, Motient Communications,
          entered into an asset purchase agreement with Nextel, under which
          Motient Communications sold to Nextel certain of its SMR licenses
          issued by the FCC for $3.4 million. The closing of this transaction
          occurred on November 7, 2003. On December 9, 2003, Motient
          Communications entered into a second asset purchase agreement, under
          which Motient Communications will sell additional licenses to Nextel
          for $2.75 million resulting in a $1.5 million loss which was recorded
          in December, 2003. In February, 2004, we closed the sale of licenses
          covering approximately $2.2 million of the purchase price, and we
          closed the sale of approximately one-half of the remaining licenses in
          April 2004. The transfer of the other half of the remaining licenses
          has been challenged at the FCC by a third-party. While we believe,
          based on the advice of counsel, that the FCC will ultimately rule in
          our favor, we cannot assure you that we will prevail, and, in any
          event, the timing of any final resolution is uncertain. None of these
          licenses are necessary for our future network requirements. We
          recorded a loss on the sale of certain assets of $3.0 million,
          consisting of $1.5 million on the sale of frequencies to Nextel
          (discussed above) and approximately $1.5 million relating to the
          write-off of consulting costs and equipment purchased for our project
          to convert our telecommunications circuits from an analog to a digital
          base. This project was discontinued in favor of our TCPIP/Frame Relay
          conversion project.

          In June 2004, we negotiated settlements of our vendor financing and
          notes payable with Motorola and our capital lease with
          Hewlett-Packard. These settlements resulted in a gain on debt and
          capital lease retirements of $0.8 million.


Other Expenses & Income

<TABLE>
<CAPTION>
                                                      Year Ended        Year Ended
                                                     December 31,      December 31,
Other Income/(Expense)                                   2004              2003
----------------------                                   ----              ----
<S>                                                     <C>             <C>
(in thousands)
Interest Expense, net                                  $(4,106)        $(6,365)
Write -off of deferred financing costs                 (12,035)             --
Other Income, net                                          343             662
Other Income from Aether                                 1,953           2,203
Equity in Losses of Mobile Satellite Ventures         $(11,897)        $(9,883)
</TABLE>


                                       52
<PAGE>

Interest Expense: Interest expense decreased for the year ended December 31,
2004, as compared to the year ended December 31, 2003, due primarily to the
April 2004 repayment of our term credit facility and the July 2004 repayments of
our notes payable to Motorola, Rare Medium and CSFB, and the termination of our
capital lease with Hewlett-Packard.

Write-off of deferred financing fees: The April 2004 repayment of our term
credit facility and the subsequent termination on December 31, 2004, resulted in
the requirement to immediately expense $12.0 million in financing fees related
to the credit facility. The financing fees related to the credit facility
represent the unamortized portion of the value ascribed to warrants provided to
the term credit facility lenders on our closing of our credit facility in
January of 2003 and the subsequent amendment in March 2004. We issued warrants
to these same lenders at closing of the subsequent amendment in March 2004 to
the lenders to purchase, in the aggregate, 1,000,000 shares of our common stock.
The exercise price for these warrants is $4.88 per share. The warrants were
valued at $6.7 million using a Black-Scholes pricing model and have been
recorded as a debt discount and were being amortized as additional interest
expense over three years, the term of the related debt. Upon closing of the
amendment to the credit agreement, we also paid closing and commitment fees to
the lenders of $320,000, which were also being amortized over three years.

Interest expense is presented net of interest income on our bank balances and
the interest accrued on our note receivable from MSV. As a result of November
2004 investment transaction into MSV, the principal and interest outstanding
under our note receivable from MSV was converted into limited partnership units
in MSV.

In July 2004, we repaid all amounts outstanding under our notes payable to Rare
Medium and CSFB.

Given our recent private placements of common stock and our repayment of our
outstanding debt, we expect interest expense to decline significantly in the
future. We have no current plans to seek any additional debt financing, and we
accordingly anticipate that we will not have any material interest expense in
2005, other than what may be associated with our trade credit.

                                       53
<PAGE>

Additionally, we recorded other charges in 2004 and 2003 as a result of various
transactions. For additional information concerning these charges, please see
"-- Liquidity and Capital Resources." We also recorded other income from Aether
in 2004 of $2.0 million, as compared to $2.2 million in 2003.

Effective May 1, 2002, we were required to reflect our equity share of the
losses of MSV. We recorded equity in losses of MSV of $11.9 million and $9.9
million for the years ended December 31, 2004 and 2003. The MSV losses for the
years ended December 31, 2004 and 2003 are Motient's 46.5% and 38.6% share of
MSV's losses for the same period reduced by the loans in priority. For the years
ended December 31, 2004 and 2003, MSV had revenues of $29.0 million and $27.1
million, operating expenses of $57.7 million and $46.5 million and a net loss of
$33.5 million and $28.0 million, respectively. Our calculations give effect to
the impairment of our investment in MSV in the fourth quarter of 2002 in the
amount of $15.4 million. We are unable to predict our equity share of MSV's gain
or losses in future periods, but we do not anticipate that MSV will be
profitable in the near future. See M-1 for MSV financial statements.

Years Ended December 31, 2003 and 2002

In the year ended December 31, 2003 as compared to the same period of 2002, we
experienced the loss of certain large customers, primarily as a result of those
customers' concern with regard to our financial constraints and the continued
viability of our business in the second half of 2002 and 2003. After our
reorganization, we were required to take numerous actions to reduce our cost
structure and change our operating strategy, which included reductions in the
number of employees and changes in senior management, among other things. These
actions were viewed negatively by certain of our customers and we were unable to
convince them otherwise despite expending considerable effort. During 2003, our
mobile wireless Internet revenue base continued to grow as compared to 2002 as
result of expanding our base of units in our existing corporate accounts in this
segment. Our existing reseller channel partners represented a significant
portion of the revenue growth during this period. The termination of the
manufacture of RIM 850 and 857 devices by Research in Motion, as well as the
increased competition from other wireless carriers offering converged voice and
data devices that utilize newer networks such as 1XRT and GPRS, will hamper our
ability to continue to grow wireless internet revenues in 2004. We are exploring
ways to protect against this anticipated revenue loss, such as our introduction
of the sale of products under our agreements with T-Mobile and Verizon Wireless.

We are also working proactively to lower our cost structure in anticipation of
this revenue loss. We believe that several components of our cost structure are
much larger than required for our relative business size. We have been
successful in dramatically reducing our cost structure in our continued efforts
to improve our profitability.

Subscriber Statistics

Our customer base can be generally divided into five broad categories, Wireless
Internet, Field Services, Transportation, Telemetry and Other. Wireless Internet
primarily consists of customers using our network and applications to access
certain Internet functions, like email. Devices and airtime used by
transportation and shipping companies, or by personnel in the field service
industries (such as repair personnel), for dispatching, routing and other vital
communications functions are known as Transportation and Field Service,
respectively. Telemetry typically covers devices and airtime used to connect
remote equipment, such as wireless point-of-sale terminals, with a central
monitoring facility. Other revenues may consist of sales commissions, consulting
fees or development fees.

The table below summarizes as of December 31, 2003 and 2002 the make up of our
subscriber base. Wireless devices may be divided into three categories:
registered, active and billable. Registered devices represent devices that our
customers have registered for use on our network. Certain numbers of these
devices may be kept in inventory by our customers for future use and generally
are not revenue producing. Customers can move such inventory into a production
status upon which it typically becomes billable and generates revenue. However,
billable units may not pass traffic and thus will not be counted as active. We
count a device as active when it is removed from inventory by the customer and
transmits greater than zero kilobytes of data traffic.

                                       54
<PAGE>

<TABLE>
<CAPTION>
                                             As of December 31,
                                    2003                              2002
                                                                                                    % Change
                        Registered   Billable     Active   Registered   Billable     Active   Registered  Billable    Active
                        ----------   --------     ------   ----------   --------     ------   ----------  --------    ------
<S>                      <C>          <C>        <C>        <C>          <C>        <C>           <C>       <C>        <C>
Wireless Internet         106,600      69,673     51,179     106,082      71,620     56,070        0%        (3)       (9)%
Field Services             17,468      16,415      9,851      30,263      28,955     20,462      (42)       (43)      (52)
Transportation (1)         45,902      39,344     39,513      94,825      83,431     83,815      (52)       (53)      (53)
Telemetry                  32,420      23,947     13,444      30,171      23,733     13,315        7          0         0
All Other                   1,305       1,043        584         653         887        572      100         17         2
                            -----       -----        ---         ---         ---        ---      ---         --         -
  Total                   203,695     150,422    114,571     261,994     208,626    174,234      (22)%      (28)      (34)%
                          =======     =======    =======     =======     =======    =======      ===        ===       ===
</TABLE>

          (1)  UPS migrated their units to another network over the course of
               the second half of 2003. At December 31, 2002, UPS had 70,955
               units registered on Motient's network. At December 31, 2003, UPS
               had 11,829 units registered on Motient's network.

Revenue

The table below sets forth, for the periods indicated, a year-over-year
comparison of the key components of our revenue:


<TABLE>
<CAPTION>
                                                                     Predecessor
                                     Successor Company                 Company
                                     -----------------                 -------
                                                Eight Months         Four Months      Combined Year
                                Year Ended         Ended                 Ended            Ended
                               December 31,     December 31,           April 30,        December 31,
Summary of Revenue                 2003             2002                 2002              2002         Change     % Change
------------------                 ----             ----                 ----              ----         ------      -------
<S>                                <C>              <C>                <C>                 <C>           <C>           <C>
(in millions)
Wireless Internet                  $27.8            $15.5              $ 5.6               $21.1         $6.7          32%
Field Services                       9.9             10.5                5.6                16.1         (6.2)        (39)
Transportation                       7.9              7.4                4.1                11.5         (3.6)        (31)
Telemetry                            2.3              1.8                0.8                 2.6         (0.3)        (12)
All Other                            1.4              0.3                0.7                 1.0          0.4          40
                                     ---              ---                ---                 ---          ---          --
     Service Revenue               $49.3            $35.5              $16.8               $52.3        $(3.0)         (6)
     Equipment Revenue               5.2              1.1                5.6                 6.7         (1.5)        (22)
                                     ---              ---                ---                 ---         ----         ---
         Total                     $54.5            $36.6              $22.4               $59.0        $(4.5)         (8)%
                                   =====            =====              =====               =====        =====          ==
</TABLE>

The decrease in service revenue in 2003 revenue year-over-year was primarily the
result of decreases in field services and transportation revenues, partially
offset by an increase in revenue in the wireless internet segment.


                                       55
<PAGE>


UPS deactivated a significant number of units on our network during the third
and fourth quarters of 2003 and our revenue from UPS declined significantly
during this period. If we cannot generate additional revenue from other sources
to offset this lost revenue, our overall revenues will decline in the future.
Total revenues declined for the reasons given above, and also as a result of a
22% decrease in equipment revenue. By market segment, we note:

     o    Wireless Internet: The revenue growth in the Wireless Internet sector
          during this period represented our focus on expanding the adoption of
          eLink and BlackBerry(TM) wireless email offerings to corporate
          customers with both direct sales people and reseller channel partners.
          Our existing reseller channel partners represented a significant
          portion of the revenue growth during this period. The number of
          wireless internet units registered on our network did not change
          materially from 2002 to 2003. The increase in revenues was a result of
          the activation of existing registered units into service. The
          termination of the manufacture of 850 and 857 devices by Research in
          Motion, as well as the increased competition from other wireless
          carriers offering converged voice and data devices that utilize newer
          networks, will hamper our ability to continue to grow wireless
          internet revenues in 2004.

     o    Field Service: The decrease in field service revenue is primarily the
          result of the termination of several customer contracts, including NCR
          Corporation, Sears, Lanier, and Bank of America, as well as the
          general reduction of units and rates across the remainder of our field
          service customer base, primarily IBM, and certain consulting revenues
          included in 2002 that were not included in 2003. We believe that the
          technology requirements of this market segment are more compatible
          with our network than the wireless Internet market segment, and we are
          making efforts to grow this segment.

     o    Transportation: The decrease in revenue from our transportation
          segment was primarily the result of UPS migrating a majority of its
          units to another network provider over the course of the second half
          of 2003. UPS represented $0.3 million of revenue for the three months
          ended December 31, 2003, as compared to $2.5 million for the three
          months ended December 31, 2002. Another reason for the decrease was
          the elimination, as part of fresh-start accounting, of the recognition
          of deferred revenue that resulted from the sale of intellectual
          property license sold to Aether Systems Inc. in 2000. These decreases
          were partially offset by an increase in units and usage for AMSC and
          Metra. We believe that the technology requirements of this market
          segment are more compatible with our network than the wireless
          Internet market segment, and we are making efforts to grow this
          segment.


                                       56
<PAGE>


     o    Telemetry: Although subscriber units grew by 2,249 or 7%
          year-over-year, this growth was offset by other churn and negative
          rate changes in other telemetry accounts. We believe that the
          technology requirements of this market segment are more compatible
          with our network than the wireless Internet market segment, and we are
          making efforts to grow this segment.

     o    Other Revenue: The increase in other revenue was primarily
          attributable to commissions earned pursuant to the agency and dealer
          agreements with Verizon Wireless and T-Mobile USA. Revenue growth in
          this market segment will depend on our ability to generate new
          customers for these products as well as migrating customers from our
          own network to these newer technologies.

     o    Equipment Revenue: The decrease in equipment revenue was primarily a
          result of our decision to decrease the prices for our equipment to
          customers over the course of the second quarter of 2002 due to lower
          sales of certain of our customer devices and our assessment of market
          conditions, demand and competitive pricing dynamics. These reductions
          in equipment revenue were partially offset by the sales of devices
          attributable to the agency and dealer agreements with Verizon Wireless
          and T-Mobile USA.

For the year ended December 31, 2003, five customers accounted for approximately
47% of our service revenue, with two customers, UPS and SkyTel, each accounting
for more than 11%. As of December 31, 2003, no single customer accounted for
more than 6% of our net accounts receivable. The revenue attributable to such
customers varies with the level of network airtime usage consumed by such
customers, and none of the service contracts with such customers requires that
the customers use any specified quantity of network airtime, nor do such
contracts specify any minimum level of revenue. There can be no assurance that
the revenue generated from these customers will continue in future periods.

Due to the bankruptcy of WorldCom, beginning in the quarter ended June 30, 2002,
we reserved 100% of all amounts then due from Skytel, a wholly-owned subsidiary
of WorldCom. In October 2002, we received payment from SkyTel of a significant
portion of the amount of our pre-petition claim amount. We have received full,
timely payments thereafter and believe that amounts from SkyTel are currently
fully collectible.

Expenses

The table below summarizes, for the periods indicated, a year-over-year
comparison of the key components of our operating expenses.


                                       57
<PAGE>



<TABLE>
<CAPTION>
                                                                       Predecessor
                                            Successor Company            Company
                                            -----------------            -------
                                                      Eight Months     Four Months    Combined Year
                                      Year Ended         Ended            Ended           Ended
                                     December 31,     December 31,       April 30,     December 31,
Summary of Revenue                      2003             2002             2002             2002         Change     % Change
------------------                      ----             ----             ----             ----         ------      -------
<S>                                     <C>              <C>              <C>             <C>           <C>           <C>
(in millions)
Cost of Service and Operations          $51.4            $38.1            $21.9           $ 60.0        $(8.6)        (14)%
Cost of Equipment Sales                   5.9              2.2              6.0              8.2         (2.3)        (28)
Sales and Advertising                     4.6              4.8              4.3              9.1         (4.5)        (49)
General and Administration               11.3              9.7              4.1             13.8         (2.5)        (18)
Restructuring Charges                     --               --               0.6              0.6         (0.6)       (100)
Depreciation and Amortization            21.5             15.5              6.9             22.4         (0.9)         (4)
Loss on Impairment of Asset               5.5              --               --               --           5.5          --
(Gain)loss on disposal of assets          3.0              2.1              0.6              2.7          0.3          0.1
(Gain) on sale of transportation
and satellite assets                      --              (0.3)            (0.4)           (0.7)          0.7         100
                                          --              -----           -----            -----          ---         ---
         Total Operating               $103.2            $72.1            $44.0           $116.1        $12.9         (11)%
                                       ======            =====            =====           ======        =====        =====
</TABLE>

     (1)  Includes compensation expense of $603 thousand related to the market
          value of employee stock options.

     o    Cost of Service and Operations: Our largest single cost center is the
          cost of service and operations, which includes costs to support
          subscribers, such as network telecommunications charges and site rent
          for network facilities, network operations employee salary and related
          costs, network and hardware and software maintenance charges, among
          other things. As a percentage of total revenues, these costs declined
          to approximately 94% for 2003, as compared to 102% in 2002. Given our
          ongoing cost-reduction efforts described above, we expect these costs
          to continue to decrease. The extent of the decrease will depend both
          upon our ability to successfully manage our cost-reduction efforts as
          well as the necessity for these expenditures in the future if our
          customer base declines. The decrease is primarily due to:

          o    decreases in telecommunication charges associated with rate
               reductions in certain telecommunication contracts of an estimated
               $907,000,

          o    decreases in site lease costs due to the removal of
               older-generation base stations from our network of approximately
               $469,000,

          o    reductions in hardware and software maintenance costs as a result
               of the reduction of personnel and the negotiation of lower rates
               on maintenance service contracts of approximately $336,000,

          o    decreases in network maintenance costs as a result of the removal
               of older-generation base stations from our network as well as the
               reduction of rates under our national contract for these services
               of approximately $2,112,000 and


                                       58
<PAGE>


          o    lower employee and related costs due to the workforce reductions
               implemented in July and September 2002 and March 2003 of
               approximately $4.2 million as well as the reversal of certain
               employee bonus accruals from current and prior periods related to
               these workforce reductions of approximately $1.5 million.

These decreases were partially offset by:

          o    an increase in the average lease rate for our site leases of
               approximately $130,000,

          o    increases in licensing and commission payments to third parties
               with whom we have partnered to provide certain eLink and
               BlackBerry(TM) by Motient services, as a result of the revenue
               increase over the year in our mobile internet segment of
               approximately $130,000,

          o    compensation expenses associated with stock options issued to
               employees of $211 thousand for the 12 months ended December 31,
               2003, and

          o    certain expenditures for the removal of older-generation base
               stations from our network of approximately $316,000.

     o    Cost of Equipment and Sales: Cost of equipment sales expenses as a
          percentage of total revenue were approximately 11% for 2003 as
          compared to 14% for 2002. The decrease in the cost of equipment sold
          expenses was primarily the result of reduced terrestrial hardware
          sales prices during 2002, resulting from a variety of factors,
          including certain price reductions on Research in Motion devices,
          partially offset by the increased cost of sales of devices
          attributable to our agreements with Verizon Wireless and T-Mobile USA.
          These newer devices used on the Verizon and T-Mobile networks have
          increased functionality and, correspondingly, increased cost, over
          previous generation devices. The Company also wrote down the value of
          its inventory in the second quarter of 2002 by $4.5 million. To the
          extent we are unable to add new customers at previous rates, these
          costs will likely decline in the future.

     o    Sales and Advertising: Sales and advertising expenses as a percentage
          of total revenue were approximately 8% for 2003, compared to 15% for
          2002. The decrease in sales and advertising expenses from 2002 was
          primarily attributable to lower employee salary and related costs due
          to the workforce reductions implemented in July and September 2002 and
          March 2003 as well as significant reductions in or elimination of
          public relations costs ($324,000, or 96%, year-to-year) and sales and
          marketing programs ($265,000, or 65%, year-to year) as a result of our
          reorganization in May 2002 and the reversal of certain employee bonus
          accruals from current and prior periods related to these workforce
          reductions. These decreases were partially offset by compensation
          expenses associated with stock options issued to employees of $151
          thousand for the 12 months ended December 31, 2003. There was no

                                       59
<PAGE>

          compensation expense associated with employee stock options for the 12
          months ended December 31, 2002. We anticipate that these costs will
          continue to decline in the future in conjunction with our overall
          cost-cutting efforts.

     o    General and Administrative: General and administrative expenses for
          the core wireless business as a percentage of total revenue were
          approximately 21% for 2003 as compared to 23% for 2002. The decrease
          in 2003 costs over 2002 costs in the general and administrative
          expenses was primarily attributable to lower employee salary and
          related costs due to the workforce reductions implemented in July and
          September 2002 and March of 2003 as well as the reversal of certain
          employee bonus accruals from current and prior periods related to
          these workforce reductions. In addition, this decrease was
          attributable to lower rent expense from the closure of our Reston
          facility in July 2003 of approximately $588,000, lower directors and
          officers liability insurance costs subsequent to our reorganization,
          of approximately $564,000, and a reduction in bad debt charges
          primarily due to the lowering of our reserves after our reorganization
          of approximately $584,000. These decreases were partially offset by
          compensation expenses associated with stock options issued to
          employees of $241 thousand for the 12 months ended December 31, 2003.
          There was no compensation expense associated with employee stock
          options for the 12 months ended December 31, 2002. Increases in the
          consulting costs related to the engagement and the related
          compensation costs of CTA and Further Lane in May 2002 and July 2003,
          respectively, and increases in audit, tax and legal fees related to
          our fiscal year 2002 audit and re-audits of fiscal year 2001 and 2000,
          occurring principally during the last nine months of 2003. Certain
          events in 2002 also contributed to this decrease in general and
          administrative expenses from 2002 to 2003, including the compensation
          expense associated with the issuance of warrants to CTA in December
          2002 and fees incurred as a result of Motient's withdrawal from
          certain FCC frequency auctions in the second quarter of 2002. We
          anticipate that these costs will continue to decline in the future in
          conjunction with our overall cost-cutting efforts.

     o    Restructuring Costs: There were no restructuring costs in 2003.
          Operational restructuring costs in 2002 due to certain employee
          reduction initiatives and reorganization expenses.

     o    Depreciation and Amortization: Depreciation and amortization for the
          core wireless business was approximately 40% of total revenue for
          2003, as compared to 38% for 2002. The decrease in depreciation and
          amortization expense in 2003 was partially attributable to the
          impairment of the value of our customer contract intangibles as of
          September 2003.

     o    Loss on Impairment of Asset: In May 2004, we engaged a financial
          advisory firm to prepare a valuation of customer intangibles as of
          September 2003. Due to the loss of UPS as a core customer in 2003 as
          well as the migration and customer churn occurring in our mobile
          internet base that is impacting the average life of a customer in this
          base, among other things, we determined an impairment of the value of
          these customer contracts was probable. As a result of this valuation,
          the value of customer intangibles was determined to be impaired as of
          September 2003 and was reduced by $5.5 million.

                                       60
<PAGE>


     o    Interest Expense: Interest expense from May 1, 2002, is associated
          with our various debt obligations, including the $19.75 million notes
          payable to Rare Medium and CSFB, our capital lease obligations, our
          vendor financing commitment and our term credit facility put in place
          in January of 2003. We incurred $6.4 million of interest expense in
          2003, compared to $3.8 million during 2002. The $2.6 million increase
          was due primarily to the amortization of fees and the value ascribed
          to warrants provided to the term credit facility lenders on our
          closing of our term credit facility in January of 2003. We issued
          warrants at closing to the lenders to purchase, in the aggregate,
          3,125,000 shares of our common stock. The exercise price for these
          warrants is $1.06 per share. The warrants were valued at $10 million
          using a Black-Scholes pricing model and have been recorded as a debt
          discount and are being amortized as additional interest expense over
          three years, the term of the related debt. Upon the closing of the
          credit agreement, we paid closing and commitment fees to the lenders
          of $500,000, which are also being amortized over three years. Given
          our recent private placements of common stock and our repayment of the
          term credit facility, we expect interest expense to decline in the
          future as we will have less debt financing in place.

     o    Other Expenses and Income: On July 29, 2003, our wholly-owned
          subsidiary, Motient Communications, entered into an asset purchase
          agreement with Nextel, under which Motient Communications sold to
          Nextel certain of its SMR licenses issued by the FCC for $3.4 million.
          The closing of this transaction occurred on November 7, 2003. On
          December 9, 2003, Motient Communications entered into a second asset
          purchase agreement, under which Motient Communications will sell
          additional licenses to Nextel for $2.75 million resulting in a $1.5
          million loss which was recorded in December, 2003. In February, 2004,
          we closed the sale of licenses covering approximately $2.2 million of
          the purchase price, and we closed the sale of approximately one-half
          of the remaining licenses in April 2004. The transfer of the other
          half of the remaining licenses has been challenged at the FCC by a
          third-party. While we believe, based on the advice of counsel, that
          the FCC will ultimately rule in our favor, we cannot assure you that
          we will prevail, and, in any event, the timing of any final resolution
          is uncertain. None of these licenses are necessary for our future
          network requirements. We have and expect to continue to use the
          proceeds of the sales to fund its working capital requirements and for
          general corporate purposes. The lenders under our term credit
          agreement have consented to the sale of these licenses.

Effective May 1, 2002, we were required to reflect our equity share of the
losses of MSV. We recorded equity in losses of MSV of $9.9 million and $8.8
million for the years ended December 31, 2003 and 2002. The MSV losses for the
years ended December 31, 2003 and 2002 are Motient's 46.5% and 48% share of
MSV's losses for the same period reduced by the loans in priority. For the years
ended December 31, 2003 and 2002, MSV had revenues of $27.1 million and $24.9
million, operating expenses of $46.5 million and $45.7 million and a net loss of

                                       61
<PAGE>

$28.0 million and $26.2 million, respectively. Our calculations give effect to
the impairment of our investment in MSV in the fourth quarter of 2002 in the
amount of $15.4 million. We are unable to predict our equity share of MSV's gain
or losses in future periods, but we do not anticipate that MSV will be
profitable in the near future.

We recorded other income from Aether in 2003 of $2.2 million, as compared to
$2.1 million in 2002.

Additionally, we recorded a number of other charges in 2003 and 2002 as a result
of various transactions. For additional information concerning these charges,
please see "-- Liquidity and Capital Resources."

In 2003:

     o    Loss on impairment of asset of $5.5 million, discussed above

     o    We recorded a loss on the sale of certain assets of $3.0 million,
          consisting of $1.5 million on the sale of frequencies to Nextel
          (discussed above) and approximately $1.5 million relating to the
          write-off of consulting costs and equipment purchased for our project
          to convert our telecommunications circuits from an analog to a digital
          base. This project was discontinued in favor of our TCPIP/Frame Relay
          conversion project.

In 2002:

     o    As a result of our debt restructuring efforts, we recorded costs of
          $23.1 million.

     o    We recorded a gain on the sale of our transportation and satellite
          assets of $0.8 million.

     o    We recorded a loss on the sale of certain assets of $1.2 million.

     o    Related to our reorganization in May of 2002, we recorded a gain on
          fair market adjustment of $94.7 million and a gain on the
          restructuring of debt of $183.7 million.

     o    Net capital expenditures for the year ended December 31, 2003 for
          property and equipment were $0.2 million, as compared to $1.1 million
          for 2002. Expenditures consisted primarily of assets related to our
          terrestrial network.


2002 Stock Option Plan

Options to purchase 605,727 shares of our common stock were outstanding as of
December 31, 2004 under our 2002 stock option plan.

                                       62
<PAGE>

Of these, 139,897 options are accounted for in accordance with variable plan
accounting, which requires that the value of these options are measured at their
intrinsic value and any change in that value be charged to the income statement
each quarter based on the difference (if any) between the intrinsic value and
the then-current market value of the common stock. Therefore, for every $10
increase in our stock price, we would incur $10 of non-cash expense for every
variable option outstanding at the end of the period.

Material Off-Balance Sheet Transactions

As of December 31, 2004, 2003 and 2002, we did not have any material off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) under Regulation S-K.

Liquidity and Capital Resources

As of December 31, 2004, we had approximately $16.9 million of cash and cash
equivalents on hand, compared to $3.6 million at December 31, 2003. The increase
of $13.3 million is mainly attributable to an increase in cash provided by
financing activities, offset by decreases in net cash used in operating and
investing activities, as described below. As of February 28, 2005, we had
approximately $12 million of cash on hand and short-term investments.

Summary of Cash Flow for the years ended December 31, 2004 and December 31, 2003

<TABLE>
<CAPTION>
                                                                   Year Ended          Year Ended
                                                                  December 31,         December 31,
                                                                     2004                 2003
                                                                     ----                 ----
<S>                                                                <C>                <C>
Cash (Used In) Provided by Operating Activities                     $ (18,354)         $(7,120)
                                                                    ---------          -------
Cash (Used In) Provided by Investing Activities                     $(120,662)           4,893
                                                                    ---------          -------

Cash (Used In) Provided by Financing Activities:
       Debt payments on capital leases and vendor financing            (5,250)          (4,006)
       Net proceeds from debt issuances                                 1,500            4,500
       Repayments of debt                                              (6,899)              --
       Repayments of notes                                            (23,990)              --
       Equity issuances                                               192,024               --
       Equity issuance costs                                           (6,974)              --
       Proceeds from issuance of employee stock options                 2,032             (489)
       Debt issuance costs and other charges                             (100)              --
                                                                    ---------          -------
Cash (Used) Provided in Financing Activities:                         152,343                5
                                                                    ---------          -------
Total Change in Cash                                                   13,327           (2,222)
                                                                    =========          =======
Cash and Cash Equivalents, end of period                            $  16,945          $ 3,618
                                                                    =========          =======
</TABLE>

Operating Activities: Net cash used in operating activities during the year
ended December 31, 2004 was approximately $18.3 million as compared to $7.1
million for the year ended December 31, 2003. While we are attempting to reduce
cash used in operating activities as a result of our cost cutting efforts and
through our attempts to increase our revenues by focusing on more
network-appropriate market segments, it is possible revenue declines will not be
sufficient to offset or overtake the cash saved by our cost cutting efforts in
the future.

Our $18.4 million cash used in operating activities was attributed mainly to our
net loss of $72.0 million, which included non-cash depreciation of $15.6
million, equity in losses of MSV of $11.9 million, asset disposal and impairment
charges of $5.8 million, amortization and write-off of deferred financing fees
of $14.5 million, 401K and stock compensation charges of $10.3 million and gain
on debt restructuring of $0.8 million.

                                       63
<PAGE>

Changes in assets and liabilities resulted in an increase to operating cash flow
of approximately $3.8 million, consisting of a $5.6 million increase to cash
used for accounts payable and accrued expenses. This increase is a result of
faster payments to vendors and reduced accruals due to lower operating expenses
and an increase in available funds. Our $6.2 million increase in deferred
revenue and other deferred items was due to amortization of these costs and
relatively small additions to deferred revenue and other deferred items. A $0.1
million decrease in cash used for inventory is a result of the termination of
our T-Mobile and Verizon contracts, the end of life for RIM 857 devices and the
decline in demand for devices used on our DataTac network. A $1.9 million
decrease in cash received from accounts receivable is the result of our decline
in sales. The $4.5 million decrease in other current assets is primarily
attributable to a decrease in prepaid site rent and the $1.5 million decrease in
accrued interest is a result of the repayment of our notes and term credit
facility.

Investing Activities: Net cash used in investing activities for the year ended
December 31, 2004 was $120.7 million as compared to $4.9 million provided by
investing activities for the year ended December 31, 2003.

Our $120.7 million cash used in investing activities consists of our $125.0
million investment in MSV in November 2004, offset by $2.1 million which reduced
our notes receivable from MSV. Cash flows from investing activities also
increase due to the conversion of our $ 1.1 million letter of credit that
secured our capital lease with Hewlett-Packard to unrestricted cash, as part of
our negotiated settlement of these obligations with Hewlett-Packard in June 2004
and increased $0.4 million due to the conversion of other unrestricted cash.
Cash used in investing activities decreased by our investments in property and
equipment of $1.4 million reflecting our investment in new telecommunications
infrastructure costs, this investment was offset by proceeds from the sale of
certain frequency assets of $2.1 million.

Financing Activities: Net cash provided by financing activities was $152.3
million for the year ended December 31, 2004 as compared to $4.9 million for the
year ended December 31, 2003. The $151.7 million increase in cash provided by
financing activities was the result of the proceeds from the exercise of certain
employee stock options and certain other warrants and our private placements of
common stock completed in April, July and November 2004. These proceeds were
partially utilized in our negotiated settlement of our vendor debt and capital
lease obligations in the second quarter of 2004, the repayment of all amounts
outstanding under our term credit facility in April 2004, the repayment of all
amounts outstanding under our debt obligations to Rare Medium and CSFB and our
investment in MSV in November 2004.

Specifically, our $152.3 million increase in cash provided by financing
activities consist of $192.0 million in proceeds from the issuance of stock,
$2.0 million in proceeds from the issuance of employee stock options and $1.5
million in proceeds from borrowings under our term credit facility. These
increases were offset by $24.0 million in repayment of notes, $6.9 million in
repayment of our term credit facility, payment of $0.1 million in deferred
financing fees related to the term credit facility, $5.2 million in repayments
of vendor and capital lease obligations and $7.0 million for payment of stock
issuance costs and related charges.

We believe that our available funds, together proceeds from planned rights
offering and the exercise of warrants and options, will be adequate to satisfy
our current and planned operations for at least the next twelve months.

Debt and Capital Lease Obligations

As of December 31, 2004, Motient has no outstanding debt or capital lease
obligations.

Credit Facility Repayment: On April 13, 2004, Motient repaid the all principal
amounts then owing under its term credit facility, including accrued interest
thereon, in an amount of $6.8 million. The facility terminated on December 31,
2004, and the Company does not plan to attempt to extend the borrowing
availability again. The retirement and subsequent termination of the credit
facility on December 31, 2004 required the amortization of all remaining
interest expense associated with this facility

United Parcel Service Prepayment: In December 2002, we entered into an agreement
with UPS pursuant to which UPS prepaid to us an aggregate of $5 million for
network airtime service to be provided beginning January 1, 2004. The $5 million
prepayment was credited against airtime services provided to UPS beginning
January 1, 2004. Based on UPS' current level of network airtime usage, we do not
expect that UPS will be required to make any cash payments to us in 2005 and
2006 for service provided during 2005 and 2006. UPS may terminate the contract
on 30 days' notice. If UPS terminates the contract, we will be required to

                                       64
<PAGE>

refund any unused portion of the prepayment to UPS. While we expect that UPS
will remain a customer for the foreseeable future, there are no minimum purchase
requirements under the contract and the bulk of UPS' units have migrated to
another network, leaving 4,721 active units on our network as of December 31,
2004. The value of our remaining airtime service obligations to UPS at December
31, 2004 in respect of the prepayment was approximately $4.0 million.

Rare Medium Note: On July 15, 2004, the Company paid all principal and interest
due and owing on this $19.0 million principal amount note, in the amount of
$22.6 million.

CSFB Note: On July 15, 2004, the Company paid all principal and interest due and
owing on this $750,000 principal amount note, in the amount of $0.9 million.

Termination of Motorola and Hewlett-Packard Agreements: In June 2004, the
Company negotiated settlements of the entire amounts outstanding under its
financing facility with Motorola and its capital lease with Hewlett-Packard. The
full amounts due and owing under these agreements was $6.8 million. The Company
paid an aggregate of $3.9 million in cash to Motorola and Hewlett-Packard and
issued a warrant to Motorola to purchase 200,000 shares of the Company's common
stock at a price of $8.68, in full satisfaction of the outstanding balances. The
Company recorded a gain on the extinguishment of debt in the amount of $0.7
million on the Hewlett Packard settlement. The Company recorded a gain of $0.1
million on the Motorola settlement.

Restructuring Costs

In June 2004, the Company recorded a restructuring charge of $5.1 million
related to certain network rationalization initiatives, consisting of base
station deconstruct costs of $0.5 million, the loss on the retirement of certain
base station equipment of $2.8 million and termination liabilities of $1.8
million for site leases no longer required for removed base stations. Of these
amounts, as of December 31, 2004, the Company had incurred base station
deconstruction costs of $0.5 million, the loss on the retirement of certain base
station equipment of $2.8 million and termination liabilities of $0.9 million
for site leases no longer required for removed base stations.

The following table displays the activity and balances of the restructuring
reserve account from January 1, 2004 to December 31, 2004:

<TABLE>
<CAPTION>
                                              Base Station
                                 Employee         Asset       Base Station    FCC License     Site Lease
                               Terminations    Write-Offs    Deconstruction  Terminations    Terminations      Total
                               ------------    ----------    --------------  ------------    ------------      -----
<S>                               <C>                                                                         <C>
Balance January 1, 2004             $---           $---            $---           $---            $---          $---
---------------------------------------------------------------------------------------------------------------------
Restructure Charge                (1,107)           ---             ---            ---             ---        (1,107)
Deductions - Cash                    333            ---             ---            ---             ---           333
Deductions - Non-Cash                ---            ---             ---            ---             ---           ---
---------------------------------------------------------------------------------------------------------------------
Balance March 31, 2004              (774)           ---             ---            ---             ---          (774)
---------------------------------------------------------------------------------------------------------------------
Restructure Charge                   ---         (2,801)           (398)          (113)         (1,854)       (5,166)
Deductions - Cash                    242            ---              75             25              61           403
Deductions - Non-Cash                ---          2,801             ---            ---             ---         2,801
---------------------------------------------------------------------------------------------------------------------
Balance June 30, 2004               (532)           ---            (323)           (88)         (1,793)       (2,736)
---------------------------------------------------------------------------------------------------------------------
Deductions - Cash                    132            ---             252             39             416           839
Deductions - Non-Cash                ---            ---             ---            ---             ---           ---
---------------------------------------------------------------------------------------------------------------------
Balance September 30, 2004          (400)           ---             (71)          $(49)        $(1,377)      $(1,897)
---------------------------------------------------------------------------------------------------------------------
Deductions - Cash                     50            ---              71             54             435           610
---------------------------------------------------------------------------------------------------------------------
Deductions - Non-Cash                ---            ---             ---            ---             ---           ---
---------------------------------------------------------------------------------------------------------------------
Balance December 31, 2004          $(350)          $---            $---             $5           $(942)      $(1,287)
---------------------------------------------------------------------------------------------------------------------
</TABLE>
                                       65
<PAGE>


Commitments

There are no remaining payments related to our debt and capital lease
obligations since they were all retired.

As of December 31, 2004, we had the following outstanding cash contractual
operating commitments:

<TABLE>
<CAPTION>
                                             Total       <1 year      1-3 years      3 - 5 years     More than 5 years
                                             -----       -------      ---------      -----------     -----------------
<S>                                          <C>          <C>          <C>              <C>            <C>
(in thousands)
Operating leases (1)                         $15,212      $5,173       $5,358           $3,424         $1,257
                                             -------      ------       ------           ------         ------
  Total Contractual Cash Obligations         $15,212      $5,173       $5,358           $3,424         $1,257
</TABLE>

(1) These commitments generally contain provisions that provide for an
acceleration of rent upon a default by us, except that certain long-term real
estate leases, categorized as Operating Leases, may not contain such provisions.

In addition, we have certain liabilities, further described above, related to
the $5 million prepayment made to us by UPS in 2002.

Other

On May 1, 2002, the effective date of our Plan of Reorganization, the financing
agreements that included restrictions on our ability to pay dividends were
terminated as part of the implementation of our Plan of Reorganization; however,
various financing documents prohibit us from paying cash dividends. We have
never paid dividends and do not expect to do so in the near future.

Critical Accounting Policies and Significant Estimates

Below are our accounting policies that are both important to our financial
condition and operating results, and require management's most difficult,
subjective and complex judgments in determining the underlying estimates and
assumptions. The estimates and assumptions affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates as they require assumptions that are inherently uncertain.



                                       66
<PAGE>


"Fresh-Start" Accounting

In accordance with SOP No. 90-7, effective May 1, 2002, we adopted "fresh-start"
accounting and allocated the reorganization value of $221.0 million to our net
assets in accordance with procedures specified by SFAS No. 141, "Business
Combinations".

We allocated the $221.0 million reorganization value among our net assets based
upon our estimates of the fair value of our assets and liabilities. In the case
of current assets, we concluded that their carrying values approximated fair
values. The values of our frequencies and its investment in and notes receivable
from MSV were based on independent analyses presented to the bankruptcy court
and subsequently modified as part of our valuation process in November 2003.
Please see Note 2, "Significant Accounting Policies - Restatement of Financial
Statements," and Note 16, "Subsequent Events," of notes to the consolidated
financial statements for further information concerning MSV. The value of our
fixed assets was based upon a valuation of our software and estimates of
replacement cost for network and other equipment, for which we believe that our
recent purchases represent a valid data point. The value of our other intangible
assets was based on third party valuations as of May 1, 2002.

For a complete description of the application of "fresh-start" accounting,
please refer to Note 2, "Significant Accounting Policies", of notes to the
consolidated financial statements.

Deferred Taxes

We have generated significant net operating losses for tax purposes as of
December 31, 2003. We have had our ability to utilize these losses limited on
two occasions as a result of transactions that caused a change of control in
accordance with the Internal Revenue Service Code Section 382. Additionally,
since we have not yet generated taxable income, we believe that our ability to
use any remaining net operating losses has been greatly reduced; therefore, we
have provided a full valuation allowance for any benefit that would have been
available as a result of our net operating losses. See Note 2, "Significant
Accounting Policies - Deferred Taxes," of notes to the consolidated financial
statements for further details.

Revenue Recognition

We generate revenue principally through equipment sales and airtime service
agreements. In 2000, we adopted SAB No. 101, which provides guidance on the
recognition, presentation and disclosure of revenue in financial statements. In
certain circumstances, SAB No. 101 requires us to defer the recognition of
revenue and costs related to equipment sold as part of a service agreement.

In December 2003, the Staff of the SEC issued SAB No. 104, "Revenue
Recognition", which supersedes SAB No. 101, "Revenue Recognition in Financial
Statements." SAB No. 104's primary purpose is to rescind accounting guidance
contained in SAB No. 101 related to multiple-element revenue arrangements and to
rescind the SEC's "Revenue Recognition in Financial Statements Frequently Asked
Questions and Answers", or FAQ, issued with SAB No. 101. Selected portions of
the FAQ have been incorporated into SAB No. 104. The adoption of SAB No. 104
will not have a material impact on our revenue recognition policies.

                                       67
<PAGE>

Revenue is recognized as follows:

Service revenue: Revenues from the Company's wireless services are recognized
when the services are performed, evidence of an arrangement exists, the fee is
fixed and determinable and collectibility is probable. Service discounts and
incentives are recorded as a reduction of revenue when granted, or ratably over
a contract period. The Company defers any revenue and costs associated with
activation of a subscriber on the Company's network over an estimated customer
life of two years.

We package airtime usage on our network that involves a wide variety of volume
packaging, for example, anything from a 35 kilobytes per month plan up to
unlimited kilobyte usage per month, with various gradations in between.
Discounts may be applied when comparing one customer to another, and such
service discounts are recorded as a reduction of revenue when granted. The
Company does not offer incentives generally as part of its service offerings,
however, if offered they would be recorded as a reduction of revenue ratably
over a contract period.

Service discounts and incentives are recorded as a reduction of revenue when
granted, or ratably over a contract period. The Company defers any revenue and
costs associated with activation of a subscriber on the Company's network over
an estimated customer life of two years.

To date, the majority of our business has been transacted with
telecommunications, field services, natural resources, professional service and
transportation companies located throughout the United States. We grant credit
based on an evaluation of the customer's financial condition, generally without
requiring collateral or deposits. We establish a valuation allowance for
doubtful accounts receivable for bad debt and other credit adjustments.
Valuation allowances for revenue credits are established through a charge to
revenue, while valuation allowances for bad debts are established through a
charge to general and administrative expenses. We assess the adequacy of these
reserves quarterly, evaluating factors such as the length of time individual
receivables are past due, historical collection experience, the economic
environment and changes in credit worthiness of our customers. As of December
31, 2004 and December 31, 2003, we had a valuation allowance of approximately
11.8% and 16.6% of our accounts receivable, respectively. We believe that our
established valuation allowance was adequate as of December 31, 2004 and 2003.
If circumstances related to specific customers change or economic conditions
worsen such that our past collection experience and assessments of the economic
environment are no longer relevant, our estimate of the recoverability of our
trade receivables could be further reduced.

Equipment and service sales: We sell equipment to resellers who market our
terrestrial product and airtime service to the public. We also sell our product
directly to end-users. Revenue from the sale of the equipment as well as the
cost of the equipment, are initially deferred and are recognized over a period
corresponding to our estimate of customer life of two years. Equipment costs are
deferred only to the extent of deferred revenue.

Long-lived Assets

On January 1, 2002, we adopted the provisions of SFAS No. 141, "Business
Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No.
141 requires business combinations initiated after June 30, 2001 to be accounted
for using the purchase method of accounting, and broadens the criteria for
recording intangible assets separate from goodwill. Recorded goodwill and


                                       68
<PAGE>

intangibles will be evaluated against these new criteria and may result in
certain intangibles being subsumed into goodwill, or alternatively, amounts
initially recorded as goodwill may be separately identified and recognized apart
from goodwill. SFAS No. 142 requires the use of a non-amortization approach to
account for purchased goodwill and certain intangibles. Under a non-amortization
approach, goodwill and certain intangibles will not be amortized into results of
operations, but instead will be reviewed for impairment and written down and
charged to results of operations only in the periods in which the recorded value
of goodwill and certain intangibles is more than its fair value. As of January
1, 2002, we had approximately $5.0 million of recorded goodwill. However, as
part of our adoption of "fresh-start" accounting, our recorded goodwill was
reduced to zero.

We account for our frequencies as finite-lived intangibles and amortize them
over a 15-year estimated life. As described in Note 6 of notes to consolidated
financial statements, we are monitoring a pending FCC rulemaking proposal that
may affect our 800 MHz spectrum, and we may change our accounting policy for FCC
frequencies in the future as new information is available.

On January 1, 2002, we also adopted SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets", which supercedes SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
Of". The statement requires that all long-lived assets be measured at the lower
of carrying amount or fair value less cost to sell, whether reported in
continuing operations or in discontinued operations. Therefore, discontinued
operations will no longer be measured on a net realizable value basis and will
not include amounts for future operating losses. The statement also broadens the
reporting requirements for discontinued operations to include disposal
transactions of all components of an entity (rather than segments of a
business). Components of an entity include operations and cash flows that can be
clearly distinguished from the rest of the entity that will be eliminated from
the ongoing operations of the entity in a disposal transaction. In 2004, we
engaged a financial advisor to evaluate the value of our customer-related
intangibles as of September 30, 2003 due primarily to the decline in revenue
from UPS in this time period. This valuation resulted in an impairment of the
customer-related intangibles of $5.5 million in the third quarter of 2003. In
addition, in December 2004, we performed an additional analysis on the impact of
our revenue decline on our customer intangibles. As a result, we determined that
the value of our customer intangibles was further impaired and was reduced by
$0.8 million. The adoption of SFAS No. 144 had no other material impact on our
financial statements.

Recent Accounting Standards

EITF 04-8

In October 2004, the FASB ratified EITF 04-8, "Accounting Issues Related to
Certain Features of Contingently Convertible Debt and the Effect on Diluted
Earnings Per Share." The new rules require companies to include shares issuable
upon conversion of contingently convertible debt in their diluted earnings per
share (EPS) calculations regardless of whether the debt has a market price
trigger that is above the current fair market value of the company's common
stock that makes the debt currently not convertible. The new rules are effective
for reporting periods ending on or after December 15, 2004.

Motient currently has no contingently convertible debt and does not expect to
enter into any transactions in which EITF 04-8 will apply.

                                       69
<PAGE>

SFAS No. 151

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs: an amendment
of ARB No. 43, Chapter 4," to clarify the accounting for abnormal amounts of
idle facility expense, freight, handling costs and wasted material. SFAS No. 151
is effective for inventory costs incurred during fiscal years beginning after
June 15, 2005. We do not believe the provisions of SFAS No. 151, when applied,
will have an impact on our financial position or results of operations.

SFAS No. 123R

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment: an
amendment of FASB Statements No. 123 and 95," which requires companies to
recognize in their income statement the grant-date fair value of stock options
and other equity-based compensation issued to employees. SFAS No. 123R is
effective for interim or annual periods beginning after June 15, 2005.
Accordingly, we will adopt SFAS No. 123R in our fourth quarter of fiscal 2005.
Unamortized stock-based compensation expense, on a pro forma basis, as of
December 31, 2004 totaled $243,000, with the entire amount to be amortized in
fiscal 2005.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.
---------------------------------------------------------------------

As of December 31, 2004 and March 1, 2005, we are not exposed to the impact of
interest rate changes. We do not use derivative financial instruments to manage
our interest rate risk. We invest our cash in short-term commercial paper,
investment-grade corporate and government obligations and money market funds.

As of December 31, 2004 and March 1, 2005, Motient has no remaining debt
obligations.

Item 8.  Financial Statements and Supplementary Data.
-----------------------------------------------------

The financial statements and supplementary data required by this item are
included in Part IV, Item 15 of this Form 10-K and are presented beginning on
page F-1 with respect to Motient and beginning on page M-1 with respect to MSV.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------

None.

Item 9A.  Controls and Procedures.
----------------------------------

We have performed an evaluation under the supervision and with the participation
of our management, including our principal executive officer and principal
financial officer, of the effectiveness of our disclosure controls and
procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934 (the "Exchange Act"). Based on that evaluation, our management, including
our principal executive officer and principal financial officer, concluded that
our disclosure controls and procedures were effective as of December 31, 2004.


                                       70
<PAGE>

Internal Control Over Financial Reporting

Pursuant to Item 308(a) of Regulation S-K and subsequent SEC Releases and
guidance, we will be required to furnish an annual management report on our
internal control of our financial reporting by April 30, 2005. In order to issue
our report, which will be included pursuant to an amendment to this Form 10-K,
our management must document both the design of our internal controls and the
testing processes that support management's evaluation and conclusion. Our
management has begun the necessary processes and procedures for issuing its
report on internal controls.

The attestation report of our independent registered public accounting firm,
Friedman LLP, required by Item 308(b) of Regulation S-K is not contained in this
Annual Report on Form 10-K. This attestation report will be included pursuant to
an amendment to this Form 10-K.

Although we have not been able to include this report herein, we have been able
to outline certain items that will effect the contents of that report, discussed
below.

Management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in the Securities Exchange Act of
1934 Rule 13a - 15(f), and for performing an assessment of the effectiveness of
internal control over financial reporting as of December 31, 2004. Internal
control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. Our system of internal control over financial
reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
transactions and dispositions of assets; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures are being made only in accordance with authorizations
of management and directors; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of our assets that could have a material effect on the financial statements.

                                       71
<PAGE>

Management performed an assessment of the effectiveness of our internal control
over financial reporting as of December 31, 2004 based upon criteria in Internal
Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, or COSO. Based on our assessment,
management determined that our internal control over financial reporting have
certain "significant deficiencies" as defined under the standards established by
the Public Company Accounting Oversight Board that do not, individually or in
aggregate, rise to the level of a "material weakness". These significant
deficiencies involve matters relating to the design or operation of internal
control that, in the judgment of management, could adversely affect the
organization's ability to record, process, summarize and report financial data
consistent with the assertions of management in the financial statements. These
significant deficiencies relate to:

     o    an insufficient segregation of duties involved in the initiation of
          wire transfers;
     o    our reliance on certain insufficiently controlled spreadsheets used
          for certain aspects of our financial reporting; and
     o    the lack of sufficient oversight and review of the processes involved
          in the preparation of certain aspects of our financial reporting, in
          particular as it relates to several complex and sophisticated
          transactions. As part of our 2004 audit, our auditors suggested
          certain adjustments (which we agree with) to our accounting as a
          result of certain transactions. While these adjustments were not
          material, we deemed the necessity for these adjustments as potential
          evidence of a lack of appropriate resources in our finance department.

Management has concluded that adequate compensatory controls, including
executive oversight, were in place as of December 31, 2004 and therefore does
not believe that these significant deficiencies had a material effect on the
results of our financial reporting, either singularly or in aggregate, nor does
management believe that any of these significant deficiencies, singularly or in
aggregate, rise to the level of a "material weakness."

In order to address these issues, management has taken the following steps to
eliminate these conditions in 2005:

     o    we have changed our wire transfer rights and procedures to insure all
          wires are properly initiated and approved according to Company policy;
     o    we have started to, and will continue to, install passwords, "locked"
          cells, and other proper controls within spreadsheets used for
          financial reporting, and will attempt to eliminate their use wherever
          possible by the end of the second quarter 2005; and,
     o    we have retained consultants with accounting expertise to assist our
          internal staff in the recording of certain complex accounting matters.
          We also plan to add additional internal resources in the next 60 to 90
          days to ensure adequate oversight and review of future transactions.

We have discussed our corrective actions and future plans with our Audit
Committee and Freidman LLP and, as of the date of this Annual Report on Form
10-K, we believe the actions outlined above should correct the deficiencies in
internal controls outlined above.

There has been no change in our internal control over financial reporting that
occurred during our last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting. The changes outlined above began in 2005.

Item 9B.  Other Information
---------------------------

None.

                                       72
<PAGE>


                                    PART III


Item 10.  Directors and Executive Officers of Motient.
------------------------------------------------------

The following table sets forth certain information about our executive officers,
directors and key employees.

<TABLE>
<CAPTION>
Name                         Title                                        Age      Began Service
----                         -----                                        ---      -------------
<S>                          <C>                                         <C>      <C>
Christopher W. Downie        Executive Vice President,                    35       2003
                             Chief Operating Officer and Treasurer
Dennis W. Matheson           Senior Vice President and Chief              44       1993
                             Technology Officer
Deborah L. Peterson          Vice President, Systems Engineering          49       1992
                             and Solutions
Richard V. Crawford          Vice President, Network Engineering          48       1991
Robert L. Macklin            General Counsel and Secretary                30       2003
Myrna J. Newman              Controller and Chief Accounting Officer      48       2003
Steven G. Singer             Director, Chairman                           43       2002
Gerald S. Kittner            Director                                     52       2002
Barry A. Williamson          Director                                     47       2005
Jonelle St. John             Director                                     50       2000
James D. Dondero             Director                                     42       2002
Raymond L. Steele            Director                                     69       2004
</TABLE>


Christopher W. Downie. Mr. Downie was appointed executive vice president, chief
operating officer and treasurer in May 2004. From March 2004 to May 2004, Mr.
Downie was appointed to the position of executive vice president, chief
financial officer and treasurer, and designated our principal executive officer.
From April 2003 to March 2004, he served as vice president, chief financial
officer and treasurer. From May 2002 to April 2003, Mr. Downie worked as a
consultant for CTA, a communications consulting firm. While with CTA, Mr. Downie
was primarily engaged on Motient-related and other telecom-related matters. From
February 2000 to May 2002, Mr. Downie served as a senior vice president and
chief financial officer of BroadStreet Communications, Inc. From August 1993 to
February 2000, Mr. Downie was a vice president in the Investment Banking
Division of Daniels & Associates, LP, an investment bank focused on
communications. From 1991 to 1993, Mr. Downie served as a financial analyst at
Bear, Stearns & Co. Inc.

Dennis W. Matheson. Mr. Matheson has been Motient's senior vice president and
chief technology officer since March 2000. From 1993 to March 2000, Mr. Matheson
held other technical positions within Motient, most recently as vice president
of engineering and advanced technology. Before joining Motient, Mr. Matheson was
senior manager of systems architecture for Bell Northern Research, a subsidiary
of Nortel Networks Corporation (formerly known as Northern Telecom Limited).
Prior to that, he held various positions with Northern Telecom and Bell Northern
Research within the design and product management organizations and held various
engineering positions with Texas Instruments Incorporated.


                                       73
<PAGE>

Mr. Matheson was an executive officer of Motient at the time it filed for
Chapter 11 protection. Information regarding Motient's filing under Chapter 11
of the Bankruptcy Code is provided in "Business - Motient's Chapter 11 Filing,"
and is incorporated herein by reference.

Deborah L. Peterson. Ms. Peterson has served as Motient's vice president of
system engineering and solutions since 1998. From 1992 to 1998 she held various
other technical management positions with Motient. Prior to joining Motient,
Deborah was the MIS director at Armour Swift-Eckrich, a ConAgra company, from
1988 to 1992 where she led MIS strategic planning, systems development and
support, technical support services, data center operations, and voice and data
telecommunications network planning and management. From 1984 to 1988, Ms.
Peterson served as systems consultant and project manager at Beatrice Companies
where she developed systems plans for a wide range of process manufacturing
companies including consumer durable, refrigerated and dry grocery segments.

Richard V. Crawford. Mr. Crawford has served as Motient's vice president of
operations and engineering since July 2002. Since joining Motient in 1991, Mr.
Crawford has served in various positions in network operations, focused
primarily on the quality, timeliness and cost management of Motient's network
operations, including the deployment of several architecture plans. Prior to
joining Motient/ARDIS in 1991, Mr. Crawford held various management positions
for Shark Financial Services (a division of WANG financial) from 1985 to 1991
and Continental Illinois National Bank from 1980 to 1985.

Robert Macklin. Mr. Macklin has served as Motient's general counsel and
secretary since May 2004. From September 2003 to May 2004, Mr. Macklin served as
Motient's associate general counsel and secretary. From May 2001 to September
2003, he was in-house counsel to Herman Dodge & Son, Inc., a national housewares
manufacturer and distributor. Prior to May 2001, he was an associate in the
corporate department of Skadden, Arps, Slate, Meagher & Flom (Illinois).

Myrna J. Newman. Ms. Newman has served as Motient's controller, chief accounting
officer and principal financial officer since May 2004. From April 2003 to May
2004, she served as controller and chief accounting officer. From 2001 to 2003,
she was vice president of finance for Heads and Threads International LLC, a
subsidiary of Allegheny Corporation and distributor of fasteners. Prior to that,
from 1995 to 2001, she was the controller of Heads and Threads.

Steven G. Singer. Mr. Singer has been a Motient director since May 2002 and
chairman of the board since June 2003. Since November 2000, Mr. Singer has
served as chairman and chief executive officer of American Banknote Corporation,
a public company providing documents of value (such as currency, checks,
passports, and credit cards) and related services. American Banknote filed for
protection under Chapter 11 of the Bankruptcy Code in January 2005. Since 1994,
Mr. Singer has also been chairman and chief executive officer of Pure 1 Systems,
a privately held drinking water treatment company. From 1994 to 2000, Mr. Singer
was executive vice president and chief operating officer of Romulus Holdings,
Inc., a family-owned investment fund. Mr. Singer also currently serves as the
non-executive chairman of Globix Corporation, a public company.

Gerald S. Kittner. Mr. Kittner has been a Motient director since May 2002. Since
October 2001, Mr. Kittner has been an advisor and consultant for CTA. From 1996
to 1999, Mr. Kittner was a senior vice president for legislative and regulatory
affairs with CAI Wireless Systems. When CAI Wireless Systems was acquired by
WorldCom, Inc. (then MCI) in 1999, Mr. Kittner remained with WorldCom as a
senior vice president for approximately one year. From 1996 to 2000, Mr. Kittner
served on the board of directors of the Wireless Communications Association, and
was a member of its executive and government affairs committees. Previously, Mr.
Kittner was a partner with the law firm Arter & Hadden and worked with a variety
of telecommunications clients.


                                       74
<PAGE>

Mr. Kittner was involved with CAI Wireless Systems, Inc. when it filed for
protection under Chapter 11 of the Bankruptcy Code in 1998. During all relevant
time periods relating to the Chapter 11 proceeding captioned In re CAI Wireless
Systems, Inc., Debtor, Chapter 11 Case No. 98-1766 (JJF) and In re Philadelphia
Choice Television, Inc., Debtor, Chapter 11 Case No. 98-1765 (JJF), commenced in
the United States Bankruptcy Court for the District of Delaware on July 30,
1998, Mr. Kittner was a senior vice president of CAI Wireless Systems. CAI
Wireless Systems and Philadelphia Choice Television consummated their joint plan
of reorganization and emerged from bankruptcy on October 14, 1998.

Barry A. Williamson. Mr. Williamson became a Director in March 2005. Mr.
Williamson was elected in 1992 as the 38th Texas Railroad Commissioner and
served from January 1993 to January 1999. He served as the Railroad Commission's
Chairman in 1995. During the late 1980's and early 1990's, Mr. Williamson served
under the Bush administration at the U.S. Department of Interior as the Director
of Minerals Management Service. During the 1980's, Mr. Williamson served under
the Reagan administration as a principal advisor to the U.S. Secretary of Energy
in the creation and formation of a national energy policy. Mr. Williamson began
his career with the firm of Turpin, Smith, Dyer & Saxe, and in 1985 established
the Law Offices of Barry Williamson and founded an independent oil and gas
company. Mr. Williamson serves on the Board of Directors of Tejas Incorporated,
a publicly traded brokerage and investment banking company, and SPACEHAB,
Incorporation, a publicly traded commercial and government space services
company. Mr. Williamson graduated from the University of Arkansas with a B.A. in
Political Science in 1979, and received his J.D. degree from the University of
Arkansas Law School in 1982.

Jonelle St. John. Ms. St. John has been a Motient director since November 2000.
Ms. St. John was the chief financial officer of MCI WorldCom International in
London from 1998 through 2000 following her positions as the treasurer of MCI
Communications Corporation from 1993 to 1998. Prior to working with WorldCom,
Ms. St. John was the vice president and treasurer and the vice president and
controller of Telecom*USA, which she joined in 1985. Before 1985, Ms. St. John
held various positions at Arthur Andersen LLP.

Ms. St. John was a director of Motient at the time it filed for Chapter 11
protection. Information regarding Motient's filing under Chapter 11 of the
Bankruptcy Code is provided in "Business - Motient's Chapter 11 Filing," and is
incorporated herein by reference.

James D. Dondero. Mr. Dondero has been a Motient director since July 2002. Mr.
Dondero has been president of Highland Capital Management, L.P. since 1993. Mr.
Dondero is also a director of Audio Visual Services Corp., Genesis Health
Ventures, Inc. and American Banknote Corporation, all of which are public
companies.

Raymond L. Steele. Mr. Steele was elected to the board of directors in May 2004.
Mr. Steele has been a director of Globix since June 2003, and is also a member
of the board of directors of Dualstar Technologies Corporation and American
Banknote Corporation. From August 1997 until October 2000, Mr. Steele served as
a board member of Video Services Corp. Prior to his retirement, Mr. Steele held
various senior positions such as Executive Vice President of Pacholder
Associates, Inc. (from August 1990 until September 1993), Executive Advisor at
the Nickert Group (from 1989 through 1990), and Vice President, Trust Officer
and Chief Investment Officer of the Provident Bank (from 1984 through 1988).


                                       75
<PAGE>

Audit Committee Financial Expert

Our board of directors has determined that Jonelle St. John and Raymond L.
Steele are "audit committee financial experts", as such term is defined under
Item 401(h) of Regulation S-K. Each of them is "independent" of management as
independence for audit committee members is defined by NASDAQ rules.
Stockholders should understand that this designation is a disclosure requirement
of the SEC related to Ms. St. John's and Mr. Steele's experience and
understanding with respect to certain accounting and auditing matters. The
designation does not impose on Ms. St. John or Mr. Steele any duties,
obligations or liability that are greater than are generally imposed on her as a
member of the audit committee and board of directors, and their designations as
audit committee financial experts pursuant to this SEC requirement does not
affect the duties, obligations or liability of any other member of the audit
committee or board of directors.

Board Compensation

Each non-employee member of the board of directors is entitled to receive $2,000
per month, and each member of the audit committee (currently Ms. St. John, Mr.
Kittner and Mr. Steele) and the compensation and stock option committee
(currently Mr. Singer, Mr. Kittner and Mr. Dondero) are entitled to receive an
additional $500 and $250 per month, respectively. The chairman of the board is
entitled to receive an additional $2,000 per month. All directors are eligible
to receive grants of restricted stock and grants of stock options under
Motient's 2004 Restricted Stock Plan and 2002 Stock Option Plan.

Section 16(a) Beneficial Ownership Reporting Compliance

Under the securities laws of the United States, our directors, executive
officers and any persons holding more than ten percent of our common stock are
required to report their ownership of the common stock and any changes in that
ownership to the SEC. Specific due dates for these reports have been established
by the SEC, and we are required to report in this annual report any failure to
file by these dates. Based on our review of these reports filed during and in
connection with the year ended December 31, 2004, and on certain written
representations, we do not believe that any of our directors, officers or
beneficial owners of more than ten percent of our common stock failed to file a
form or report a transaction on a timely basis other than: a Form 4 filed by JGD
Management Corp., a Form 3 filed by Raymond Steele, a Form 4 filed by Peter
Aquino, a Form 3 filed by Robert Macklin, a Form 4 filed by James Dondero, a
Form 4 filed by John Waterfall, and a Form 4 filed by Christopher Downie, each
of which were not filed on a timely basis, but have since been filed.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer and principal accounting officer. This code
of ethics has been approved by our board of directors, and has been designed to
deter wrongdoing among directors, officers and employees and promote honest and
ethical conduct, full, fair, accurate and timely disclosure, compliance with
applicable laws, rules and regulations, prompt internal reporting of code
violations, and accountability for adherence to our code. Our code of ethics is
posted in the investor relations section of our website, www.motient.com.

                                       76
<PAGE>

Item 11.  Executive Compensation.
---------------------------------

The following tables set forth (a) the compensation paid or accrued by Motient
to Motient's chief executive officer and its five other most highly compensated
executive officers receiving over $100,000 per year in 2004, all of whom are
referred to herein as the "named executive officers" for services rendered
during the fiscal years ended December 31, 2002, 2003, and 2004 and (b) certain
information relating to options granted to such individuals.


                           Summary Compensation Table
<TABLE>
<CAPTION>

                                                    Annual Compensation                      Long-Term Compensation
                                     ----------------------------------------------------------------------------------
                                                                                          Restricted     Securities
     Name and                                                            Other Annual       Stock        Underlying
  Principal Position                 Year     Salary       Bonus        Compensation(1)     Awards      Options/SARs(2)
  ------------------                 ----     ------       -----        ---------------     ------      ---------------
<S>                                  <C>      <C>          <C>               <C>              <C>         <C>
Christopher W. Downie                2004     $225,707           $0          $264             $0           101,160
Executive Vice President,            2003     $129,688           $0           $88             $0            40,000
Chief Operating Officer
and Treasurer (3)

Dennis W. Matheson                   2004     $192,880      $89,908          $248             $0                 0
Senior Vice President                2003     $181,067           $0          $168             $0            40,000
and Chief Technology Officer         2002     $177,923      $25,000          $476             $0           120,000

Deborah L. Peterson                  2004     $143,246      $61,524          $177             $0                 0
Vice President, Systems              2003     $165,890           $0          $219             $0            20,000
Engineering and Solutions            2002     $165,890      $20,000          $219             $0            50,000

Richard V. Crawford                  2004     $149,064      $39,242          $220             $0                 0
Vice President, Network              2003     $145,005           $0          $202             $0            20,000
Operations and Engineering           2002     $130,004       $5,000          $202             $0            50,000

Robert L. Macklin (4)                2004     $138,873           $0          $166             $0            10,619
General Counsel and Secretary        2003      $32,392           $0           $14             $0            25,000

Myrna J. Newman (5)                  2004     $138,641           $0          $166             $0                 0
Controller and Chief                 2003      $80,985           $0           $87             $0            15,000
Accounting Officer
</TABLE>



(1) Includes group term life insurance premiums.

(2) Reflects grants of options to purchase shares of common stock under
Motient's 2002 stock option plan. Motient has not granted stock appreciation
rights, or SARs.

(3) Mr. Downie's employment began in April 2003.

(4) Mr. Macklin's employment began in September 2003.

(5) Ms. Newman's employment began in April 2003.


                                       77
<PAGE>


The following table sets forth each grant of stock options made during fiscal
year 2004 to each of the named executive officers.

                      Option/SAR Grants in Last Fiscal Year

<TABLE>
<CAPTION>
                                                   Individual Grants
                             ---------------------------------------------------------------   Potential Realizable
                               Number of      % of Total                                      Value at Assumed Annual
                               Securities     Options/SARs                                     Rates of Stock Price
                               Underlying      Granted to    Exercise or                         Appreciation for
                             Options/SARs      Employees/    Base Price                           Option Term(1)
     Name                     Granted (2)     Fiscal Year     ($/Share)    Expiration Date      5%          10%
     ----                     -----------     -----------     ---------    ---------------      --          ---
<S>                             <C>               <C>           <C>           <C>            <C>         <C>
Christopher W. Downie           101,160           55%           $5.15(3)      8/2/2014       $326,000    $824,000
Dennis W. Matheson                    0            0%              NA            NA
Deborah L. Peterson                   0            0%              NA            NA
Richard V. Crawford                   0            0%              NA            NA
Robert L. Macklin                10,619            5%           $8.57(4)     12/13/2014       $55,000    $140,000
Myrna J. Newman                       0            0%              NA            NA
</TABLE>


(1) Based on actual option term and annual compounding.

(2) These options were fully vested upon grant

(3) 1,160 of these options have an exercise price of $3.00.

(4) 619 of these options have an exercise price of $3.00.


The following table sets forth, for each of the named executive officers, the
value of unexercised options at fiscal year-end.

<TABLE>
<CAPTION>
            Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values (1)

                                                                        Number of Securities       Value of Unexercised
                                                                             Underlying                in-the-Money
                                                                       Unexercised Options at         Options/SARs at
                                    Shares                                 Fiscal Year-End          Fiscal Year-End($)
                                 Acquired on                                Exercisable/               Exercisable/
             Name                Exercise (#)    Value-Realized ($)         Unexercisable              Unexercisable
             ----                ------------    ------------------         -------------              -------------
<S>                                 <C>               <C>                    <C>                      <C>
Christopher W. Downie               40,000            $529,250                101,160/0                $1,848,664/0
Dennis W. Matheson                  67,660             878,776                0/73,330                 0/$1,424,268
Deborah L. Peterson                 29,995             224,772                0/33,331                  0/$644,121
Richard V. Crawford                 25,750             189,288              3,334/33,331             $68,014/$644,121
Robert L. Macklin                      0                  --                14,787/20,832            $234,910/$369,768
Myrna J. Newman                      3,120              41,184                 0/9,999                  0/$203,980
</TABLE>


(1) Motient has not granted SARs.

                                       78
<PAGE>


Change of Control Agreements

Pursuant to the Plan of Reorganization, Motient entered into a change of control
agreement, effective May 1, 2002, with each of Mr. Matheson, Ms. Peterson, and
eight other vice presidents of Motient. Under the agreements, each officer is
eligible to receive one year of their annual base salary (excluding cash bonus)
in the event that both (x) a "change in control" or an anticipated "change in
control," as defined in the change of control agreement, has occurred and (y)
the employee is terminated or his or her compensation or responsibilities are
reduced. The events constituting a "change of control" generally involve the
acquisition of greater than 50% of the voting securities of Motient, as well as
certain other transactions or events with a similar effect. Other than Mr.
Matheson and Ms. Peterson, the Company currently has no employees with such a
change of control agreement.

Compensation of Directors

Information about compensation of directors appears in Item 10 of this annual
report on Form 10-K and is incorporated herein by reference.

2002 Stock Option Plan

Our 2002 stock option plan was adopted by the board of directors on May 31, 2002
and received stockholder approval on July 11, 2002. A total of 2,993,024 shares
of common stock have been reserved for issuance under the 2002 stock option
plan. Under the 2002 stock option plan, we are authorized to grant options to
purchase shares of common stock intended to qualify as incentive stock options,
as defined under section 422 of the Internal Revenue Code of 1986, as amended,
and non-qualified stock options to any employees, outside directors,
consultants, advisors and individual service providers whose participation in
the 2002 stock option plan is determined by our compensation and stock option
committee to be in our best interests. The term of each stock option is fixed by
the board of directors or the compensation committee, and each stock option is
exercisable within ten years of the original grant date. Generally, an option is
not transferable by the recipient except by will or the laws of descent and
distribution. Some change of control transactions, such as a sale of Motient,
may cause awards granted under the 2002 stock option plan to vest. As of
December 31, 2004, options to purchase 605,727 shares of our common stock were
outstanding.

2004 Restricted Stock Plan

In August 2004, the Company adopted a restricted stock plan, and subsequently
registered the shares to be issued under such plan on a registration statement
on Form S-8. Pursuant to this plan, the Company may issue up to 1,000,000 shares
of restricted common stock to employees or directors. In September 2004, the
Company issued an aggregate of 15,400 shares of restricted stock to its
directors as partial compensation for their service on the board of directors.
Such shares vested in February 2005. Also in February 2005, the Company issued
an aggregate of 95,286 shares of restricted stock to certain consultants and
advisors, which vested on February 18, 2005.

Compensation and Stock Option Committee Interlocks and Insider Participation

In 2004, the compensation and stock option committee of Motient's board of
directors consisted of Messrs. Singer, Kittner and Dondero. During this time,
none of these individuals were executive officers of Motient.

                                       79
<PAGE>


Mr. Kittner has been, in the past, an advisor and consultant for CTA. During
2004, Motient and/or certain of its subsidiaries were party to certain contracts
and/or transactions with CTA. All of these contracts and transactions were
approved by Motient's board of directors, and Motient believes that the
contracts and transactions were made on terms substantially as favorable to
Motient as could have been obtained from unaffiliated third parties. The
following is a description of such contracts and transactions. In addition, this
section describes the relationship between Steven Singer and one of the lenders
under our credit facility. For additional information concerning these
relationships, see "Certain Relationships and Related Transactions."

On January 30, 2004, Motient engaged CTA to act as chief restructuring entity.
As consideration for this work, we agreed to pay to CTA a monthly fee of
$60,000. The new agreement modifies the consulting arrangement discussed above.

Except for the warrants and options offered and provided to CTA and certain of
its affiliates described below, neither CTA, nor any of its principals or
affiliates is a stockholder of Motient, nor does it hold any debt of Motient
(other than indebtedness as a result of consulting fees and expense
reimbursement owed to CTA in the ordinary course under our existing agreement
with CTA). CTA has informed us that in connection with the conduct of its
business in the ordinary course, (i) it routinely advises clients in and appears
in restructuring cases involving telecommunications companies throughout the
country, and (ii) certain of our stockholders and bondholders and/or certain of
their respective affiliates or principals, may be considered to be (A) current
clients of CTA in matters unrelated to Motient; (B) former clients of CTA in
matters unrelated to Motient; and (C) separate affiliates of clients who are (or
were) represented by CTA in matters unrelated to Motient.

In April and July 2004, as part of our private placements of common stock,
certain CTA affiliates were provided warrants for 400,000 and 340,000 shares,
respectively, of our common stock at an exercise price of $5.50 and $8.57,
respectively, per share. In December 2004, certain CTA affiliates were provided
options to purchase 125,000 shares of our common stock at a price of $8.57 per
share. In February 2005, CTA and certain of its affiliates were paid an
investment banking fee of $3,709,796 in cash and stock in relation to the
closing of Motient's acquisition of certain interests in MSV. Such fee is equal
to 1% of the aggregate consideration paid by Motient for such MSV interests. 40%
of this fee was paid to The Singer Children's Management Trust, which is a trust
established for the benefit of the children of Gary Singer, a former lender
under the 2003 Term Credit Agreement and the brother of Steven Singer, Motient's
chairman of the board. This amount was paid at the direction of CTA as
compensation for the assistance Gary Singer provided to CTA in the transaction.


                                       80
<PAGE>


Item 12. Security Ownership Of Certain Beneficial Owners and Management and
Related Shareholder Matters.
----------------------------

Stock Ownership Of Certain Beneficial Owners and Management and Related
Stockholder Matters.
--------------------

The following table and the accompanying notes set forth certain information, as
of March 15, 2005 (or any other date that is indicated) concerning the
beneficial ownership of Motient's common stock by (i) each person who is known
by Motient to own beneficially more than five percent of Motient's common stock,
(ii) each director, (iii) each executive officer named in the summary
compensation table and (iv) all directors and executive officers as a group.
Except as otherwise indicated, each person listed in the table has informed
Motient that such person has sole voting and investment power with respect to
such person's shares of common stock and record and beneficial ownership with
respect to such person's shares of common stock.

<TABLE>
<CAPTION>
                                                        Number of        % of Class
Name of Beneficial Owner                                Shares (1)           (1)
------------------------                                ----------       ----------
<S>                                                     <C>                 <C>
Highland Capital Management, L.P. (2)
13445 Noel Road                                          6,042,702           9.3%
Suite 3300
Dallas, TX  75240

Paul Tudor Jones, II (3)
c/o Tudor Investment Corporation
1275 King St.                                            4,378,944           8.6%
Greenwich, CT 06831

George W.  Haywood (4)
c/o Cronin & Vris, LLP
380 Madison Avenue                                       5,804,500           9.0%
24th Floor
New York, NY 10017

James G.  Dinan (5)
York Capital Management & affiliates
350 Park Avenue                                          3,574,559           5.5%
4th Floor
New York, NY 10022

Rajendra Singh (6)
Telcom Ventrues, L.L.C.
201 N. Union St., Suite 360                              8,801,888          13.6%
Alexandria, VA 22314
</TABLE>

                                       81
<PAGE>


Directors and Executive Officers
Dennis W. Matheson                            40,000                   *
Christopher W. Downie (8)                    101,160                   *
Deborah L. Peterson                           11,733                   *
Richard V. Crawford                                0                   *
Robert L. Macklin (7)                         14,208                   *
Myrna J. Newman (7)                            2,500                   *
Barry A. Williamson                                0                   *
Gerald S. Kittner (7)                         18,814                   *
Steven G. Singer  (7)                         32,517                   *
Jonelle St. John (7)                          21,114                   *
Raymond L. Steele (7)                         11,800                   *
James D. Dondero (2)                       6,042,702                9.3%
                                           ---------                ---

All directors and named executive
officers as a group (13 persons)           6,384,748                9.9%
                                           =========                ===

* Less than 1% of the outstanding shares.

(1)  The information regarding beneficial ownership of our common stock has been
     presented in accordance with the rules of the SEC and is not necessarily
     indicative of beneficial ownership for any other purpose. Under these
     rules, beneficial ownership of common stock includes any shares as to which
     a person, directly or indirectly, has or shares voting power or investment
     power and also any shares as to which a person has the right to acquire
     such voting or investment power within 60 days through the exercise of any
     stock option or other right. The percentage of beneficial ownership as to
     any person as of a particular date is calculated by dividing the number of
     shares beneficially owned by such person by the sum of the number of shares
     outstanding as of such date and the number of shares as to which such
     person has the right to acquire voting or investment power within 60 days.
     As used in this report, "voting power" is the power to vote or direct the
     voting of shares and "investment power" is the power to dispose or direct
     the disposition of shares. Except as noted, each stockholder listed has
     sole voting and investment power with respect to the shares shown as
     beneficially owned by such stockholder.

(2)  Indirect ownership consists of shares of Common Stock held by a filing
     group consisting of Highland Capital Management, L.P. ("Highland Capital");
     Strand Advisors, Inc. ("Strand"); Highland Crusader Offshore Partners, L.P.
     ("Crusader"); Prospect Street High Income Portfolio, Inc. ("PHY"); Prospect
     Shares Income Shares, Inc. ("CNN"); Highland Legacy Limited ("Legacy");
     PAMCO Cayman, Limited ("PAMCO"); Highland Equity Focus Fund, L.P. ("Equity
     Focus"); Highland Equity Fund, L.P. ("Equity Fund") and James D. Dondero.
     Highland Capital is the general partner of Crusader, Equity Fund and Equity
     Focus, and the investment advisor for PHY, CNN, Legacy and PAMCO. Strand is
     the general partner of Highland Capital. Mr. Dondero is the President of
     Highland Capital and the President and a director of Strand. The amount
     also includes warrants for the purchase of 825,000 additional shares, which
     may never vest. Highland Capital, Strand and Mr. Dondero expressly disclaim
     beneficial ownership of the securities reported herein except to the extent
     of their pecuniary interest therein.

                                       82
<PAGE>


(3)  The shares of Common Stock reported herein as beneficially owned are owned
     directly by Tudor Proprietary Trading, L.L.C., The Altar Rock Fund, L.P.,
     The Raptor Global Portfolio, Ltd. and The Tudor BVI Global Portfolio Ltd. .
     Because Tudor Investment Corporation is the sole general partner of Altar
     Rock and provides investment advisory services to Raptor Portfolio and BVI
     Portfolio, Tudor Investment Corporation may be deemed beneficially to own
     the shares of Common Stock owned by each. Tudor Investment Corporation
     expressly disclaims such beneficial ownership. In addition, because Mr.
     Jones is the controlling shareholder of Tudor Investment Corporation and
     the indirect controlling equity holder of Tudor Proprietary Trading, Mr.
     Jones may be deemed beneficially to own the shares of Common Stock deemed
     beneficially owned by Tudor Investment Corporation and Tudor Proprietary
     Trading. Mr. Jones expressly disclaims such beneficial ownership.

(4)  Does not include 130,000 shares owned by Mr. Haywood's spouse and children.

(5)  James G. Dinan beneficially owns the 2,276,445 shares of our common stock,
     which includes shares owned by various funds and accounts over which Mr.
     Dinan has discretionary investment authority. Mr. Dinan is the senior
     managing member and holder of a controlling interest in Dinan Management,
     L.L.C., York Select Domestic Holdings, LLC, York Select Offshore Holdings,
     LLC, York Offshore Holdings L.L.C. and York Distressed Domestic Holdings,
     LLC. Mr. Dinan is also a director and holder of a controlling interest in
     York Offshore Holdings, Limited. York Offshore Holdings is the investment
     manager of York Investment. Dinan Management is the general partner of York
     Capital Management. York Select Domestic Holdings is the general partner of
     York Select. York Select Offshore Holdings is the investment manager of
     York Select Unit Trust. York Distressed Domestic Holdings is the investment
     manager of York Distressed Opportunities Fund. York Offshore Holdings is
     the investment manager of York Offshore Investors. Mr. Dinan is the
     president and sole stockholder of JGD Management Corp., which manages the
     other funds and accounts that hold our common stock over which Mr. Dinan
     has discretionary investment authority.

(6)  307,042 of the shares listed are shares underlying warrants to purchase
     common stock which may never vest. Includes 2,046,951 shares and 153,521
     shares underlying warrants to purchase common stock that are held by Dr.
     Singh's wife, Neera Singh. Includes; 4,093,902 shares of Motient common
     stock and 307, 042 shares of underlying warrants held by two irrevocable
     educational trusts established for the benefit of Dr. Singh's children.
     Mrs. Singh is one of the co-trustees of each trust. Dr. and Mrs. Singh
     disclaim any beneficial ownership of such shares to the extent allowable by
     law.

(7)  Includes shares underlying stock options that are fully vested and
     exercisable.

(8)  Comprised of shares underlying options and a warrant that are fully vested
     and exercisable.


                                       83
<PAGE>


Securities Issued Under Equity Compensation Plans

The following table provides information regarding equity compensation plans
under which our equity securities were authorized for issuance as of December
31, 2004.

                      Equity Compensation Plan Information
<TABLE>
<CAPTION>
                                                                                                       Number of
                                                                                                       securities
                                                                                                       remaining
                                                                                                      available for
                                                             Number of           Weighted-           future issuance
                                                         securities to be         average             under equity
                                                            issued upon        exercise price         compensation
                                                            exercise of        of outstanding        plans (excluding
                                                            outstanding          options,              securities
                                                         options, warrants       warrants               reflected
                                                            and rights          and rights             in column(a))
Plan Category                                                   (a)               (b)                      (c)
-------------                                                   ---               ---                      ---
<S>                                                          <C>                    <C>              <C>
Equity compensation plans approved by
security holders                                               605,727            $5.82(1)            1,741,200

Equity compensation plans not approved by security
holders (2)                                                          0               NA                 984,600
                                                             ---------             -------            ---------
Total                                                          605,727            $5.82(1)            2,725,800
</TABLE>

(1) In March 2003, our board of directors approved the reduction in the exercise
price of all of the outstanding stock options from $5.00 per share to $3.00 per
share.
(2) 2004 Restricted Stock Plan. See above description for further details.

Item 13.  Certain Relationships and Related Transactions.
---------------------------------------------------------

This section describes arrangements with CTA, an entity in which (i) Jared E.
Abbruzzese, a director until June 20, 2003, is the chairman, (ii) Gerald S.
Kittner, a Motient director, is an advisor and consultant, (iii) Christopher W.
Downie, Motient's executive vice president, chief operating officer and
treasurer, was formerly affiliated with CTA as an independent consultant and
(iv) Peter Aquino, a former Motient director, was formerly a senior managing
director. Additionally, this section describes related party transactions
concerning our credit facility and our April, July and November 2004 private
placements of common stock.


                                       84
<PAGE>

Communication Technology Advisors LLC

On January 30, 2004, we engaged CTA to act as our chief restructuring entity. As
consideration for this work, Motient agreed to pay to CTA a monthly fee of
$60,000. The new agreement amends the consulting arrangement discussed above. In
April 2004, Motient paid CTA $440,000 for all past deferred fees.

Except for the warrants and options offered to CTA described below, and certain
warrants received by certain CTA affiliates in connection with the April 7, 2004
private placement of our common stock, neither CTA, nor any of its principals or
affiliates is a stockholder of Motient, nor does CTA hold any debt of Motient
(other than indebtedness as a result of consulting fees and expense
reimbursement owed to CTA in the ordinary course under our existing agreement
with CTA). CTA has informed us that in connection with the conduct of its
business in the ordinary course, (i) it routinely advises clients in and appears
in restructuring cases involving telecommunications companies throughout the
country, and (ii) certain of our stockholders and bondholders and/or certain of
their respective affiliates or principals, may be considered to be (A) current
clients of CTA in matters unrelated to Motient; (B) former clients of CTA in
matters unrelated to Motient; and (C) separate affiliates of clients who are (or
were) represented by CTA in matters unrelated to Motient.

In April 2004, as part of our private placements of common stock, certain CTA
affiliates were provided warrant for 400,000 and 340,000 shares, respectively,
of our common stock at an exercise price of $5.50 and $8.57, respectively, per
share. In December 2004, certain CTA affiliates were provided options to
purchase 125,000 shares of our common stock at a price of $8.57 per share.

In February 2005, CTA and certain of its affiliates were paid an investment
banking fee of $3,709,796 in cash and stock in relation to the closing of
Motient's acquisition of certain interests in MSV. Such fee is equal to 1% of
the aggregate consideration paid by Motient for such MSV interests.

Mr. Abbruzzese, Mr. Kittner and Mr. Aquino did not participate in the
deliberations or vote of the Board with respect to the foregoing matters while
serving as a member of the Board.

Term Credit Facility

On January 27, 2003, our wholly-owned subsidiary, Motient Communications, closed
a $12.5 million term credit agreement with a group of lenders, including several
of our existing stockholders. The lenders include the following entities or

                                      85
<PAGE>


their affiliates: M&E Advisors, L.L.C, Bay Harbour Partners, York Capital, and
Lampe Conway & Co. York Capital is affiliated with James G. Dinan and JGD
Management Corp. Bay Harbour Management, JGD Management Corp. and James G. Dinan
each hold 5% or more of our common stock. The lenders also include Gary Singer,
directly or through one or more entities. Gary Singer is the brother of Steven
G. Singer, one of our directors. The facility terminated on December 31, 2004,
and all amounts due and owing pursuant to the facility have been repaid. We do
not anticipate that it borrowing availability will be extended again.

Private Placements of Common Stock

Certain of our directors and holders of more than 5% of our common stock
participated in the April 7, July 1, and November 12, 2004 private placements of
our common stock. PDA Group, LLC, a wholly-owned entity of Peter D. Aquino, one
of our directors, was assigned by Tejas Securities, our placement agent,
warrants to purchase 56,250 shares of our common stock at a price of $5.50 per
share. James D. Dondero, a director and beneficial owner of more than 5% of our
common stock, purchased an aggregate of 2,420,688 shares of our common stock in
such private placements. In addition, he also received warrants to purchase
350,058 shares of our common stock at a price of $8.57 per share all of which
will vest if and only if we do not meet certain deadlines with respect to the
registration of the common stock sold in the private placement.

Item 14.  Principal Accountant Fees and Services.
-------------------------------------------------

Auditor Fees
------------

The following table outlines our fees from our auditors for 2004 and 2003.

                                 Twelve Months           Twelve Months
                               Ended December 31,     Ended December 31,
                                    2004                   2003
                                    -----                  ----
    Audit fees                    $716,230               $695,193
    Audit related fees              20,750                 64,425
    Tax fees                         4,540                 25,325
    Other                                0                 20,338
                                   -------                 ------
       Total                      $741,520               $805,281


Audit Committee Policies
------------------------

The audit committee of Motient's board of directors is solely responsible for
the approval in advance of all audit and permitted non-audit services to be
provided by the independent auditors (including the fees and other terms
thereof), subject to the de minimus exceptions for non-audit services provided
by Section 10A(i)(1)(B) of the Exchange Act, which services are subsequently
approved by the audit committee prior to the completion of the audit. None of
the fees listed above are for services rendered pursuant to such de minimus
exceptions.


                                      86
<PAGE>


                                     PART IV

Item 15.  Exhibits and Financial Statement Schedules
---------------------------------------------------------------------------

(1)(a)  The following documents are filed as part of this Form 10-K:

    1)  The following consolidated financial statements of Motient Corporation
are included as follows:


<TABLE>
                                                                                                               Page
                                                                                                               ----

<S>                                                                                                            <C>
Report of Independent Registered Public Accounting Firm ........................................................F-1

Consolidated Statements of Operations...........................................................................F-2

Consolidated Balance Sheets.....................................................................................F-3

Consolidated Statements of Changes in Stockholders' Equity (Deficit)............................................F-4

Consolidated Statements of Cash Flows...........................................................................F-5

Notes to Consolidated Financial Statements......................................................................F-6

Quarterly Financial Data.......................................................................................F-43


     2) The following consolidated financial statements of Mobile Satellite Ventures LP are included as follows:

                                                                                                               Page
                                                                                                               ----

Independent Auditors' Report....................................................................................M-1

Consolidated Balance Sheets.....................................................................................M-2

Consolidated Statements of Operations...........................................................................M-3

Consolidated Statements of Partners' Equity (Deficit)...........................................................M-4

Consolidated Statements of Cash Flows...........................................................................M-5

Notes to Consolidated Financial Statements......................................................................M-6
</TABLE>

                                      87
<PAGE>


         (2)   Financial Statement Schedules

Financial Statement Schedules not included below have been omitted because they
are not required or not applicable, or because the required information is shown
in the financial statements or notes thereto.

               Schedule II - Valuation and Qualifying Accounts

         (3)   Exhibits

3.1      -     Restated Certificate of Incorporation of the Company (as restated
               effective May 1, 2002) (incorporated by reference to Exhibit 3.1
               of the Company's Amendment No. 2 to Registration Statement on
               Form 8-A, filed May 1, 2002).

3.2      -     Amended and Restated Bylaws of the Company (as amended and
               restated effective May 1, 2002) (incorporated by reference to
               Exhibit 3.1 of the Company's Amendment No. 2 to Registration
               Statement on Form 8-A, filed May 1, 2002).

4.1      -     Specimen of Common Stock Certificate (incorporated by reference
               to Exhibit 4.1 of the Company's Amendment No. 2 to Registration
               Statement on Form 8-A, filed May 1, 2002).

4.2      -     Warrant Agreement between the Registrant and Equiserve Trust
               Company, N.A., as warrant agent, dated May 1, 2002 (incorporated
               by reference to Exhibit 4.1 of the Company's Registration
               Statement on Form 8-A, filed May 1, 2002).

4.2a     -     Specimen of Warrant Certificate of the Company (incorporated by
               reference to Exhibit 4.2 of the Company's Registration Statement
               on Form 8-A, filed May 1, 2002).

10.2     -     Credit Agreement by and between Motorola Inc. and ARDIS Company
               dated June 17, 1998 (incorporated by reference to Exhibit 10.61
               to the Company's Current Report on Form 10-Q dated June 30, 1998
               (File No. 0-23044)).

10.2a    -     Amendment No. 2, dated September 1, 2000, to the Credit
               Agreement, dated as of June 17, 1998, by and between Motorola,
               Inc. and Motient Communications Company (formerly known as ARDIS
               Company) (incorporated by reference to Exhibit 10.22a to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               September 30, 2000 (File No. 0-23044)).

10.2b    -     Assumption, Release, Amendment and Waiver Agreement by and among
               Motorola, Inc., Motient Communications Inc. and Motient
               Communications Company, dated as of December 29, 2000
               (incorporated by reference to Exhibit 10.22b to the Company's
               Annual Report on Form 10-K for the year ended December 31, 2001
               (File No. 0-23044)).

10.3     -     Investment Agreement dated as of June 22, 2000, by and among the
               Company, Motient Satellite Ventures LLC, and certain other
               investors (incorporated by reference to Exhibit 10.41 to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               June 30, 2000 (File No. 0-23044)).


                                      88
<PAGE>


10.4     -     Asset Sale Agreement between Motient Satellite Ventures LLC and
               Motient Services Inc. dated as of June 29, 2000 (incorporated by
               reference to Exhibit 10.42 to the Company's Quarterly Report on
               Form 10-Q for the quarter ended June 30, 2000 (File No.
               0-23044)).

10.4a    -     Amendment No. 1, dated as of November 29, 2000, to Asset Sale
               Agreement, dated as of June 29, 2000, between Motient Satellite
               Ventures LLC and Motient Services Inc. (incorporated by reference
               to Exhibit 10.42a to the Company's annual report on Form 10-K for
               the year ended December 31, 2000 (File No. 0-23044)).

10.4b    -     Amended and Restated Asset Sale Agreement, dated as of January 8,
               2001, between Mobile Satellite Ventures LLC and Motient Services
               Inc. (incorporated by reference to Exhibit 10.42b to the
               Company's annual report on Form 10-K for the year ended December
               31, 2000 (File No. 0-23044)).

10.4c    -     Amendment, dated as of October 12, 2001, to the Amended and
               Restated Asset Sale Agreement, dated as of January 8, 2001, by
               and between Motient Services Inc. and Mobile Satellite Ventures
               LLC (incorporated by reference to Exhibit 10.42c to the Company's
               quarterly report on Form 10-Q for the quarter ended September 30,
               2001 (File No. 0-23044)).

10.5     -     Asset Sale Agreement, dated November 29, 2000, by and among the
               Company, Motient Services Inc. and Aether Systems, Inc.
               (incorporated by reference to Exhibit 10.46 to the Company's
               Annual Report on Form 10-K for the year ended December 31, 2000
               (File No. 0-23044)).

10.6     -     January 2001 Investment Agreement, dated as of January 8, 2001,
               by and among the Company, Mobile Satellite Ventures LLC, TMI
               Communications and Company, Limited Partnership, and the other
               investors named therein (incorporated by reference to Exhibit
               10.48 to the Company's Annual Report on Form 10-K for the year
               ended December 31, 2000 (File No. 0-23044)).

10.7     -     Document Standstill and Termination Agreement, dated as of
               January 8, 2001, by and among the Company, Mobile Satellite
               Ventures LLC, Motient Services Inc., and certain investors named
               therein (incorporated by reference to Exhibit 10.50 to the
               Company's annual report on Form 10-K for the year ended December
               31, 2000 (File No. 0-23044)).

10.7a    -     Amended and Restated Document Standstill and Termination
               Agreement, dated as of October 12, 2001 (incorporated by
               reference to Exhibit 10.50a to the Company's Quarterly Report on
               Form 10-Q for the quarter ended September 30, 2001 (File No.
               0-23044)).

10.8     -     Amended and Restated Investment Agreement, dated October 12,
               2001, by and among Motient Corporation, Mobile Satellite Ventures
               LLC, TMI Communications and Company, Limited Partnership, and the
               other investors named therein (incorporated by reference to
               Exhibit 10.55 to the Company's quarterly report on Form 10-Q for
               the quarter ended September 30, 2001 (File No. 0-23044)).


                                      89
<PAGE>


10.9     -     Form of Stockholders' Agreement of Mobile Satellite Ventures GP
               Inc. (incorporated by reference to Exhibit 10.56 to the Company's
               quarterly report on Form 10-Q for the quarter ended September 30,
               2001 (File No. 0-23044)).

10.9a    -     Stockholders' Agreement, dated as of November 26, 2001, of Mobile
               Satellite Ventures GP Inc. (incorporated by reference to Exhibit
               10.56a of the Company's Current Report on Form 8-K dated November
               19, 2001 (File No. 0-23044)).

10.10    -     Form of Limited Partnership Agreement of Mobile Satellite
               Ventures LP (incorporated by reference to Exhibit 10.57 to the
               Company's quarterly report on Form 10-Q for the quarter ended
               September 30, 2001 (File No. 0-23044)).

10.11    -     Form of Convertible Note of Mobile Satellite Ventures LP, in the
               amount of $50.0 million issued to MSV Investors LLC (incorporated
               by reference to Exhibit 10.58 to the Company's quarterly report
               on Form 10-Q for the quarter ended September 30, 2001 (File No.
               0-23044)).

10.12    -     Form of Promissory Note of Mobile Satellite Ventures LP, in the
               amount of $15.0 million issued to Motient Services Inc.
               (incorporated by reference to Exhibit 10.59 to the Company's
               quarterly report on Form 10-Q for the quarter ended September 30,
               2001 (File No. 0-23044)).

10.13    -     Registration Rights Agreement between the Company and Highland
               Capital Management, L.P., and Morgan Stanley Investment
               Management, dated May 1, 2002 (incorporated by reference to
               Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for
               the quarter ended March 31, 2002) (File No. 0-23044)).

10.14*   -     Form of Change of Control Agreement for Officers of the Company
               (incorporated by reference to Exhibit 10.2 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended March 31,
               2002 (File No. 0-23044)).

10.15    -     Senior Indebtedness Note of MVH Holdings Inc., in the amount of
               $19.0 million issued to Rare Medium Group, Inc., dated May 1,
               2002 (incorporated by reference to Exhibit 10.3 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended March 31,
               2002 (File No. 0-23044)).

10.16    -     Senior Indebtedness Note of MVH Holdings Inc., in the amount of
               $750,000 issued to Credit Suisse First Boston, dated May 1, 2002
               (incorporated by reference to Exhibit 10.4 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended March 31,
               2002 (File No. 0-23044)).

10.17    -     Settlement Agreement by and among the Registrant and Rare Medium
               Group, Inc., dated March 28, 2002 (incorporated by reference to
               Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for
               the quarter ended March 31, 2002 (File No. 0-23044)).

10.18    -     Form of Warrant to purchase 343,450 shares of the Company's
               common stock at an exercise price of $3.95 per share issued to
               Evercore Partners, L.P. (incorporated by reference to Exhibit
               10.28 to Amendment No. 1 to the Company's Registration Statement
               on Form S-1 (File No. 333-87844)).


                                      90
<PAGE>


10.19    -     Debtors' Amended Joint Plan of Reorganization Under Chapter 11 of
               the Bankruptcy Code, dated February 27, 2002 (incorporated by
               reference to Exhibit 99.2 to the Registrant's Current Report on
               Form 8-K dated March 4, 2002 (File No. 0-23044)).

10.20*   -     Motient Corporation 2002 Stock Option Plan (incorporated by
               reference to Exhibit 99.1 to the Company's registration statement
               on Form S-8 (File No. 333-92326)).

10.21*   -     Form of Stock Option Agreement (incorporated by reference to
               Exhibit 99.2 to the Company's registration statement on Form S-8
               (File No. 333-92326)).

10.22    -     Form of Warrant to purchase up to 500,000 shares of the Company's
               common stock at an exercise price of $3.00 per share issued to
               certain affiliates of Communication Technology Advisors LLC
               (incorporated by reference to Exhibit 10.22 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended June 30,
               2002).

10.23*   -     Executive Retention Agreement, dated as of July 16, 2002, by and
               between Walter V. Purnell, Jr. and the Company (incorporated by
               reference to Exhibit 10.23 to the Company's Quarterly Report on
               Form 10-Q for the quarter ended September 30, 2002).

10.24    -     Amended and Restated Term Credit Agreement, dated January 27,
               2003, by and among the Company, Motient Communications Inc.,
               Motient Holdings Inc., the Lenders named therein, and M&E
               Advisors, L.L.C., as Administrative Agent and Collateral Agent
               (incorporated by reference to Exhibit 10.24 to the Company's
               Annual Report on Form 10-K for the year ended December 31, 2002).

10.25    -     Security Agreement, dated as of January 27, 2003, between Motient
               Communications Inc. and M&E Advisors L.L.C. as Collateral Agent
               (incorporated by reference to Exhibit 10.25 to the Company's
               Annual Report on Form 10-K for the year ended December 31, 2002).

10.26    -     First Amendment to Security Agreement, dated as of January 30,
               2003, between Motient Communications Inc. and M&E Advisors L.L.C.
               as Collateral Agent (incorporated by reference to Exhibit 10.26
               to the Company's Annual Report on Form 10-K for the year ended
               December 31, 2002).

10.27    -     Motient Corporation Share Pledge Agreement, dated as of January
               27, 2003, between Motient Corporation and M&E Advisors L.L.C., as
               Collateral Agent (incorporated by reference to Exhibit 10.27 to
               the Company's Annual Report on Form 10-K for the year ended
               December 31, 2002).

10.28    -     Motient Holdings Share Pledge Agreement, dated as of January 27,
               2003, between Motient Holdings Inc. and M&E Advisors L.L.C., as
               Collateral Agent (incorporated by reference to Exhibit 10.28 to
               the Company's Annual Report on Form 10-K for the year ended
               December 31, 2002).

                                       91
<PAGE>


10.29    -     Form of Warrant to purchase shares of common stock of Motient
               Corporation issued to lenders under the Amended and Restated Term
               Credit Agreement dated as of January 27, 2003 (incorporated by
               reference to Exhibit 10.29 to the Company's Annual Report on Form
               10-K for the year ended December 31, 2002).

10.30*   -     Letter amendment to Executive Retention Agreement, dated as of
               February 10, 2004, by and between Walter V. Purnell, Jr. and the
               Company (incorporated by reference to Exhibit 10.30 to the
               Company's Annual Report on Form 10-K for the year ended December
               31, 2002).

10.31    -     Amendment No. 1 to Amended and Restated Term Credit Agreement,
               dated March 16, 2004, by and among Motient Communications Inc.,
               Motient License Inc., the Required Lenders party thereto, and M&E
               Advisors, L.L.C., as Administrative Agent and Collateral Agent
               (incorporated by reference to Exhibit 10.31 to the Company's
               Annual Report on Form 10-K for the year ended December 31, 2002).

10.32    -     Omnibus Amendment to SLA Note and Credit Facility, dated as of
               March 16, 2004, by and among Motient Communications Inc., Motient
               Corporation, Motient Holdings Inc., Motient Services Inc., and
               Motorola, Inc. (incorporated by reference to Exhibit 10.32 to the
               Company's Annual Report on Form 10-K for the year ended December
               31, 2002).

10.33    -     Share Pledge Agreement, dated as of March 16, 2004, by and
               between Motient Communications Inc. and M&E Advisors, L.L.C.
               (incorporated by reference to Exhibit 10.33 to the Company's
               Annual Report on Form 10-K for the year ended December 31, 2002).

10.34    -     Warrant to purchase shares of common stock of Motient
               Corporation, issued to lenders under Amendment No. 1 to Amended
               and Restated Term Credit Agreement, dated March 16, 2004
               (incorporated by reference to Exhibit 10.34 to the Company's
               Annual Report on Form 10-K for the year ended December 31, 2002).

10.35    -     Registration Rights Agreement, dated March 16, 2004, by and
               between Motient Corporation and M&E Advisors, L.L.C. in its
               capacity as Administrative and Collateral Agent under Amendment
               No. 1 to Amended and Restated Term Credit Agreement (incorporated
               by reference to Exhibit 10.35 to the Company's Annual Report on
               Form 10-K for the year ended December 31, 2002).

10.36    -     Collateral Agency, Subordination and Intercreditor Agreement,
               dated as of March 16, 2004, by and among Motient Communications
               Inc., Motient License Inc., M&E Advisors L.L.C., and Motorola,
               Inc. (incorporated by reference to Exhibit 10.36 to the Company's
               Annual Report on Form 10-K for the year ended December 31, 2002).

10.37    -     Subordinate Motient Communications Share Pledge Agreement, dated
               as of March 16, 2004, by and between Motient Communications Inc.
               and Motorola, Inc. (incorporated by reference to Exhibit 10.37 to
               the Company's Annual Report on Form 10-K for the year ended
               December 31, 2002).

                                       92
<PAGE>


10.38    -     Common Stock Purchase Agreement, dated as of April 7, 2004, by
               and among Motient Corporation and the Raptor Global Portfolio,
               Ltd., et al (incorporated by reference to Exhibit 10.38 to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               March 31, 2003).

10.39    -     Registration Rights Agreement, dated as of April 7, 2004, by and
               among Motient Corporation and the Raptor Global Portfolio, Ltd.,
               et al (incorporated by reference to Exhibit 10.39 to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               March 31, 2003).

10.40    -     Form of Common Stock Purchase Warrant, dated as of April 7, 2004
               (incorporated by reference to Exhibit 10.40 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended March 31,
               2003).

10.41    -     Form of Common Stock Purchase Warrant, dated as of April 7, 2004
               (incorporated by reference to Exhibit 10.41 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended March 31,
               2004).

10.42    -     Securities Purchase Agreement, dated as of June 30, 2004, by and
               among Motient Corporation and the Raptor Global Portfolio, Ltd.,
               et al (incorporated by reference to Exhibit 10.42 to the
               Company's Registration Statement on Form S-1 filed on July 6,
               2004)

10.43    -     Registration Rights Agreement, dated as of June 30, 2004, by and
               among Motient Corporation and the Raptor Global Portfolio, Ltd.,
               et al (incorporated by reference to Exhibit 10.42 to the
               Company's Registration Statement on Form S-1 filed on July 6,
               2004)

10.44    -     Form of Common Stock Purchase Warrant, dated as of June 30, 2004
               (incorporated by reference to Exhibit 10.42 to the Company's
               Registration Statement on Form S-1 filed on July 6, 2004)

10.45    -     Form of Common Stock Purchase Warrant, dated as of June 30, 2004
               (incorporated by reference to Exhibit 10.42 to the Company's
               Registration Statement on Form S-1 filed on July 6, 2004)

10.46    -     Warrant Issued to Motorola, Inc. (incorporated by reference to
               Exhibit 10.42 to the Company's Quarterly Report on Form 10-Q for
               the quarter ended June 30, 2004)

10.47    -     Common Stock Purchase Agreement, dated as of November 12, 2004,
               by and among Motient Corporation and the investors listed therein
               (incorporated by reference to Exhibit 10.43 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2004)

10.48    -     Registration Rights Agreement, dated as of November 12, 2004, by
               and among Motient Corporation and the investors listed therein
               (incorporated by reference to Exhibit 10.44 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2004)

                                       93
<PAGE>


10.49    -     Form of Common Stock Purchase Warrant, dated as of November 12,
               2004 (incorporated by reference to Exhibit 10.45 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2004)

10.50    -     Purchase Agreement, dated as of November 12, 2004, by and among
               Motient Ventures Holding Inc., Mobile Satellite Ventures LP, et
               al (incorporated by reference to Exhibit 10.46 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2004)

10.51    -     Note Exchange Agreement, dated as of November 12, 2004, by and
               among Motient Ventures Holding Inc., Mobile Satellite Ventures
               LP, et al (incorporated by reference to Exhibit 10.47 to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               September 30, 2004)

10.52    -     Amended and Restated Limited Partnership Agreement, dated as of
               November 12, 2004, by and among Motient Ventures Holding Inc.,
               Mobile Satellite Ventures LP, et al (incorporated by reference to
               Exhibit 10.48 to the Company's Quarterly Report on Form 10-Q for
               the quarter ended September 30, 2004)

10.53    -     Amended and Restated Stockholders Agreement, dated as of November
               12, 2004, by and among Motient Ventures Holding Inc., Mobile
               Satellite Ventures GP Inc., et. al. (incorporated by reference to
               Exhibit 10.49 to the Company's Quarterly Report on Form 10-Q for
               the quarter ended September 30, 2004)

10.54    -     Second Amended and Restated Parent Transfer/Drag Along Agreement,
               dated as of November 12, 2004, by and among Motient Corporation,
               et. al. (incorporated by reference to Exhibit 10.50 to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               September 30, 2004)

10.55    -     Voting Agreement, dated as of November 12, 2004, by and among
               Columbia Space (QP), Inc., et al (incorporated by reference to
               Exhibit 10.55 to the Company's Registration Statement on Form
               S-1/A filed on February 14, 2005)

10.56    -     Consent Agreement, dated January 27, 2005, by and among Columbia
               Space (QP), Inc., et al(incorporated by reference to Exhibit
               10.56 to the Company's Registration Statement on Form S-1/A filed
               on February 14, 2005)

10.57    -     Merger Agreement, dated as of February 9, 2005, by and among
               Motient Corporation, Telcom Satellite Ventures Inc., et
               al(incorporated by reference to Exhibit 10.57 to the Company's
               Registration Statement on Form S-1/A filed on February 14, 2005)

10.58    -     Form of Stock Purchase Agreement, dated February 9, 2005
               (incorporated by reference to Exhibit 10.58 to the Company's
               Registration Statement on Form S-1/A filed on February 14, 2005)

10.59    -     Registration Rights Agreement, dated February 9, 2005 by and
               among Motient Corporation, Telcom Satellite Ventures Inc., et al
               (incorporated by reference to Exhibit 10.59 to the Company's
               Registration Statement on Form S-1/A filed on February 14, 2005)


                                       94
<PAGE>


10.60    -     Form of Warrant to purchase Motient common stock, dated February
               9, 2005 (incorporated by reference to Exhibit 10.60 to the
               Company's Registration Statement on Form S-1/A filed on February
               14, 2005)

10.61    -     Form of Stockholder's Agreement, dated February 9, 2005
               (incorporated by reference to Exhibit 10.61 to the Company's
               Registration Statement on Form S-1/A filed on February 14, 2005)

21.1     -     Subsidiaries of the Company (filed herewith).

23.1     -     Consent of Friedman LLP, Independent Registered Public
               Accounting Firm (filed herewith)

23.2     -     Consent of Ernst & Young LLP, Independent Auditors (filed
               herewith)

31.1     -     Certification Pursuant to Rule 13a-14(a)/15d-14(a), of the
               Executive Vice President, Chief Operating Officer and Treasurer
               (principal executive officer).

31.2     -     Certification Pursuant to Rule 13a-14(a)/15d-14(a), of the
               Controller and Chief Accounting Officer (principal financial
               officer)

32       -     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
               Executive Vice President, Chief Operating Officer and Treasurer
               (principal executive officer) and Controller and Chief Accounting
               Officer (principal financial officer)

         ----------------------------------


         *     Management contract or compensatory plan or arrangement
               required to be filed as an exhibit to this report pursuant to
               Item 14(c) of this report.

                                       95
<PAGE>




                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                               MOTIENT CORPORATION


                               By      /s/ Christopher W. Downie
                                       -----------------------------------
                                       Christopher W. Downie
                                       Executive Vice President
                                       Chief Operating Officer and Treasurer

                               Date:   March 30, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

<TABLE>
<S>                                     <C>                                               <C>
/s/ Christopher W. Downie               Executive Vice President, Chief Operating         March 30, 2005
----------------------------------      Officer and Treasurer (principal executive
Christopher W. Downie                   officer)


/s/ Myrna J. Newman                     Controller and Chief Accounting Officer           March 30, 2005
----------------------------------      (principal financial officer)
Myrna J. Newman

/s/ Steven G. Singer                    Chairman of the Board                             March 30, 2005
----------------------------------
Steven G. Singer

/s/ Jonelle St. John                    Director                                          March 30, 2005
----------------------------------
Jonelle St. John

/s/ Gerald S. Kittner                   Director                                          March 30, 2005
----------------------------------
Gerald S. Kittner

/s/ James D. Dondero                    Director                                          March 30, 2005
----------------------------------
James D. Dondero

/s/ Raymond L. Steele                   Director                                          March 30, 2005
----------------------------------
Raymond J. Steele

                                        Director
----------------------------------
Barry A. Williamson


</TABLE>


                                      96
<PAGE>



                          INDEX TO FINANCIAL STATEMENTS

                      MOTIENT CORPORATION AND SUBSIDIARIES

<TABLE>
<S>                                                                                                <C>
Report of Independent Registered Public Accounting Firm..........................................F-1

Consolidated Statements of Operations............................................................F-2

Consolidated Balance Sheets......................................................................F-3

Consolidated Statements of Changes in Stockholders' Equity (Deficit).............................F-4

Consolidated Statements of Cash Flows............................................................F-5

Notes to Consolidated Financial Statements.......................................................F-6

Quarterly Financial Data........................................................................F-43
</TABLE>






<PAGE>



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
Motient Corporation:

We have audited the accompanying consolidated balance sheets of Motient
Corporation and Subsidiaries (the "Company") as of December 31, 2004 and 2003
(Successor Company), and the related consolidated statements of operations,
changes in stockholders' equity (deficit) and cash flows for the years ended
December 31, 2004 and 2003 (Successor Company), the eight months ended December
31, 2002 (Successor Company), and the four months ended April 30, 2002
(Predecessor Company). Our audits also included the financial statement schedule
listed in the index at Item 15(2). These financial statements and schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedule based on our
audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Motient Corporation
and Subsidiaries as of December 31, 2004 and 2003 (Successor Company) and the
results of their operations and their cash flows for the years ended December
31, 2004 and 2003 (Successor Company), the eight months ended December 31, 2002
(Successor Company), and the four months ended April 30, 2002 (Predecessor
Company), in conformity with U.S. generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, present fairly
in all material respects the information set forth therein.


/s/ Friedman LLP
----------------

East Hanover, New Jersey
March 30, 2005




                                      F-1
<PAGE>

                      Motient Corporation and Subsidiaries
                      Consolidated Statements of Operations
     For the Years Ended December 31, 2004 and 2003, the Eight Months Ended
           December 31, 2002, and the Four Months Ended April 30, 2002
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                                                   Predecessor
                                                                            Successor Company                        Company
                                                                            -----------------                        -------

                                                                                                 Eight Months      Four Months
                                                                 Year Ended       Year Ended        Ended             Ended
                                                                December 31,     December 31,    December 31,        April 30,
                                                                    2004             2003            2002              2002
                                                                    ----             ----            ----              ----
<S>                                                              <C>              <C>              <C>              <C>
REVENUES
  Services and related revenues                                  $  32,378        $  49,275        $  35,501        $  16,809
  Sales of equipment                                                 4,502            5,210            1,116            5,564
                                                                 ---------        ---------        ---------        ---------
       Total revenues                                               36,880           54,485           36,617           22,373
                                                                 ---------        ---------        ---------        ---------

COSTS AND EXPENSES
  Cost of services and operations (including
  stock-based compensation of $4,401 and $211
  for the years ended December 31, 2004 and 2003;
  exclusive of depreciation and amortization below)                 39,586           51,393           38,141           21,909
  Cost of equipment sold (exclusive of
  depreciation and amortization)                                     4,329            5,942            2,226            5,980
  Sales and advertising (including stock-based
  compensation of $372 and $151 for the years
  ended December 31, 2004 and 2003)                                  1,879            4,552            4,825            4,287
  General and administrative (including
  stock-based compensation of $5,370 and
  $241 for the years ended December 31, 2004 and 2003)              13,223           11,299            9,691            4,130
  Restructuring charges                                              6,264               --               25              584
  Depreciation and amortization                                     15,564           21,466           15,509            6,913
  Loss on disposal of assets                                         2,669            3,037            2,116              591
  Loss on impairment of assets                                         755            5,535               --               --
  Gain on sale of transportation and satellite assets                   --               --             (385)            (372)
  Gain on debt and capital lease retirement                           (802)              --               --               --
                                                                 ---------        ---------        ---------        ---------
  Total Costs and Expenses                                          83,467          103,224           72,148           44,022
                                                                 =========        =========        =========        =========

       Operating loss                                              (46,587)         (48,739)         (35,531)         (21,649)

  Interest and other income (expense)                                  343              662              (89)             145
  Write-off of deferred financing costs                            (12,035)              --               --               --
  Interest expense                                                  (4,106)          (6,365)          (1,910)          (1,850)
  Other income from Aether/MSV                                       1,953            2,203            1,017            1,125
  Equity in losses of MSV                                          (11,897)          (9,883)         (22,273)          (1,909)
                                                                 ---------        ---------        ---------        ---------
  Loss before reorganization items                                 (72,329)         (62,122)         (58,786)         (24,138)

  Reorganization items:
  Costs associated with debt restructuring                              --               --             (772)         (22,324)
  Gain  on extinguishment of debt                                       --               --               --          183,725
  Gain on fair market adjustment of assets/liabilities                  --               --               --           94,715
                                                                 ---------        ---------        ---------        ---------
  (Loss) income before income taxes                                (72,329)         (62,122)         (59,558)         231,978
  Income tax provision                                                  --               --               --               --
                                                                 ---------        ---------        ---------        ---------
  Net (loss) income                                              $ (72,329)       $ (62,122)       $ (59,558)       $ 231,978
                                                                 =========        =========        =========        =========

  Net (loss) income - basic and diluted                          $   (2.21)       $   (2.47)       $   (2.37)       $    3.98
                                                                 =========        =========        =========        =========


  Weighted-Average Common Shares Outstanding -                      32,771           25,145           25,097           58,251
  basic and diluted

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                      F-2
<PAGE>

                      Motient Corporation and Subsidiaries
                           Consolidated Balance Sheets
                        as of December 31, 2004 and 2003
                 (in thousands, except share and per share data)


<TABLE>
<CAPTION>
                                                                                                2004              2003
                                                                                                ----              ----

<S>                                                                                          <C>                <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                                                 $  16,945          $   3,618
   Accounts receivable-trade, net of allowance for doubtful accounts of $256
   and $759 at December 31, 2004 and 2003                                                        1,917              3,804
   Inventory                                                                                        75                240
   Due from Mobile Satellite Ventures LP, net                                                        5                 93
   Assets held for sale                                                                            261              2,734
   Deferred equipment costs                                                                        874              3,765
   Other current assets                                                                          1,348              5,091
   Restricted cash and short-term investments                                                       --                504
                                                                                             ---------          ---------
      Total current assets                                                                      21,425             19,849
                                                                                             ---------          ---------

RESTRICTED INVESTMENTS                                                                              76              1,091
PROPERTY AND EQUIPMENT, net                                                                     17,261             31,381
FCC LICENSES AND OTHER INTANGIBLES, net                                                         67,649             74,021
INVESTMENT IN AND NOTES RECEIVABLE FROM MSV                                                    141,635             22,610
DEFERRED CHARGES AND OTHER ASSETS                                                                   34              8,076
                                                                                             ---------          ---------
      Total assets                                                                           $ 248,080          $ 157,028
                                                                                             =========          =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable and accrued expenses                                                     $   6,327          $  12,365
   Deferred equipment revenue                                                                      933              3,795
   Deferred revenue and other current liabilities                                                5,414             11,005
   Obligations under capital leases, current                                                        --              1,454
   Vendor financing commitment, current                                                             --              2,413
                                                                                             ---------          ---------
      Total current liabilities                                                                 12,674             31,032
                                                                                             ---------          ---------
LONG-TERM LIABILITIES:
   Notes payable, including accrued interest thereon                                                --             22,885
   Term Credit Facility                                                                             --              4,914
   Capital lease obligations, net of current portion                                                --              1,642
   Vendor financing commitment, net of current portion                                              --              2,401
   Other long-term liabilities                                                                     675              1,347
                                                                                             ---------          ---------
      Total long-term liabilities                                                                  675             33,189
                                                                                             ---------          ---------
      Total liabilities                                                                         13,349             64,221
                                                                                             ---------          ---------
COMMITMENTS AND CONTINGENCIES                                                                       --                 --

STOCKHOLDERS' EQUITY:
Preferred Stock; par value $0.01; authorized 5,000,000 shares and no shares
outstanding at December 31, 2004 and 2003                                                           --                 --
Common Stock; voting, par value $0.01; authorized 100,000,000 shares;
51,544,596 and 25,196,840 shares issued and outstanding at December 31, 2004
and 2003, respectively                                                                             516                252
Additional paid-in capital                                                                     399,635            198,743
Common stock purchase warrants                                                                  28,589             15,492
Accumulated deficit                                                                           (194,009)          (121,680)
                                                                                             ---------          ---------
STOCKHOLDERS' EQUITY                                                                           234,731             92,807
                                                                                             ---------          ---------
Total liabilities, and stockholders' equity                                                  $ 248,080          $ 157,028
                                                                                             =========          =========

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                      F-3
<PAGE>


                      Motient Corporation and Subsidiaries
      Consolidated Statements of Changes In Stockholders' Equity (Deficit)
     For the Years Ended December 31, 2004 and 2003, the Eight Months Ended
          December 31, 2002, and the Four Months Ended April 30, 2002

<TABLE>
<CAPTION>
                                                                                                    Common
                                                             Common Stock    Additional Deferred    Stock
                                                                        Par   Paid-In    Stock     Purchase  Accumulated
                                                            Shares     Value  Capital Compensation Warrants    Deficit       Total
                                                            ------     -----  ------- ------------ --------    -------       -----
<S>                                                       <C>          <C>  <C>         <C>      <C>        <C>            <C>
Predecessor Company
-------------------
BALANCE, December 31, 2001                                55,717,257  $557  $ 988,355   $  (433) $ 93,730   $(1,313,358)  $(231,149)
  Common Stock issued under the 401(k) Savings &
  Stock Purchase Plan                                      2,718,041    27        176        --        --            --         203
  Change in deferred compensation on non-cash
  compensation                                                    --    --         --        97        --            --          97
  Net Income - Predecessor Company                                --    --         --        --        --       231,978     231,978
                                                          ----------  ----  ---------   -------  --------   -----------   ---------
  Balance before fresh-start-Predecessor Company          58,435,298  $584  $ 988,531   $  (336) $ 93,730   $(1,081,380)  $   1,129
                                                          ==========  ====  =========   =======  ========   ===========   =========

Successor Company
-----------------
  Issuance of New Equity through bankruptcy               25,097,256  $251  $ 197,814   $    --  $     --   $        --   $ 198,065
  Issuance of Common Stock Warrants                               --    --         --        --     3,077            --       3,077
                                                          ----------  ----  ---------   -------  --------   -----------   ---------
BALANCE, April 30, 2002                                   25,097,256   251    197,814        --     3,077            --     201,142
  Issuance of Common Stock Warrants                               --    --         --        --     1,464            --       1,464
  Net Loss                                                        --    --         --        --        --       (59,558)    (59,558)
                                                          ----------  ----  ---------   -------  --------   -----------   ---------
BALANCE, December 31, 2002                                25,097,256   251    197,814        --     4,541       (59,558)    143,048
  Common Stock issued under the 401(k) Savings &
  Stock Purchase Plan                                         84,172     1        280        --        --            --         281
  Common Stock issued for exercise of stock options           15,412    --         46        --        --            --          46
  Issuance of Common Stock Warrants                               --    --         --        --    10,951            --      10,951
  Compensatory  stock options issued to employees and
  consultants                                                     --    --        603        --        --            --         603
  Net loss                                                        --    --         --        --        --       (62,122)    (62,122)
                                                          ----------  ----  ---------   -------  --------   -----------   ---------
BALANCE, December 31, 2003                                25,196,840   252    198,743        --    15,492      (121,680)     92,807
  Common Stock issued under the 401(k) Savings &
  Stock Purchase Plan                                         38,276     2        192        --        --            --         194

Sales of Common Stock, Net of Expenses                    23,084,640   231    159,730        --    17,829            --     177,790
  Common Stock issued for exercise of stock options          630,685     6      2,032        --        --            --       2,038
  Issuance of Common Stock Warrants                               --    --         --        --     8,844            --       8,844
  Common Stock issued for exercise/expiration of
  common stock purchase warrants                           2,594,155    25     20,802        --   (13,576)           --       7,251

  Compensatory stock options issued to employees and
  consultants                                                     --    --     10,143        --        --            --      10,143
  Capital gain in connection with sale of stock by MSV            --    --      7,993        --        --            --       7,993
  Net loss                                                        --    --         --        --        --       (72,329)    (72,329)
                                                          ----------  ----  ---------   -------  --------   -----------   ---------
BALANCE, December 31, 2004                                51,544,596  $516  $ 399,635   $    --  $ 28,589   $  (194,009)  $ 234,731
                                                          ==========  ====  =========   =======  ========   ===========   =========


The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                      F-4
<PAGE>


                      Motient Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows
     For the Years Ended December 31, 2004 and 2003, the Eight Months Ended
          December 31, 2002, and the Four Months Ended April 30, 2002
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                                                     Predecessor
                                                                                      Successor Company                Company
                                                                                      -----------------                -------

                                                                                                                        Four
                                                                                                      Eight Months     Months
                                                                         Year Ended     Year Ended       Ended         Ended
                                                                         December 31,  December 31,   December 31,    April 30,
                                                                            2004           2003           2002          2002
                                                                            ----           ----           ----          ----
<S>                                                                      <C>            <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income                                                        $ (72,329)     $ (62,122)     $ (59,558)     $ 231,978
Adjustments to reconcile net (loss) income to net cash (used in)
operating activities:
    Amortization of Guarantee Warrants and debt related costs                   --             --             --          5,629
    Depreciation and amortization                                           15,564         21,466         15,509          6,913
    Equity in losses of MSV                                                 11,897          9,883         22,319          1,909
    Restructuring charges, fixed asset disposals                             2,801             --             --             --
    Loss on disposal of assets                                               2,669          8,572          2,116            591
    (Gain) on sale of transportation assets                                     --             --           (385)          (372)
    (Gain) loss on extinguishment of debt                                     (802)            --             --       (183,725)
    Gain on debt restructuring                                                  --           (573)            --             --
    Impairment of assets                                                       755             --             --             --
    Writeoff of deferred financing  costs                                   12,035             --             --             --
    Issuance of warrants                                                        --            927             --             --
    Fresh-Start valuation and other non-cash adjustments                        --             --             --        (94,715)
    Non cash amortization of deferred financing costs                        2,485          3,292             --             --
    Non cash 401(k) match                                                      192             --             --             --
    Stock based compensation expense                                        10,143            603             --             --
    Changes in assets and liabilities, net of acquisitions
    and dispositions:
    Accounts receivable - trade                                              1,887          5,535            782          1,370
    Inventory                                                                  165            837          2,765         (2,167)
    Other current assets                                                     4,506            (80)         4,263         15,833
    Accounts payable and accrued expenses                                   (5,610)          (255)          (217)         7,619
    Accrued interest                                                         1,523          2,510          1,193          1,320
    Deferred revenue and other current liabilities                          (6,235)         2,285          2,305         (6,729)
                                                                         ---------      ---------      ---------      ---------
    Net cash (used in) operating activities                                (18,354)        (7,120)        (8,908)       (14,546)
                                                                         ---------      ---------      ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of property & equipment                                  60             --             --             --
    Proceeds from sale of FCC licenses                                       2,045          6,116            616             --
    Proceeds from sale of transportation assets                                 --             --            385            372
    Proceeds (purchase) of restricted investments                            1,519           (991)          (604)            --
    Investment in MSV                                                     (125,000)            --           (957)            --
    Proceeds from MSV note                                                   2,071             --             --             --
    Additions to property and equipment                                     (1,357)          (232)          (613)          (494)
                                                                         ---------      ---------      ---------      ---------
    Net cash (used in) provided by investing activities                   (120,662)         4,893         (1,173)          (122)
                                                                         ---------      ---------      ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of equity securities                            192,024             --             --             17
    Stock issuance costs and other charges                                  (6,974)            --             --             --
    Principal payments under capital leases                                 (2,605)        (2,986)        (1,425)        (1,273)
    Principal payments under vendor financing                               (2,645)        (1,020)            --             --
    Repayment of Term Credit Facility                                       (6,899)            --             --             --
    Repayments of notes payable                                            (23,990)            --             --             --
    Proceeds from Term Credit Facility                                       1,500          4,500             --             --
    Proceeds from issuance of employee stock options                         2,032             47             --             --
    Debt issuance costs and other charges                                     (100)          (536)          (117)            --
                                                                         ---------      ---------      ---------      ---------
    Net cash provided by (used in) financing activities                    152,343              5         (1,542)        (1,256)
                                                                         ---------      ---------      ---------      ---------
    Net  increase (decrease) in cash and cash equivalents                   13,327         (2,222)       (11,623)       (15,924)
                                                                         ---------      ---------      ---------      ---------
CASH AND CASH EQUIVALENTS, beginning of period                               3,618          5,840         17,463         33,387
CASH AND CASH EQUIVALENTS, end of period                                 $  16,945      $   3,618      $   5,840      $  17,463
                                                                         =========      =========      =========      =========

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                      F-5
<PAGE>


                      MOTIENT CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


1.  ORGANIZATION

Motient Corporation (with its subsidiaries, "Motient" or the "Company") provides
two-way, wireless mobile data services and wireless internet services. Motient
allows its customers access to multiple communications networks for a variety of
wireless data communications services, including email messaging and other
services that enable businesses, mobile workers and machines to transfer
electronic information and messages and access corporate databases and the
internet.

In addition to selling wireless services that use its own terrestrial DataTac
network, it is also a reseller of airtime for data communications services on
the Cingular and Sprint wireless networks. These arrangements allow Motient to
provide integrated seamless solutions to its customers using a variety of
networks. In December 2004, Motient launched a new set of products and services
designed to provide these seamless solutions to our customers called iMotient
Solutions(TM). iMotient allows Motient's customers to use these multiple
networks via a single connection to Motient's back-office systems, providing a
one-source alternative for development, device management and billing across
multiple networks, including but not limited to GPRS, 1XRTT, and DataTac. The
Company considers the two-way mobile communications service described in this
paragraph to be its core wireless business.

Motient presently has six wholly-owned subsidiaries and a 49% interest in Mobile
Satellite Ventures LP (MSV). Motient Communications Inc., a wholly owned
subsidiary, owns the assets comprising Motient's core wireless business, except
for Motient's Federal Communications Commission, or FCC, licenses, which are
held in a separate subsidiary, Motient License Inc. Motient's other four
subsidiaries hold no material operating assets other than the stock of other
subsidiaries and Motient's interests in MSV.

For a discussion of certain significant recent developments and trends in
Motient's business after the end of the period covered by this report, please
see Note 21 ("Subsequent Events").

Mobile Satellite Ventures LP

On June 29, 2000, the Company formed a joint venture subsidiary, MSV, with
certain other parties, in which it owned 80% of the membership interests.
Through November 2001, MSV used the Company's satellite network to conduct
research and development activities. The remaining 20% interests in MSV were
owned by three investors unrelated to Motient. The minority investors had
certain participating rights which provided for their participation in certain
major business decisions that were made in the normal course of business;
therefore, in accordance with EITF No 96-16, "Investor's Accounting for an
Investee When the Investor Has a Majority of the Voting Interest but the
Minority Shareholder or Shareholders Have Certain Approval or Veto Rights", the
Company's investment in MSV has been recorded for all periods presented in the
consolidated financial statements pursuant to the equity method of accounting.

                                      F-6
<PAGE>

On November 12, 2004, Motient acquired approximately 5.4 million MSV limited
partnership units, and a corresponding number of shares in MSV's general
partner, Mobile Satellite Ventures GP Inc. ("MSV GP"). These units consist of
4.2 million units purchased for $125 million in cash and 1.2 million units
received in exchange for the cancellation of our $15 million principal note (and
all accrued interest thereon) issued by MSV and the conversion of $3.5 million
of convertible notes issued by MSV (including the cancellation of the accrued
interest on such convertible notes). In connection with our investment, the
other limited partners of MSV exchanged their outstanding notes (but not
generally the accrued interest thereon), and one limited partner contributed an
additional $20 million of cash, for limited partnership units and a
corresponding number of MSV GP shares.

As a result of MSV's capital transactions in 2004, Motient recorded a change of
interest loss of $3.1 million directly to shareholder's equity in accordance
with Staff Accounting Bulletin No. 51 "Accounting for Sales of Stock of a
Subsidiary" as our ownership interest decreased from 48% to 30%, prior to our
additional $125 million investment, in MSV.

As of December 31, 2003 and 2004, Motient held a 29.5% (assuming conversion of
all outstanding convertible notes) and 38.6% interest, respectively, in MSV. As
of March 1, 2005, Motient's direct and indirect interest in MSV is 49%. Please
see Note 21 ("Subsequent Events"). For additional information regarding MSV,
please see the financial statements of MSV beginning on page M-1.

2.  SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Reorganization

The consolidated financial statements included herein include the accounts of
the Company and its wholly and majority owned subsidiaries. In accordance with
the American Institute of Certified Public Accountants Statement of Position
90-7. Financial Reporting by Entities in Reorganization under the Bankruptcy
Code, the Company adopted fresh-start accounting as of May 1, 2002, and the
Company's emergence from Chapter 11 resulted in a new reporting entity. The
periods as of and prior to May 1, 2002, have been designated "Predecessor
Company" and the periods subsequent to May 1, 2002 have been designated as
"Successor Company." Under fresh-start accounting, the reorganization equity
value of the company was allocated to the assets and liabilities based on their
respective fair values and was in conformity with SFAS No. 141 "Business
Combinations." As a result of the implementation of fresh-start accounting, the
financial statements of the Company after the effective date are not comparable
to the Company's financial statements for prior periods. All intercompany
accounts and transactions have been eliminated. See Note 20, for additional
information about our emergence from bankruptcy and fresh-start accounting.

The results of MSV have been accounted for pursuant to the equity of accounting.



                                      F-7
<PAGE>


Accounting Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles ("GAAP") requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The Company's most significant estimates relate to the valuation of
its net assets and liabilities in "fresh-start" accounting, the valuation on its
investment in MSV, the allowance for doubtful accounts receivable, the valuation
of deferred tax assets and the ability to realize long-lived assets.

Cash Equivalents

The Company considers highly liquid investments with original or remaining
maturities at the time of purchase of three months or less to be cash
equivalents.

Restricted Investments

The Company had $0.8 million and $1.6 million of restricted investments at
December 31, 2004 and 2003, respectively. The restricted investments included
securities that were classified as held-to-maturity under the provision of SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities". The
Company classified restricted investment amounts which would mature within one
year as current assets in the accompanying balance sheet. The Company accounted
for these investments at their amortized cost.

Allowance for Doubtful Accounts

The Company records an allowance for doubtful accounts based on historical
trends, customer knowledge, any known disputes, and the aging of accounts
receivable balance combined with management's estimate of future potential
recoverability, based on our knowledge of customer's financial condition.

Inventory

Inventory, which consists primarily of communication devices and accessories,
such as power supplies and documentation kits, is stated at the lower of cost or
market. Cost is determined using the weighted average cost method. The Company
periodically assesses the market value of its inventory, based on sales trends
and forecasts and technological changes and records a charge to current period
income when such factors indicate that a reduction to net realizable value is
appropriate. The Company considers both inventory on hand and inventory which it
has committed to purchase, if any.


                                      F-8
<PAGE>


Property and Equipment

Property and equipment additions are recorded at cost for the Successor Company
and adjusted for impairment, and includes "fresh-start" adjustments and
depreciated over their useful life using the straight-line method. All
identifiable assets recognized in accordance with "fresh-start" accounting were
recorded at the effective date based upon independent appraisal. Assets recorded
as capital leases are amortized over the shorter of their useful lives or the
term of the lease. The estimated useful lives of office furniture and equipment
vary from two to ten years, and the network equipment is depreciated over seven
years. The Company has also capitalized certain costs to develop and implement
its computerized billing system. These costs are included in property and
equipment and are depreciated over three years. Repairs and maintenance do not
significantly increase the utility or useful life of an asset and are expensed
as incurred.

Software Development Costs

The Company capitalized certain costs valued in connection with developing or
obtaining internal use software in accordance with American Institute of
Certified Public Accountants Statement of Position 98-1. "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use." As of
December 31, 2004 and 2003, net capitalized internal use software costs were
$0.3 million and $1.3 million, respectively, are included in property and
equipment in the accompanying consolidated balance sheets and are amortized on a
straight-line basis over three years.

Long-Lived Assets

We account for long-lived assets in accordance with SFAS No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets. Other long-term assets,
including property and equipment, and other intangibles, are amortized over
their expected lives, which are estimated by management. Management also makes
estimates of the impairment of long-term assets whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. If the actual useful life of a long-term asset is shorter than the
useful life estimated by us, the assets may be deemed to be impaired and,
accordingly, a write-down of the value of the assets or a shorter amortization
period may be required.

Investment in MSV and Notes Receivables from MSV

The Company uses the equity method of accounting for its investment in MSV. The
company considers whether the fair value of its investment has declined below
its carrying value whenever adverse events or circumstances indicate that the
recorded value may not be recoverable. If the Company considers such decline to
be other than temporary, a write down would be recorded to estimate fair value.


                                      F-9
<PAGE>


Deferred Taxes

The Company accounts for income taxes under the liability method as required in
SFAS No. 109, "Accounting for Income Taxes". Under the liability method,
deferred income taxes are recognized for the tax consequences of "temporary
differences" by applying enacted statutory tax laws and rates applicable to
future years to differences between the financial statement carrying amounts and
the tax bases of existing assets and liabilities. Under this method, the effect
on deferred taxes of a change in tax rates is recognized in income in the period
that includes the enactment date. A valuation reserve is established for
deferred tax assets if the realization of such benefits cannot be sufficiently
assured.

Fair Value of Financial Instruments

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," requires
disclosures of the fair value of certain financial instruments. The Company has
used available information to derive its estimates. However, because these
estimates are made as of a specific point in time, they are not necessarily
indicative of amounts the Company could realize currently. The use of different
assumptions or estimating methods may have a material effect on the estimated
fair value amounts. The carrying amount for cash and cash equivalents,
short-term investments, accounts receivable, non-trade receivables included in
other assets, accounts payable and accrued expenses, and deferred revenues
approximates their fair values. For debt issues that are not quoted on an
exchange, interest rates currently available to the Company for issuance of debt
with similar terms and remaining maturities are used to estimate fair value. The
fair value of the Company's equity investment in MSV was determined by an
independent third-party valuation performed in November 2003 as part of
Company's preparation of its December 31, 2002 financial statements. This same
valuation methodology was utilized to value the Company's equity interest in MSV
as of December 31, 2003. The fair value of the notes receivable from MSV
approximated its carrying value as of December 31, 2003. These notes receivable
were exchanged into equity of MSV as part of the Company's investment in MSV in
November 2004. Given the investment transaction by Motient into MSV in November
2004, the fair value of the Company's equity investment in MSV was determined by
the carrying amount of the Company's investment in MSV and adjusted for the
Company's change in ownership interest upon the conversion of the notes.

<TABLE>
<CAPTION>
                                                       As of December 31, 2004       As of December 31, 2003
                                                       -----------------------       -----------------------

                                                      Carrying                      Carrying
                                                       Amount       Fair Value       Amount       Fair Value
                                                       ------       ----------       ------       ----------
<S>                                                         <C>            <C>         <C>           <C>
(in thousands)
Assets:
Restricted investments                                      $75            $75         $1,595        $1,595
Investment in and notes receivable from MSV             141,635        141,635         22,610        31,294

Liabilities:
Rare Medium Note                                             $0             $0        $22,016       $22,016
CSFB Note                                                     0              0            869           869
Term Credit Facility                                          0              0          4,914         4,914
Vendor financing commitment                                   0              0          4,814         4,814
Capital leases                                                0              0         $3,096        $3,096
</TABLE>


                                      F-10
<PAGE>

Revenue Recognition

The Company generates revenue through equipment sales, airtime service
agreements and consulting services. In 2000, the Company adopted SAB No. 101,
which provides guidance on the recognition, presentation and disclosure of
revenue in financial statements. In certain circumstances, SAB No. 101 requires
the Company to defer the recognition of revenue and costs related to equipment
sold as part of a service agreement.

In December 2003, the Staff of the SEC issued SAB No. 104, "Revenue
Recognition", which supersedes SAB No. 101, "Revenue Recognition in Financial
Statements." SAB No. 104's primary purpose is to rescind accounting guidance
contained in SAB No. 101 related to multiple-element revenue arrangements and to
rescind the SEC's "Revenue Recognition in Financial Statements Frequently Asked
Questions and Answers" ("FAQ") issued with SAB No. 101. Selected portions of the
FAQ have been incorporated into SAB No. 104. The adoption of SAB No. 104 did not
have a material impact on the Company's revenue recognition policies.

Effective July 1, 2003, the Company adopted Emerging Issues Task Force (EITF)
No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables, which
is being applied on a prospective basis. The consensus addresses how to account
for arrangements that may involve the delivery or performance of multiple
products, services and/or rights to use assets. Revenue arrangements with
multiple deliverables are required to be divided into separate units of
accounting if the deliverables in the arrangement meet certain criteria.
Arrangement consideration must be allocated among the separate units of
accounting based on their relative fair values. The consensus also supersedes
certain guidance set forth in Securities and Exchange Commission (SEC) Staff
Accounting Bulletin Number 101, Revenue Recognition in Financial Statements (SAB
101). SAB 101 was amended in December 2003 by Staff Accounting Bulletin Number
104 (SAB 104).

Revenue is recognized as follows:

Service revenue: Revenues from the Company's wireless services are recognized
when the services are performed, evidence of an arrangement exists, the fee is
fixed and determinable and collectability is probable. Service discounts and
incentives are recorded as a reduction of revenue when granted, or ratably over
a contract period. The Company defers and amortizes any revenue and costs
associated with activation of a subscriber on the Company's network over an
estimated customer life of two years.

The Company packages airtime usage on its network that involves a wide variety
of volume packaging, anything from a 35 kilobytes per month plan up to unlimited
kilobyte usage per month, with various gradations in between. Discounts may be
applied when comparing one customer to another, and such service discounts are
recorded as a reduction of revenue when granted.

Service discounts and incentives are recorded as a reduction of revenue when
granted, or ratably over a contract period. The Company does not offer
incentives generally as part of its service offerings, however, if offered they
would be recorded as a reduction of revenue ratably over a contract period.

                                      F-11
<PAGE>

To date, the majority of the Company's business has been transacted with
telecommunications, field services, professional service and transportation
companies located throughout the United States. The Company grants credit based
on an evaluation of the customer's financial condition, generally without
requiring collateral or deposits. The Company establishes a valuation allowance
for doubtful accounts receivable for bad debt and other credit adjustments.
Valuation allowances for revenue credits are established through a charge to
revenue, while valuation allowances for bad debts are established through a
charge to general and administrative expenses. The Company assesses the adequacy
of these reserves quarterly, evaluating factors such as the length of time
individual receivables are past due, historical collection experience, the
economic environment and changes in credit worthiness of the Company's
customers. If circumstances related to specific customers change or economic
conditions worsen such that the Company's past collection experience and
assessments of the economic environment are no longer relevant, the Company's
estimate of the recoverability of its trade receivables could be further
reduced.

Equipment and service sales: The Company sells equipment to resellers who market
its terrestrial product and airtime service to the public. The Company also
sells its product directly to end-users. Revenue from the sale of the equipment,
as well as the cost of the equipment, are initially deferred and are recognized
over a period corresponding to the Company's estimate of customer life of two
years. Equipment costs are deferred only to the extent of deferred revenue.

As of December 31, 2004 and 2003, the Company had capitalized a total of $1.0
million and $4.5 million of deferred equipment revenue, respectively, and had
deferred equipment costs of $0.9 million and $4.3 million, respectively.

Advertising Costs

Advertising costs (inclusive of airtime commissions) are charged to operations
as incurred and totaled $4.0 million in 2004, $6.6 million in 2003, $4.3 million
for the eight months ended December 31, 2002 and $2.5 million for the four
months ended April 30, 2002.

Reorganization Items

Reorganization items relate to income recorded and expenses incurred as a direct
result of the filing and include professional fees, adjustments to caring value
of debt, and fresh-start accounting adjustments. Reorganization items are
separately identified on the Consolidated Statements of Operations.

Stock-Based Compensation

The Company accounts for stock options issued to non-employees, under Statement
of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation." The Company's issuance of employee stock options is accounted for
using the intrinsic value method under APB Opinion No. 25, Accounting for Stock
issued to Employees ("APB 25").

Statement of Financial Accounting Standards No. 123 "Accounting for Stock --
based Compensation," ("SFAS No. 123") as amended by Statement of Financial
Accounting Standards No. 148 "Accounting for Stock-Based Compensation --
Transition and Disclosure" requires the Company to provide pro forma information
regarding net earnings and earnings per common share as if compensation cost for


                                      F-12
<PAGE>

the Company's stock options had been determined in accordance with the fair
value based method prescribed in SFAS No. 123. The fair value of the options
granted in 2004, 2003 and 2002 were estimated by using the Black-Scholes pricing
model with the following assumptions: (i) expected life of the options of 10
years for 2003 and 2004 and 10 years for 2002, (ii) expected volatility in the
market price of the Company's common stock of 162-375% for 2004 and 148-162% and
173% for 2003 and 2002, (iii) no expected dividends, and (iv) a risk free
interest rate of .92-2.18%, .88-.93% and 1.71% in 2004, 2003 and 2002.

We have granted stock options to our employees at exercise prices equal to or
greater than the fair value of the shares at the date of grant and accounted for
these stock option grants in accordance with APB 25. Under APB 25, when stock
options are issued with an exercise price equal to the market price of the
underlying stock on the date of grant, no compensation expense is recognized in
the statement of operations. Because we recognized that APB 25 was in the
process of being rescinded, in 2004 we amended our stock option plan to provide
for the grants of restricted stock and other forms of equity compensation in
addition to stock options. In December 2004, APB 25 was replaced by Statement of
Financial Accounting Standards No. 123 (Revised) ("Statement 123(R)") which will
be effective for all accounting periods beginning after December 15, 2005. The
Company will adopt Statement 123(R) on January 1, 2006, and will be required to
recognize an expense for the fair value of its outstanding stock options. Under
Statement 123(R), The Company must determine the transition method to be used at
the date of adoption, the appropriate fair value model to be used for valuing
share-based payments and the amortization method for compensation cost. The
transition methods include prospective and retroactive adoption methods. Under
the retroactive method, prior periods may be restated either as of the
beginning of the year of adoption or for all periods presented. The prospective
option requires that compensation expense be recorded for all unvested stock
options and restricted stock at the beginning of the first quarter of adoption
of Statement 123(R), while the retroactive option would record compensation
expense for all unvested stock options and restricted stock beginning with the
first period restated. Both transition methods would require management to make
accounting estimates. The Company has not yet concluded which method it will
utilize, nor has it determined what the impact will be on its earnings per
share.

The following table illustrates the effect on income (loss) attributable to
common stockholders and earnings (loss) per share if the Company had applied the
fair value recognition provisions of SFAS No. 123 to stock-based employee
compensation.

                                      F-13
<PAGE>
<TABLE>
<CAPTION>
                                                                                                      Predecessor
                                                                    Successor Company                   Company
                                                                    -----------------                   -------

                                                                                           Eight
                                                            Year             Year          Months        Four Months
                                                            Ended            Ended         Ended           Ended
                                                         December 31,     December 31,  December 31,     April 30,
                                                             2004             2003         2002             2002
                                                             ----             ----         ----             ----
<S>                                                      <C>             <C>             <C>             <C>
Net loss, as reported                                    $ (71,964)      $ (62,122)      $ (59,558)      $ 231,978
Add: Stock-based employee compensation expense
included in net income, net of related tax effects          10,143             603              --              --
Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of tax related effects                  (6,726)         (2,488)           (567)            (57)
                                                         ---------       ---------       ---------       ---------
Pro forma net loss                                       $ (68,547)      $ (64,007)      $ (60,125)      $ 231,921

Weighted average common shares outstanding                  32,771          25,145          25,097          58,251
Earnings per share:
  Basic and diluted--as reported                         $   (2.20)      $   (2.47)      $   (2.37)      $    3.98
  Basic and diluted--pro-forma                           $   (2.09)      $   (2.55)      $   (2.40)      $    3.98
</TABLE>


Under SFAS No. 123 the fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions:

<TABLE>
<CAPTION>
                                                                                                  Predecessor
                                                                 Successor Company                  Company
                                                                 -----------------                  -------

                                                                                      Eight
                                                                                      Months      Four Months
                                                      Year Ended     Year Ended       Ended          Ended
                                                     December 31,   December 31,    December 31,   April 30,
                                                         2004           2003           2002          2002
                                                         ----           ----           ----          ----
<S>                                                         <C>            <C>            <C>            <C>
                    Expected life (in years)              10             10            10             10
                    Risk-free interest rate          0.92% - 2.18%  0.88% - 0.93%     1.71%          1.71%
                    Volatility                        162% - 375%    148% - 162%      173%           197%
                    Dividend yield                       0.0%           0.0%          0.0%           0.0%
</TABLE>


Segment Reporting

In June 1997, the FASB issued Statement No. 131. SFAS No. 131 establishes annual
and interim reporting standards for operating segments of a company. It also
requires entity wide disclosures about the products and services an entity
provides, the material countries in which it holds assets and reports revenues,
and its major customers. We are not organized by multiple operating segments for
the purpose of making operating decisions or assessing performance. Accordingly,
we operate as one operating segment and report applicable enterprise-wide
disclosures.

The Company has one operating segment: its core wireless business. The Company
provides its core wireless business to the continental United States, Alaska and
Hawaii. The following summarizes the Company's core wireless business revenue by
major market categories:


                                      F-14
<PAGE>
<TABLE>
<CAPTION>
                                                                             Predecessor
                                           Successor Company                   Company
                                           -----------------                   -------

                                  Year           Year        Eight Months    Four Months
                                  Ended          Ended          Ended           Ended
Summary of Revenue            December 31,   December 31,    December 31,     April 30,
(in millions)                     2004           2003            2002            2002
                                  ----           ----            ----            ----
<S>                               <C>            <C>            <C>              <C>
Wireless Internet                 $18.3          $27.8          $15.5            $5.6
Field Services                      5.6            9.9           10.5             5.6
Transportation                      3.3            7.9            7.4             4.1
Telemetry                           2.3            2.3            1.8             0.8
All other                           2.9            1.4            0.3             0.7
                                   ----           ----           ----            ----
Service Revenue                    32.4           49.3           35.5            16.8
Equipment Revenue                   4.5            5.2            1.1             5.6
                                  -----          -----          -----           -----
    Total                         $36.9          $54.5          $36.6           $22.4
                                  =====          =====          =====           =====
</TABLE>


The Company does not measure ultimate income or loss or track its assets by
these market categories.

Loss per share

Basic earnings per share is computed by dividing net income available to common
shareholders by the weighted-average number of common shares outstanding during
the accounting period. Diluted EPS reflects the potential increase in
outstanding shares that could result from exercising in-the-money stock options
plus the estimated number of non-vested restricted shares.

Options and warrants to purchase shares of common stock were not included in the
computation of loss per share as the effect would be antidilutive for the years
ended December 31, 2004 and 2003 and for the four and eight months ended April
30, 2002 and December 31, 2002, respectively. As a result, the basic and diluted
earnings per share amounts for all periods presented are the same. As of
December 31, 2004, there were warrants to acquire 4,594,327 shares of common
stock and options outstanding for 605,727 shares that were not included in this
calculation because of their anti-dilutive effect. As of December 31, 2003,
there were warrants to acquire approximately 5,664,962 shares of common stock
and 1,757,513 options outstanding that were not included in this calculation
because of their antidilutive effect. As of December 31, 2002, there were
warrants to acquire approximately 2,339,962 shares of common stock and 1,631,025
options outstanding that were not included in this calculation because of their
antidilutive effect. For the four months ended April 30, 2002, no options or
warrants had exercise prices in excess of the fair market value of the Company's
common stock and thus were not factored into the per share calculation.



                                      F-15
<PAGE>

Reclassification

We have reclassified some prior period amounts to conform to our current year
presentation.

Concentrations of Credit Risk and Major Customers

Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of cash, short term investments, and accounts
receivable. The Company periodically invests its cash balances in temporary or
overnight investments. The Company's short term investments included debt
securities such as commercial paper, time deposits, certificates of deposit,
banker acceptances, and marketable direct obligations of the United States
Treasury. At December 31, 2004, the Company had approximately $16.7 million of
cash deposits in excess of amounts insured by the Federal Deposit Insurance
Corporation.

To date, the majority of the Company's business has been transacted with
telecommunications, field services, professional service and transportation
companies located throughout the United States. The Company grants credit based
on an evaluation of the customer's financial condition, generally without
requiring collateral or deposits. Exposure to losses on trade accounts
receivable, for both service and for equipment sales, is principally dependent
on each customer's financial condition.

For the year ended December 31, 2004, five customers accounted for approximately
43% of the Company's service revenue, with one customer, SkyTel, accounting for
more than 22% of the Company's service revenue. As of December 31, 2004, one
customer, RIM, accounted for more than 14% of our net accounts receivable. No
other single customer accounted for more than 10% of our net accounts
receivable.

For the year ended December 31, 2003, five customers accounted for approximately
47% of the Company's service revenue, with two of those customers, SkyTel and
UPS, each accounting for more than 11% of the Company's service revenue. As of
December 31, 2003, no single customer accounted for more than 6% of the
Company's net accounts receivable.

For the four months ended April 30, 2002 and the eight months ended December 31,
2002, SkyTel and UPS accounted for 11% and 16%, respectively, and 15% and 18%,
respectively, of the Company's service revenue.

The revenue attributable to such customers varies with the level of network
airtime usage consumed by such customers, and none of the service contracts with
such customers requires that the customers use any specified quantity of network
airtime, nor do such contracts specify any minimum level of revenue. There can
be no assurance that the revenue generated from these customers will continue in
future periods.


                                      F-16
<PAGE>


Recent Accounting Pronouncements

In October 2004, the FASB ratified EITF 04-8, "Accounting Issues Related to
Certain Features of Contingently Convertible Debt and the Effect on Diluted
Earnings Per Share." The new rules require companies to include shares issuable
upon conversion of contingently convertible debt in their diluted earnings per
share (EPS) calculations regardless of whether the debt has a market price
trigger that is above the current fair market value of the company's common
stock that makes the debt currently not convertible. The new rules are effective
for reporting periods ending on or after December 15, 2004. At December 31,
2004, Motient had no contingently convertible debt.

In January 2003, the FASB issued FASB Interpretation ("FIN") No. 46,
"Consolidation of Variable Interest Entities". In December 2003, the FASB issued
FIN No. 46 (Revised) ("FIN 46-R") to address certain FIN 46 implementation
issues. This interpretation requires that the assets, liabilities, and results
of activities of a Variable Interest Entity ("VIE") be consolidated into the
financial statements of the enterprise that has a controlling interest in the
VIE. FIN 46-R also requires additional disclosures by primary beneficiaries and
other significant variable interest holders. For entities acquired or created
before February 1, 2003, this interpretation is effective no later than the end
of the first interim or reporting period ending after March 15, 2004, except for
those VIE's that are considered to be special purpose entities, for which the
effective date is no later than the end of the first interim or annual reporting
period ending after December 15, 2003.

For all entities that were acquired subsequent to January 31, 2003, this
interpretation is effective as of the first interim or annual period ending
after December 31, 2003. The adoption of the provisions of this interpretation
did not have a material effect on our financial condition or results of
operations.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". This standard amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts,
collectively referred to as derivatives, and for hedging activities under SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Relationships." SFAS
No. 149 is effective for contracts entered into or modified after June 30, 2003
and for hedging relationships after June 30, 2003. The adoption of this
statement did not have a material impact on our results of operations or
financial condition.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150
clarifies the accounting for certain financial instruments with characteristics
of both liabilities and equity and requires that those instruments be classified
as liabilities in statements of financial condition. Previously, many of those
financial instruments were classified as equity.


                                      F-17
<PAGE>


SFAS No. 150 is effective for financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. The adoption the provisions of
SFAS No. 150 did not have a material effect on our results of operations or
financial condition.

In December 2003, the SEC issued Staff Accounting Bulletin No. 104, "Revenue
Recognition" ("SAB 104"), which supersedes SAB 101, "Revenue Recognition in
Financial Statements." The primary purpose of SAB 104 is to rescind accounting
guidance contained in SAB 101 related to multiple element revenue arrangements,
which was superseded as a result of the issuance of EITF 00-21, "Accounting for
Revenue Arrangements with Multiple Deliverables." While the wording of SAB 104
has changed to reflect the issuance of EITF 00-21, the revenue recognition
principles of SAB 101 remain largely unchanged by the issuance of SAB 104. The
adoption of SAB 104 did not have a material impact on our financial statements.

In December 2004, the FASB issued SFAS No. 123 (Revised 2004) "Share-Based
Payment" ("SFAS No. 123R") that addresses the accounting for share-based payment
transactions in which a company receives employee services in exchange for (a)
equity instruments of the company or (b) liabilities that are based on the fair
value of the company's equity instruments or that may be settled by the issuance
of such equity instruments. SFAS No. 123R addresses all forms of share-based
payment awards, including shares issued under employee stock purchase plans,
stock options, restricted stock and stock appreciation rights. SFAS No. 123R
eliminates the ability to account for share-based compensation transactions
using APB Opinion No. 25, "Accounting for Stock Issued to Employees", that was
provided in Statement 123 as originally issued. Under SFAS No. 123R companies
are required to record compensation expense for all share based payment award
transactions measured at fair value. This statement is effective for quarters
ending after December 15, 2005. We have not yet determined the impact of
applying the various provisions of SFAS No. 123R.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets
-- An Amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions
(SFAS 153). SFAS 153 eliminates the exception from fair value measurement for
nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB
Opinion No. 29, Accounting for Nonmonetary Transactions, and replaces it with an
exception for exchanges that do not have commercial substance. SFAS 153
specifies that a nonmonetary exchange has commercial substance if the future
cash flows of the entity are expected to change significantly as a result of the
exchange. SFAS 153 is effective for the fiscal periods beginning after June 15,
2005 and is required to be adopted by the Company in the third quarter of 2005.
The Company is currently evaluating the effect that the adoption of SFAS 153
will have on its consolidated results of operations and financial condition but
does not expect it to have a material impact.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs: an amendment
of ARB No. 43, Chapter 4," to clarify the accounting for abnormal amounts of
idle facility expense, freight, handling costs and wasted material. SFAS No. 151
is effective for inventory costs incurred during fiscal years beginning after
June 15, 2005. We do not believe the provisions of SFAS No. 151, when applied,
will have an impact on our financial position or results of operations.


                                      F-18
<PAGE>

3. ASSETS HELD FOR SALE

On July 29, 2003, Motient Communications, entered into an asset purchase
agreement with Nextel, under which Motient Communications sold to Nextel certain
of its SMR licenses issued by the FCC for $3.4 million. The closing of this
transaction occurred on November 7, 2003. On December 9, 2003, Motient
Communications entered into a second asset purchase agreement, under which
Motient Communications sold additional licenses to Nextel for $2.75 million
resulting in a $1.5 million loss which was recorded in December 2003.

In February 2004, the Company closed the sale of licenses covering approximately
$2.2 million of the purchase price, and in April 2004, the Company closed the
sale of approximately one-half of the remaining licenses. The transfer of the
remaining licenses has been challenged at the FCC by a third-party. While the
Company believes, based on the advice of counsel, that the FCC will ultimately
rule in its favor, the Company cannot be assured that it will prevail, and in
any event, the timing of any final resolution is uncertain. None of these
licenses are necessary for Motient's future network requirements. The net
realizable value of these frequencies at December 31, 2004 and 2003 were
approximately, $0.26 million and $2.7 million respectively.

4. OTHER CURRENT ASSETS

Other current assets consist of the following:

                                                    December 31,
                                                    ------------
                                               2004            2003
                                               ----            ----
                                                  (in thousands)

Prepaid site rent                               $387          $3,416
Prepaid maintenance                               75             271
Prepaid expenses - other                         582             806
Deposits                                          68              10
Non-trade receivables and other                  236             588
                                              ------          ------
                                              $1,348          $5,091
                                              ======          ======


5.  PROPERTY AND EQUIPMENT

Property and equipment consists of the following:


                                                    December 31,
                                                    ------------
                                               2004            2003
                                               ----            ----
                                                  (in thousands)
Network equipment                            $30,598         $35,865
Office equipment                               2,838           2,846
                                               -----           -----
                                              33,436          38,711
Less accumulated depreciation and
amortization                                 (16,175)         (7,330)
                                             -------         -------
Property and equipment, net                  $17,261         $31,381
                                             =======         =======


                                      F-19
<PAGE>

Depreciation expense totaled $10,033, $13,770, $9,816 and $5,924 for the years
ended December 31, 2004 and 2003 and the eight months ended December 31, 2002
and the four months ended April 30, 2002, respectively.

The Company leases certain office equipment and switching equipment under
agreements accounted for as capital leases. Assets recorded as capital leases in
the accompanying balance sheets include the following:

                                                             December 31,
                                                             ------------
                                                          2004          2003
                                                          ----          ----
                                                            (in thousands)
       Switch equipment                                   $--           $9,795
       Office equipment                                    --               --
       Less accumulated depreciation                       --           (5,280)
                                                          ---           ------
          Total                                           $--           $4,515
                                                          ===           ======


6.  FCC LICENSES AND OTHER INTANGIBLE ASSETS

FCC licenses and other intangible assets consist of the following:

                                                             December 31,
                                                             ------------
                                                          2004          2003
                                                          ----          ----
                                                            (in thousands)
       FCC Licenses                                      $80,594       $80,594
       Customer contracts                                    349         1,893
                                                        --------       -------
                                                          80,943        82,487
       Less accumulated amortization                     (13,294)       (8,466)
                                                        --------       -------
       FCC licenses and other intangible assets, net     $67,649       $74,021
                                                         =======       =======

Amortization totaled $5,616, $7,696, $5,693 and $989 for the years ended
December 31, 2004 and 2003 and the eight months ended December 31, 2002 and the
four months ended April 30, 2002, respectively.

Motient accounts for its frequencies as finite-lived intangibles and amortizes
them over a 15-year estimated life. Motient amortizes customer contracts over a
three-year life.

We engaged a financial advisor to reevaluate the value of our customer-
contracts intangibles as of September 30, 2003 due primarily to the decline in
revenue from UPS in this time period. This valuation resulted in an impairment
of the customer-related intangibles of $5.5 million in the third quarter of
2003. We subsequently reevaluated the value of our customer-related intangibles
as of December 31, 2004 due primarily to the decline in revenue from our
wireless internet customer segment. This valuation resulted in an impairment of
the customer-related intangibles of $0.8 million in the fourth quarter of 2004.

                                      F-20
<PAGE>

The table below outlines Motient's amortization requirements for the five year
period from December 31, 2004.

<TABLE>
                                                       December 31,
                                       2005      2006         2007      2008       2009      Thereafter
                                       ----      ----         ----      ----       ----      ----------
<S>                                  <C>       <C>          <C>       <C>        <C>            <C>
FCC Licenses                         $4,985    $4,985       $4,985    $4,985     $4,985         $42,375
Customer contracts                      116       116          117       ---        ---             ---
</TABLE>


7. DEFERRED CHARGES AND OTHER ASSETS

Deferred charges and other assets consist of the following:

                                                     December 31,
                                                     ------------
                                                 2004          2003
                                                 ----          ----
                                                    (in thousands)
Deferred equipment costs                          $34         $  709
Term credit facility financing fees                --          7,367
                                                  ---         ------
                                                  $34         $8,076
                                                  ===         ======

Financing costs are amortized over the term of the related facility using the
straight-line method, which approximates the effective interest method. The term
credit facility expired on December 31, 2004.

Amortization of term credit facility financing fees, which are a component of
interest expense, for the years ended December 31, 2004 and 2003 totaled $2,485
and $3,292, respectively.

8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following

                                                     December 31,
                                                     ------------
                                                 2004          2003
                                                 ----          ----
                                                   (in thousands)
Accounts Payable Trade                        $ 1,900        $ 5,778
Accrued Site Rent                               1,512            806
Accrued Restructuring                           1,287             --
Accrued Operating and Other                     1,628          5,781
                                              =======        =======
                                              $ 6,327        $12,365
                                              =======        =======



                                      F-21
<PAGE>


9. DEFERRED REVENUE AND OTHER CURRENT LIABILITIES

Deferred revenue and other current liabilities consist of the following:

                                                    December 31,
                                                    ------------
                                                 2004          2003
                                                 ----          ----
                                                   (in thousands)
Deferred Revenue - UPS                        $4,025         $4,678
Deferred Revenue - Aether                        472          3,447
Deferred Revenue - RIM                           755          1,397
Deferred Registration fees                       153            175
Deposits - other                                  --            693
Deferred Revenue - other                           9            615
                                              ------        -------
                                              $5,414        $11,005
                                              ======        =======


See Note 11 - Commitments and contingencies for disclosure regarding deferred
revenue - UPS

10.  DEBT & CAPITAL LEASES

Debt and capital leases consists of the following:
<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                                 ------------
                                                                           2004               2003
                                                                           ----               ----
                                                                                (in thousands)
<S>                                                                        <C>             <C>
Rare Medium note payable, including accrued interest                       $--             $22,016
CSFB note payable, including accrued interest                               --                 869
Term Credit Facility                                                        --               4,914
Vendor financing, including accrued interest                                --               4,814
Capital leases                                                              --               3,096
                                                                           ---              ------
                                                                            --              35,709
Less current maturities                                                     --               3,867
                                                                           ---              ------
Long-term debt                                                             $--             $31,842
                                                                           ===             =======
</TABLE>


Term Credit Facility

On January 27, 2003, Motient Communications, closed a $12.5 million term credit
agreement with a group of lenders, including several of the Company's existing
stockholders. An indirect lender, Highland Capital Management holds 5% or more
of Motient's common stock. James D. Dondero, a director of Motient, is the
principal of Highland Capital Management. The lenders also included Gary Singer,
directly or through one or more entities. Gary Singer is the brother of Steven
G. Singer, one of Motient's directors.

On January 27, 2003, in connection with the signing of the credit agreement,
Motient issued warrants at closing to the lenders to purchase, in the aggregate,
3,125,000 shares of its common stock. The exercise price for these warrants is
$1.06 per share. The warrants were immediately exercisable upon issuance and


                                      F-22
<PAGE>

have a term of five years. The warrants were valued at $10 million using a
Black-Scholes pricing model and recorded as a debt discount, amortized as
additional interest expense over three years, the term of the related debt. Upon
closing of the credit agreement, the Company paid closing and commitment fees to
the lenders of $500,000. These fees were recorded on the Company's balance sheet
and amortized as additional interest expense over three years, the term of the
related debt. Under the credit agreement, the Company was required to pay an
annual commitment fee of 1.25% of the daily average of undrawn amounts of the
aggregate commitments from the period from the closing date to December 31,
2003. In December 2003, the Company paid the lenders a commitment fee of
approximately $113,000.

On March 16, 2004, Motient entered into an amendment to its credit facility,
which extended the borrowing availability period until December 31, 2004. On
March 16, 2004, in connection with the execution of the amendment to the credit
agreement, the Company issued warrants to the lenders to purchase, in the
aggregate, 2,000,000 shares of Motient's common stock. The number of warrants
was reduced to an aggregate of 1,000,000 shares of common stock since, within 60
days after March 16, 2004, as the Company obtained at least $7.5 million of
additional debt or equity financing. The exercise price of the warrants is $4.88
per share. The warrants were immediately exercisable upon issuance and have a
term of five years. The warrants were valued at $6.7 million using a
Black-Scholes pricing model and recorded as a debt discount and amortized as
additional interest expense over three years, the term of the related debt.
Motient registered the shares underlying the warrants in July 2004. The Company
also paid a commitment fee to the lenders of $320,000 which accrued into the
principal balance at closing. These fees were recorded on Motient's balance
sheet and amortized as additional interest expense over three years, the term of
the related debt.

In each of April, June and August 2003 and March of 2004, the Company made draws
under the credit agreement in the amount of $1.5 million for an aggregate amount
of $6.0 million, all of which was repaid in April 2004. Each of these
borrowings, along with any accrued and unpaid interest, respectively, would have
been due three years from the date of borrowing. The Company used such funds to
fund general working capital requirements of operations.

For the monthly periods ended April 2003 through December 2003, and in September
2004, the Company reported events of default under the terms of the credit
facility to the lenders. These events of default related to non-compliance with
covenants requiring minimum monthly revenue, earnings before interest, taxes and
depreciation and amortization and free cash flow performance. In each period,
the lenders waived these events of default.

On April 13, 2004, Motient repaid all principal amounts then owing under its
term credit facility, including accrued interest thereon, in an amount of $6.7
million. On December 31, 2004, borrowing availability under the facility
terminated. The company immediately expensed approximately $8.1 million of
deferred financing costs, in connection with the repayment as the Company's
availability to borrow under the term credit agreement was reduced to $5.9
million. On December 31, 2004, the March 16, 2004 amendment expired and the
Company immediately expensed the remainder of the approximately $3.9 million of
deferred financing costs.


                                      F-23
<PAGE>


Rare Medium Notes

Under the Company's Plan of Reorganization, it issued a note to Rare Medium in
the principal amount of $19.0 million in satisfaction of certain claims against
the Company. The note was issued by a new subsidiary of Motient Corporation that
owns 100% of Motient Ventures Holding Inc., which owns all of the Company's
interests in MSV. The new note had a term of three years and carried interest at
9%. The note allowed the Company to elect to accrue interest and add it to the
principal, instead of paying interest in cash. In July 2004, the Company repaid
all accrued principal and interest on this note, in the amount of $22.6 million.

CSFB Note

Under the Company's Plan of Reorganization, the Company issued a note to CSFB,
in satisfaction of certain claims by CSFB against Motient, in the principal
amount of $750,000. The new note was issued by a new subsidiary of Motient
Corporation that owns 100% of Motient Ventures Holding Inc., which owns all of
the Company's interests in MSV. The new note had a term of three years and
carried interest at 9%. The note allowed the Company to elect to accrue interest
and add it to the principal, instead of paying interest in cash. In July 2004,
the Company repaid all accrued principal and interest on this note, in the
amount of $0.9 million.

Motorola Vendor Financing

In June 1998, Motorola entered into an agreement with the Company to provide up
to $15 million of vendor financing, to finance up to 75% of the purchase price
of network base stations. Loans under this facility bore interest at a rate
equal to LIBOR plus 7.0% and were guaranteed by the Company and each subsidiary
of Motient Holdings. Advances made during a quarter constitute a loan, which was
then amortized on a quarterly basis over three years. As of December 31, 2003,
$4.8 million was outstanding, including accrued interest, under this facility at
an interest rate of 5.4%. In June 2004, the Company negotiated a settlement of
these obligations, paying a $2.0 million in cash and issuing a warrant to
Motorola to purchase 200,000 shares of the Company's common stock at a price of
$8.68, in full satisfaction of the outstanding balances.

Hewlett-Packard Capital Lease

The Company had a capital lease for network equipment with Hewlett-Packard. The
lease has an effective interest rate of 12.2%. This capital lease was in default
for non-payment at December 31, 2002, however, in January 2003, this agreement
was restructured to provide for a modified payment schedule. In June 2004, the
Company negotiated a settlement of the entire amounts under this lease, making a
cash payment of $1.9 million, and took title to all of the leased equipment and
software. Additionally, Hewlett-Packard released to the Company a $1.1 million
letter of credit that the Company had provided for the benefit of
Hewlett-Packard in 2003 to secure certain obligations under its lease.


                                      F-24
<PAGE>


11.  OTHER LONG-TERM LIABILITIES

Other long-term liabilities consist of the following:

                                                        -----------------
                                                           December 31,
                                                           ------------
                                                        2004         2003
                                                        ----         ----
                                                        (in thousands)
Deferred revenue, Aether, RIM, MSV and other            $606       $  622
Deferred equipment revenue                                69          725
                                                        ----       ------
                                                        $675       $1,347
                                                        ====       ======

12.  STOCKHOLDERS' (DEFICIT) EQUITY

As of December 31, 2004 and 2003, the Company has authorized 5,000,000 shares of
preferred stock and 100,000,000 shares of common stock. For each share of common
stock held, common stockholders are entitled to one vote on matters submitted to
the stockholders.

The Preferred Stock may be issued in one or more series at the discretion of the
Board of Directors (the "Board"), without stockholder approval. The Board is
authorized to determine the number of shares in each series and all
designations, rights, preferences, and limitations on the shares in each series,
including, but not limited to, determining whether dividends will be cumulative
or non-cumulative.

On April 7, 2004, Motient sold 4,215,910 shares of its common stock at a per
share price of $5.50 for an aggregate purchase price of $23.2 million to several
different investors in a private placement. In connection with this sale,
Motient signed a registration rights agreement with the holders of these shares.
Motient also issued warrants to purchase an aggregate of 1,053,978 shares of its
common stock to the investors listed above, at an exercise price of $5.50 per
share. Because Motient met certain deadlines related to the registration of the
shares, the warrants will never vest.

In connection with this sale, Motient issued to Tejas Securities Group, Inc.,
its placement agent for the private placement, and certain CTA affiliates,
warrants to purchase 600,000 and 400,000 shares, respectively, of its common
stock. The exercise price of these warrants is $5.50 per share. The warrants are
immediately exercisable upon issuance and have a term of five years. Motient
also paid Tejas Securities Group, Inc. a placement fee of $350,000 at closing.
The fair value of the warrants was estimated at $6.2 million using a
Black-Scholes model. The shares were offered and sold pursuant to the exemption
from registration afforded by Rule 506 under the Securities Act and/or Section
4(2) of the Securities Act.

On July 1, 2004, Motient sold 3,500,000 shares of its common stock at a per
share price of $8.57 for an aggregate purchase price of $30.0 million to
multiple investors. The sale of these shares was not registered under the
Securities Act and the shares may not be sold in the United States absent
registration or an applicable exemption from registration requirements. The
shares were offered and sold pursuant to the exemption from registration
afforded by Rule 506 under the Securities Act and/or Section 4(2) of the
Securities Act. Motient also issued warrants to purchase an aggregate of 525,000
shares of its common stock to the investors listed above, at an exercise price
of $8.57 per share. Because Motient met certain deadlines related to the
registration of the shares, the warrants will never vest.

                                      F-25
<PAGE>

In connection with this sale, Motient issued to certain affiliates of CTA and
Tejas Securities Group, Inc., its placement agent for the private placement,
warrants to purchase 340,000 and 510,000 shares, respectively, of its common
stock. The exercise price of these warrants is $8.57 per share. The warrants are
immediately exercisable upon issuance and have a term of five years. Motient
also paid Tejas Securities Group, Inc. a placement fee of $850,000 at closing.
The fair value of the warrants was estimated at $11.6 million using a
Black-Scholes model.

On November 12, 2004, Motient sold 15,353,609 shares of its common stock at a
per share price of $8.57. Motient received aggregate proceeds of $126,397,809,
net of $5,182,620 in commissions paid to its placement agent, Tejas Securities
Group, Inc. The approximately 60 purchasers included substantially all of the
purchasers from the April and July 2004 private placements, as well multiple new
investors. In connection with this sale, Motient signed a registration rights
agreement with the holders of these shares. Among other things, this
registration rights agreement required us to file and cause to make effective a
registration statement permitting the resale of the shares by the holders
thereof. Motient also issued warrants to purchase an aggregate of approximately
3,838,401 shares of its common stock to the investors listed above, at an
exercise price of $8.57 per share. These warrants will vest if and only if
Motient does not meet certain deadlines between January and March 2005 with
respect to certain requirements under the registration rights agreement, one of
which has already been met and one of which has not been met. Accordingly, 25%
of these warrants have vested and 25% of these warrants will never vest. If the
remaining warrants vest, they may be exercised by the holders thereof at any
time through November 11, 2009.

Rights Offering

On November 22, 2004, Motient announced that it will issue to each of its
stockholders of record one right for each share of Motient common stock held as
of the close of business on December 17, 2004. Each right will entitle any
holder that did not participate in the April, July or November 2004 private
placements to purchase 0.103 shares of its common stock at a price of $8.57 per
share, with fractions rounded up to the next whole share. A maximum of 2.5
million shares may be sold in the Rights Offering, generating maximum aggregate
proceeds of approximately $21.4 million.

The rights will be non-transferable and will expire if not exercised within the
exercise period. The rights will not be exercisable until the registration
statement covering the rights and the shares of underlying common stock is
declared effective by the SEC, and the exercise period will expire 30 days after
the rights become exercisable. Motient has not filed a registration statement
relating to the rights offering, but intends to do so as soon as reasonably
practicable. Motient expects to consummate this rights offering in mid 2005.

The holders of the rights will not have over-subscription rights, and there will
be no backstop to purchase unsubscribed shares. Motient reserves the right to
abandon this rights offering at any time prior to the effectiveness of the
registration statement relating to the rights offering, and upon any such
abandonment, any and all of the rights previously issued will be cancelled, will
no longer be exercisable and will be of no further force or effect.

                                      F-26
<PAGE>

As of December 31, 2004, the Company had reserved common stock for future
issuance as detailed below.


   Shares issuable upon exercise of warrants               8,895,286
   2002 Stock Option Plan                                  1,741,200
   Defined Contribution Plan                                  69,184
   2004 Restricted Stock Plan                                984,600
                                                          ----------
        Total                                             11,690,270
                                                          ==========

Please see Note 21 ("Subsequent Events") for a discussion of recent developments
related to the issuance of common stock.

13.  STOCK OPTIONS AND RESTRICTED STOCK

In May 2002, the Company's Board approved the 2002 Stock Option Plan with
2,993,024 authorized shares of common stock, of which options to purchase
605,727 shares of the Company's common stock were outstanding at December 31,
2004. The plan was approved by the Company's stockholders on July 11, 2002. The
options granted initially in 2002 are subject to vesting in two parts - 50% of
the shares vest in three equal parts on the first, second and third anniversary
of the date of grant, and the other 50% vest in three equal parts, or are
rescinded, based on a comparison of the Company's performance in 2002, 2003 and
2004 to certain objectives established by the compensation and stock option
committee of the Board following the availability of the annual results. In May
2004, the compensation committee of the Company's Board made a determination to
vest a portion of the 2003 performance options. The 2002 and 2004 performance
objectives were met in ordinary course, and those options were vested. The
performance based options are accounted for in accordance with variable plan
accounting, which requires that the value of these options are measured at their
intrinsic value and any change in that value be charged to the income statement
upon the determination that the fulfillment of the performance criteria is
probable. The other options were previously accounted for as a fixed plan and in
accordance with intrinsic value accounting, which require that the excess of the
market price of stock over the exercise price of the options, if any, at the
time that both the exercise price and the number of options are known be
recorded as deferred compensation and amortized over the option vesting period.

In March 2003, the Company's board of directors approved the reduction in the
exercise price of all of the outstanding stock options from $5.00 per share to
$3.00 per share. The re-pricing requires that all options be accounted for in
accordance with variable plan accounting, which requires that the value of these
options are measured at their intrinsic value and any change in that value be
charged to the income statement each quarter based on the difference (if any)
between the intrinsic value and the then-current market value of the common
stock. For the three and twelve months ended December 31, 2004, the Company
recorded a mark-to-market adjustment of $3.5 million and $7.4 million
respectively relating to these re-priced options. Options to purchase 1,631,025
shares, 1,757,513 shares, and 605,727 shares of the Company's common stock were
outstanding at December 31, 2002, 2003 and 2004, respectively, under the
Company's 2002 Stock Option Plan. Options to purchase 2,683,626 shares of the
Predecessor Company's stock were outstanding at April 30, 2002. These options
were cancelled as part of the Company's reorganization.

                                      F-27
<PAGE>

In July and September 2003, the compensation and stock option committee of the
Company's Board, acting pursuant to the Company's 2002 stock option plan,
granted 26 employees and officers options to purchase an aggregate of 470,000
shares of the Company's common stock at a price of $5.15 per share and 25,000
shares of the Company's common stock at a price of $5.65 per share. One-half of
each option grant vests with the passage of time and the continued employment of
the recipient, in three equal increments, on the first, second and third
anniversary of the date of grant. The other half of each grant vested based on
the performance of the Company in 2004. In August 2004, one employee received a
grant for 100,000 shares of the Company's common stock at a price of $5.15 per
share. These options were immediately exercisable. If vested and not exercised,
the options will expire on the 10th anniversary of the date of grant. In
December 2004, the directors, one employee and one consultant received options
to purchase an aggregate of 205,000 shares of the Company's common stock at a
price of $8.57 per share. These options were immediately exercisable upon
issuance, but later amended to vest on February 28, 2005 and expire on March 1,
2005. Also on February 28, 2005, the board granted an aggregate of 205,000
options with a strike price of $28.70 per share to the same persons . This
strike price was set at the closing price of the Company's common stock on
February 28, 2005.

2004 Restricted Stock Plan

In August 2004, the Company adopted a restricted stock plan, and subsequently
registered the shares to be issued under such plan on a registration statement
on Form S-8. Pursuant to this plan, the Company may issue up to 1,000,000 shares
of restricted common stock to employees or directors. In September 2004, the
Company issued an aggregate of 15,400 shares of restricted stock to its
directors as partial compensation for their service on the board of directors.
Such shares vested in February 2005. Also in February 2005, the Company issued
an aggregate of 95,286 shares of restricted stock to certain consultants and
advisors, which vested on February 18, 2005.

Information regarding the Company's stock option plan is summarized below:



                                      F-28
<PAGE>
<TABLE>
<CAPTION>
                                                            Restricted
                                                             Stock and
                                                              Options         Options Granted     Weighted Average
                                                             Available             and              Option Price
                                                             For Grant         Outstanding           Per Share
                                                             ---------         -----------           ---------
<S>                                                            <C>               <C>                     <C>
   Predecessor Company
   -------------------
   Balance, December 31, 2001                                2,588,633            393,353                9.65
      MTNT Restricted stock and options available for
      grant cancelled                                       (2,588,633)          (393,353)
                                                            ----------          ---------
   Balance, April 30, 2002 (Predecessor Company)                    --                 --                  --


   Successor Company
   -----------------
      Reorganized MNCP shares authorized for grant           2,993,024                 --                5.00(1)
      MNCP options granted                                  (2,244,250)         2,244,250                  --
      Exercised                                                     --                 --                5.00
      Forfeited                                                613,225           (613,225)               5.00
                                                            ----------          ---------
   Balance, December 31, 2002                                1,361,999          1,631,025

      Options granted                                         (495,000)           495,000                5.18
      Exercised                                                 15,412            (15,412)               3.00
      Forfeited                                                353,100           (353,100)               3.02
                                                            ----------          ---------
                                                             1,235,511          1,757,513
   Balance, December 31, 2003
      Options granted                                         (340,432)           340,432                6.99
      Exercised                                                630,685           (630,685)               3.23
      Forfeited                                                861,533           (861,533)               3.66
                                                            ----------          ---------
   Balance, December 31, 2004                                2,387,297            605,727
</TABLE>

         (1) In March 2003, our board of directors approved the reduction in the
         exercise price of all of the outstanding stock options from $5.00 per
         share to $3.00 per share.

Options exercisable at December 31:

                                                        Average
                                      Options        Exercise Price
                                      -------        --------------
                      2004            343,140            $7.08
                      2003            437,266            $3.00
                      2002               0                 N/A




                                      F-29
<PAGE>

Exercise prices for options outstanding as of December 31, 2004, were as
follows:

<TABLE>
<CAPTION>
                                          Options Outstanding                       Options Exercisable
                                          -------------------                       -------------------

                           Number            Weighted                             Number
                         Outstanding          Average          Weighted        Exercisable        Weighted
                            as of           Contractual        Average            as of            Average
Range of                December 31,           Life            Exercise        December 31,       Exercise
Exercise Prices             2004             Remaining          Price              2004             Price
---------------             ----             ---------          -----              ----             -----
<S>                        <C>                <C>               <C>               <C>               <C>
      $5.00(1)             143,230            9 years           $3.00             19,804            $3.00
      $5.15                232,497           10 years           $5.15            114,168            $5.15
      $5.65                 25,000           10 years           $5.65              4,168            $5.65
      $8.57(2)             205,000           10 years           $8.57            205,000            $8.57
</TABLE>

(1)  In March 2003, our board of directors approved the reduction in the
     exercise price of all of the outstanding stock options from $5.00 per share
     to $3.00 per share.

(2)  Later amended to vest on February 28, 2005 and expire on March 1, 2005.

Please see Note 21 "Subsequent Events," for information regarding grants of
stock options and restricted stock in 2005.

14.  INCOME TAXES

The following is a summary of the Company's net deferred tax assets.

<TABLE>
<CAPTION>
                                                                             December 31,
                                                                        2004             2003
                                                                        ----             ----
                                                                            (in thousands)
<S>                                                                   <C>               <C>
Net Operating Loss Carryforwards                                       $188,107         $165,933
Deferred Taxes Related to Temporary Differences:
Tangible asset bases, lives and depreciation methods                    (11,067)         (11,000)
         Other                                                           (2,967)          (8,515)
                                                                      ---------         --------
                  Total deferred tax asset, net                         174,073          146,418
Less valuation allowance                                               (174,073)        (146,418)
                                                                      ---------         --------
Net deferred tax asset                                                $      --         $     --
                                                                      =========         ========
</TABLE>

In connection with the fresh-start accounting adopted in 2002, our assets and
liabilities were recorded at their respective fair values. Deferred tax assets
and liabilities were then recognized for the tax effects of the differences
between fair values and tax bases. In addition, deferred tax assets were
recognized for future tax benefits of net operating loss ("NOL"), capital loss
and tax credit carryforwards, and a valuation allowance was recorded for the
overall net increase in deferred tax assets recognized in connection with
fresh-start accounting.

                                      F-30
<PAGE>

To the extent management believes the pre-emergence net deferred tax assets will
more likely than not be realized, a reduction in the valuation allowance
established in fresh-start accounting will be recorded. The reduction in this
valuation allowance will first reduce any remaining intangible assets recorded
in fresh-start accounting, with any excess being treated as an increase to
capital in excess of par value.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependant upon the generation of future taxable income during the periods in
which those temporary differences become deductible. No benefit for federal
income taxes has been recorded for the periods ended December 31, 2004 and 2003,
as the net deferred tax asset generated, primarily from temporary differences
related to the net operating loss, was offset by a full valuation allowance
because it is not considered more likely than not that these benefits will be
realized due to the Company's losses since inception. The change in the
valuation allowance for 2004 is based on the tax effect of the availability and
utilization of the Company's NOL's.

As of December 31, 2004 and 2003, the Company had estimated net operating loss
carryforwards ("NOLs") of $468 million and $412 million, respectively. In April
2002, due to the debt restructuring and reorganization, the Company has
triggered a change of control, which has limited the availability and
utilization of the NOLs. The Company's NOL's expire between 2005 and 2024.

The provision for income taxes for the periods below differs from the amount
computed by applying the federal statutory rate due to the following:

<TABLE>
<CAPTION>
                                                                                Successor Company               Predecessor Company
                                                                                -----------------               -------------------
                                                                   Year Ended December 31,   Eight Months Ended   Four Months Ended
                                                                    2004             2003    December 31, 2002     April 30, 2002
                                                                    ----             ----    -----------------     --------------
<S>                                                                <C>             <C>             <C>                <C>
Statutory Federal income tax rate                                   34.0%           34.0%           34.0%               34.0%

State and local taxes, net of Federal tax benefit                   5.89%           6.14%           6.19%               6.19%

Permanent Differences                                              (1.66)%         (0.32)%         (0.03)%             (0.03)%

Valuation Allowance                                               (38.23)%        (39.82)%        (40.16)%            (40.16)%

Effective income tax rate                                             --              --              --                  --
</TABLE>

15. RELATED PARTIES

In 2004, Motient paid Communications Technology Advisors LLC $1,111,000 and
$25,000 to Gerald Stevens-Kittner, Esq. for consulting services.

At December 31, 2004 Motient was due approximately $5,400 from MSV for certain
customer payments that were received by MSV in 2004 and remitted to Motient in
2005.

The lenders of our term credit facility included Gary Singer, directly or
through one or more entities. Gary Singer is the brother of Steven G. Singer,
one of Motient's directors. Please see footnote 10 Debt & Capital Leases for
additional information regarding out Term Credit Facility.

                                      F-31
<PAGE>


Communication Technology Advisors LLC

In May 2002, the Company entered into a consulting agreement with Communication
Technology Advisors LLC ("CTA") under which CTA provided consulting services to
the Company. CTA's chairman, Jared E. Abbruzzese, was a director of the Company
until June 20, 2003. Peter Aquino, a director from June 20, 2003 to February,
2004, was a senior managing director of CTA. Gerry S. Kittner, also a Motient
director, is an advisor and consultant for CTA.

CTA is a consulting and private advisory firm specializing in the technology and
telecommunications sectors. The Company's agreement with CTA had an initial term
of three months ending August 15, 2002, and was extended by mutual agreement for
several additional terms of two or three months each. For the first three months
of the agreement, CTA was paid a flat fee of $60,000 per month, and for the
period August 2002 to May 2003, the monthly fee was $55,000. Beginning in May
2003, the monthly fee was reduced to $39,000. The Company also agreed to
reimburse CTA for CTA's out-of-pocket expenses incurred in connection with
rendering services during the term of the agreement. This agreement was modified
on January 30, 2004.

CTA had previously acted as the spectrum and technology advisor to the official
committee of unsecured creditors in connection with the Company's Chapter 11
case. CTA received a total of $475,000 in fees for such advice and was
reimbursed a total of $4,896 for expenses in connection with the rendering of
such advice.

Except for the warrants offered to CTA described below and the warrants granted
to certain members of CTA in connection with the private placement of the
Company's common stock on April 7, 2004, neither CTA, nor any of its principals
or affiliates is a stockholder of Motient, nor does it hold any debt of Motient
(other than indebtedness as a result of consulting fees and expense
reimbursement owed to CTA in the ordinary course under the Company's existing
agreement with CTA). CTA has informed the Company that in connection with the
conduct of its business in the ordinary course, (i) it routinely advises clients
in and appears in restructuring cases involving telecommunications companies
throughout the country, and (ii) certain of the Company's stockholders and
bondholders and/or certain of their respective affiliates or principals, may be
considered to be (a) current clients of CTA in matters unrelated to Motient; (b)
former clients of CTA in matters unrelated to Motient; and (c) separate
affiliates of clients who are (or were) represented by CTA in matters unrelated
to Motient.

In July 2002, the Company's Board approved the offer and sale to CTA (or
affiliates thereof) of a warrant (or warrants) for 500,000 shares of the
Company's common stock, for an aggregate purchase price of $25,000. The warrant
has an exercise price of $3.00 per share and a term of five years. These
warrants were valued at $1.5 million and were recorded as a consultant
compensation expense in December of 2002. Certain affiliates of CTA purchased
the warrants in December 2002. Christopher W. Downie received a warrant for
100,000 of the 500,000 shares.

In November 2003, CTA was engaged to provide valuation of Motient's equity
interest in MSV as of December 31, 2002. CTA was paid $150,000 for this
valuation.

                                      F-32
<PAGE>

On January 30, 2004, the Company engaged CTA to act as chief restructuring
entity. As consideration for this work, Motient agreed to pay to CTA a monthly
fee of $60,000, one-half of which will be paid monthly in cash and one-half of
which will deferred. The new agreement amends the consulting arrangement
discussed above. In April 2004, Motient paid CTA $440,000 for all past deferred
fees.

In April 2004 and July 2004, certain members of CTA were granted warrants to
purchase 400,000 shares and 340,000 shares, respectively, of common stock in
conjunction with the private placements of the Company's common stock on April
7, 2004 and July 1, 2004. The warrants have an exercise price of $5.50 and $8.57
per share, respectively, and a term of five years. In December 2004, certain
affiliates of CTA were granted options to purchase 125,000 shares of the
Company's common stock at a price of $8.57 per share. The options were initially
immediately vested, but were later amended to vest on February 28, 2005 and
expire on March 1, 2005. For further information on fees paid to CTA, please see
Note 21, "Subsequent Events." Mr. Abbruzzese, Mr. Kittner and Mr. Aquino all of
whom did not participate in the deliberations or vote of the Board with respect
to the foregoing matters while serving as a member of the Board.

16.  COMMITMENTS AND CONTINGENCIES

As of December 31, 2004, the Company had no contractual inventory commitments.

UPS, the Company's largest customer as of December 31, 2002, has substantially
completed its migration to next generation network technology, and its monthly
airtime usage of the Company's network has declined significantly. UPS was
Motient's second largest customer for the twelve months ended December 31, 2003
and Motient's tenth largest customer for the twelve months ended December 31,
2004. There are no minimum purchase requirements under the Company's contract
with UPS and the contract may be terminated by UPS on 30 days' notice at which
point any prepaid network time would be required to be repaid. While the Company
expects that UPS will remain a customer for the foreseeable future, the bulk of
UPS' units have migrated to another network. As of December 31, 2004, UPS had
approximately 4,700 active units on Motient's network.

Until June 2003, UPS had voluntarily maintained its historical level of payments
to mitigate the near-term revenue and cash flow impact of its recent and
anticipated continued reduced network usage. However, beginning in July 2003,
the revenues and cash flow from UPS declined significantly. Also, due to a
separate arrangement entered into in 2002 under which UPS prepaid for network
airtime to be used by it in 2004 and beyond, the Company does not expect that
UPS will be required to make any cash payments to the Company in through 2006
for service to be provided through 2006. Pursuant to such agreement, and,
through December 31, 2004, UPS has not been required to make any cash payments
to the Company in, and the value of the Company's remaining airtime service
obligations to UPS in respect of the prepayment was approximately $4.0 million.
If UPS terminates the contract, we will be required to refund any unused portion
of the prepayment to UPS.

                                      F-33
<PAGE>

Operating Leases

The Company leases substantially all of its base station sites through operating
leases. The majority of these leases provide for renewal options for various
periods at their fair rental value at the time of renewal. In the normal course
of business, the operating leases are generally renewed or replaced by other
leases. Additionally, the Company leases certain facilities and equipment under
arrangements accounted for as operating leases. Certain of these arrangements
have renewal terms. Total rent expense, under all operating leases, approximated
$13.9 million for the year ended December 31, 2004, $15.2 million for the year
ended December 31, 2003, $10.5 million for the eight months ended December 31,
2002, and $5.6 million for the four months ended April 30, 2002.

At December 31, 2004, minimum future lease payments under noncancelable
operating leases are as follows:
                                                          Operating
                                                          ---------
                                                        (in thousands)
            2005                                            $5,173
            2006                                             3,085
            2007                                             2,273
            2008                                             1,850
            2009 and thereafter                              2,831
                                                           -------
            Total                                          $15,212
                                                           =======

Change of Control Agreements

Pursuant to the Plan of Reorganization, Motient entered into a change of control
agreement, effective May 1, 2002, with each of Mr. Matheson, Ms. Peterson, and
eight other vice presidents of Motient. Under the agreements, each officer is
eligible to receive one year of their annual base salary (excluding cash bonus)
in the event that both (x) a "change in control" or an anticipated "change in
control," as defined in the change of control agreement, has occurred and (y)
the employee is terminated or his or her compensation or responsibilities are
reduced. The events constituting a "change of control" generally involve the
acquisition of greater than 50% of the voting securities of Motient, as well as
certain other transactions or events with a similar effect. Other than Mr.
Matheson and Ms. Peterson, the Company currently has no employees with such a
change of control agreement.

17.  EMPLOYEE BENEFITS

Prior to the Company's reorganization, the Company had several active stock
plans. All of these plans and the respective authorized and issued stock options
were cancelled as part of the Company's reorganization on May 1, 2002.

Defined Contribution Plan

The Company sponsored a 401(k) defined contribution plan ("401(k) Savings Plan")
in which all employees of Motient could participate. The 401(k) Savings Plan
provided for (i) a Company match of employee contributions, in the form of
common stock, at a rate of $1 for every $1 of an employee's contribution not to
exceed 4% of an employee's eligible compensation, (ii) a discretionary annual
employer non-elective contribution, (iii) the option to have plan benefits
distributed in the form of installment payments, and (iv) the reallocation of
forfeitures, if any, to active participants. In 2001, effective January 2002,
the Company amended its 401(k) Savings Plan to make the matching contributions
discretionary, as well as to allow the match to be made in either cash or shares
of common stock, at the Company's sole discretion. The Company's matching
expense was $0.2 million for 2004, $0.4 million for 2003 and $0 for 2002. During
2002, the Company authorized 200,000 shares for the 401(K) Savings Plan.



                                      F-34
<PAGE>


2002 Stock Option Plan and 2004 Restricted Stock Plan

See Note 13 "Stock Options and Restricted Stock."

18.  LEGAL MATTERS

On April 15, 2004, Motient filed a claim under the rules of the American
Arbitration Association in Fairfax County, VA against Wireless Matrix
Corporation, a reseller of Motient's services, for the non-payment of certain
amounts due and owing under the "take or pay" agreement between Motient and
Wireless Matrix. Under this agreement, Wireless Matrix agreed to purchase
certain minimum amounts of air-time on the Motient network. In February 2004,
Wireless Matrix informed Motient that it was terminating its agreement with
Motient. Motient did not believe that Wireless Matrix had any valid basis to do
so, and consequently filed the above mentioned claim seeking over $2.6 million
in damages, which amounts represents Wireless Matrix's total prospective
commitment under the agreement. On May 10, 2004, Motient received notice of a
counter-claim by Wirelesss Matrix of approximately $1 million, representing such
amounts as Wireless Matrix claimed to have paid in excess of services rendered
under the agreement. In June 2004, Motient reached a favorable out of court
settlement, in which Wireless Matrix paid Motient $1.1 million.

From time to time, Motient is involved in legal proceedings in the ordinary
course of its business operations. Although, there can be no assurance as to the
outcome or effect of any legal proceedings to which Motient is a party, Motient
does not believe, based on currently available information, that the ultimate
liabilities, if any arising from any such legal proceedings not otherwise
disclosed would have a material adverse impact on its business, financial
condition, results of operations or cash flows.

19.  SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
                                                                                                                 Predecessor
                                                                                 Successor Company                 Company
                                                                                 -----------------                 -------
                                                                                                      Eight         Four
                                                                                                      Months       Months
                                                                      Year Ended     Year Ended       Ended         Ended
                                                                     December 31,   December 31,   December 31,   April 30,
                                                                         2004           2003           2002         2002
                                                                         ----           ----           ----         ----
<S>                                                                    <C>           <C>          <C>          <C>
     Cash payments for interest                                        $  3,144      $    572     $    396     $    427
     Cash payment for income taxes                                           --            --           --           --
     Non-cash investing and financing activities:
     Additional deferred compensation on non-cash compensation               --            --           --           97
     Issuance and re-pricing of common stock purchase warrants           26,672        10,024        1,464           --
     Financing fees added to term credit facility                           320            --           --           --
     Exercise and Expiration of common stock warrents                   (13,575)           --           --           --
     Vendor financing under maintenance agreement                            --            --        2,631           --
     Issuance of Common Stock under the Defined Contribution Plan            --           280           --         (203)
     SAB 51 pick-up                                                       7,993            --           --           --
</TABLE>




                                      F-35
<PAGE>

Cash (used) provided by reorganization items were as follows:

<TABLE>
<CAPTION>
                                                                                                 Predecessor
                                                              Successor Company                    Company
                                                              -----------------                    -------
                                                                                 Eight Months    Four Months
                                                 Year Ended      Year Ended         Ended           Ended
                                                 December 31,   December 31,     December 31,      April 30,
                                                    2004           2003              2002            2002
                                                    ----           ----              ----            ----
<S>                                                 <C>          <C>              <C>             <C>
     (in thousands)
     Professional Fees                              $ --         $    --          $(3,434)        $(5,892)
     Interest Income                                  --              --               --             145
                                                    ----         -------          -------         -------
                                                    $ --         $    --          $(3,434)        $(5,747)
                                                    ====         =======          =======         =======
</TABLE>

Further details regarding the plan are contained in Motient's Disclosure
Statement with respect to the plan, which was filed as Exhibit 99.2 to the
Company's current report on Form 8-K dated March 4, 2002.

20.  REORGANIZATION AND FRESH START ACCOUNTING

Reorganization

On April 26, 2002, the United States Bankruptcy Court for the Eastern District
of Virginia (the "Bankruptcy Court") confirmed our Plan of Reorganization that
was filed with the Bankruptcy Court on February 28, 2002. On April 30, 2002, we
emerged from proceedings under Chapter 11 of Title 11 of the United States code
(the "Bankruptcy Code") pursuant to the terms of our Plan of Reorganization.

We operated our business as a debtor-in-possession subject to the jurisdiction
of the Bankruptcy Court from January 10, 2002, (the "Filing Date") until April
30, 2002. Accordingly, our consolidated financial statements prior to May 1,
2002 have been prepared in accordance with the American Institute of Certified
Public Accountants Statement of Position 90-7, Financial Reporting by Entities
in Reorganization Under the Bankruptcy Code ("SOP 90-7") and generally accepted
accounting principles applicable to a going concern, which assume that assets
will be realized and liabilities will be discharged in the normal course of
business.

The Company's emergence from Chapter 11 proceedings resulted in a new reporting
entity with the adoption of fresh-start accounting in accordance with the SOP
90-7. Pursuant to SOP 90-7, the accounting for the effects of the reorganization
occurred as of the confirmation date because there were no remaining conditions
precedent to the effectiveness of the plan as of the April 26, 2002 confirmation
date. For accounting purposes, the Company applied fresh-start accounting as of
May 1, 2002, because the results of operations for the 5 days through April 30,
2002 did not have a material impact on the reorganized company's financial
position, results of operations and cash flows. In connection with the
preparation of the Predecessor Company's Disclosure Statement, an independent
financial advisor determined our reorganization value, or fair value, to be
$234.0 million before considering certain preference. This reorganization value
was based upon our projected cash flows, selected comparable market multiples of
publicly traded companies and other applicable ratios and valuation techniques.
The estimated total equity value of the Reorganized Company aggregating $221.0
million was determined after taking into account the preference rights on
liquidation available to certain equity holders of MSV in connection with the
Plan of Reorganization.

Fresh Start Accounting

In accordance with SOP No. 90-7, the reorganized value of the Company was
allocated to the Company's assets based on procedures specified by SFAS No. 141,
"Business Combinations". Each liability existing at the plan confirmation date,
other than deferred taxes, was stated at the present value of the amounts to be
paid at appropriate market rates. It was determined that the Company's
reorganization value computed immediately before the Effective Date was $234
million. Subsequent to the determination of this value, the Company determined
that the reorganization value ascribed to MSV did not reflect certain preference
rights on liquidation available to certain equity holders in MSV. Therefore, the
reorganization value of MSV was reduced by $13 million and the Company's
reorganization value was reduced to $221 million. The Company adopted
"fresh-start" accounting because holders of existing voting shares immediately
before filing and confirmation of the plan received less than 50% of the voting
shares of the emerging entity and its reorganization value is less than its
postpetition liabilities and allowed claims, as shown below:

                                      F-36
<PAGE>


Postpetition current liabilities                                $49.9 million
Liabilities deferred pursuant to Chapter 11 Proceedings         401.1 million
                                                              ---------------
Total postpetition liabilities and allowed claims               451.0 million
Reorganization value                                           (221.0 million)
                                                              ---------------
Excess of liabilities over reorganization value               $(230.0 million)
                                                              ================

After consideration of the Company's debt capacity, and after extensive
negotiations among parties in interest, it was agreed that Motient's
reorganization capital structure should be as follows:


Notes payable to Rare Medium and CSFB                  $19.8 million
Shareholders' Equity                                   201.2 million
                                                      --------------
                                                      $221.0 million
                                                      ==============

The Company allocated the $221.0 million reorganization value among its net
assets based upon its current estimates of the fair value of its assets. In the
case of current assets, with the exception of inventory, the Company concluded
that their carrying values approximated fair values. The values of the Company's
frequencies and its investment in and note receivable from MSV were based on
independent analyses presented to the bankruptcy court and subsequently adjusted
as discussed above. The value of the Company's fixed assets was based upon a
valuation of the Company's software and estimates of replacement cost for
network and other equipment, for which the Company believes that its recent
purchases represent a valid data point. The value of the Company's other
intangible assets was based on third party valuations as of May 1, 2002.

In February 2003, the Company engaged a financial advisory firm to prepare a
valuation of software and customer intangibles. Software and customer
intangibles were not taken into consideration when the original fresh-start
balance sheet was determined at May 1, 2002. The changes for the software and
customer contracts are reflected below and in the financial statements and notes
herein.



                                      F-37
<PAGE>


The effect of the plan of reorganization and application of "fresh-start"
accounting on the Predecessor Company's balance sheet as of April 30, 2002, is
as follows:

<TABLE>
<CAPTION>
                                                                     Debt
                                                                   Discharge
                                                Preconfirmation      and                                    Reorganized
                                                  Predecessor      Exchange             Fresh Start          Successor
(in thousands)                                     Company(j)      of Stock             Adjustments           Company
                                                   ----------      --------             -----------           -------
<S>                                                    <C>         <C>          <C>      <C>          <C>   <C>
Assets:
Current assets
  Cash                                               $17,463                                                  $17,463
  Receivables                                         10,121                                                   10,121
  Inventory                                            8,194                              $(4,352)              3,842
  Deferred equipment costs                            11,766                              (11,766)    (e)          --
  Other current assets                                11,443                                                   11,443
                                                      ------                               ------              ------
     Total current assets                             58,987                              (16,118)             42,869
Property and equipment                                58,031                              (1,553)     (i)      56,478
FCC Licenses and other intangibles                    45,610                               56,866     (f)(i)  102,476
Goodwill                                               4,981                               (4,981)    (i)          --
Investment in and notes receivable from MSV           27,262                               26,593     (f)      53,855
Other long-term assets                                 2,864                               (1,141)    (e)       1,723
                                                       -----                              -------               -----
    Total Assets                                    $197,735                              $59,666            $257,401
                                                    ========                              =======            ========

Liabilities & Stockholders' (Deficit) Equity
Liabilities Not Subject to Compromise:
Current liabilities:
   Current maturities of capital leases               $4,096                                                   $4,096
   Accounts payable - trade                            1,625                                                    1,625
   Vendor financing                                      655                                                      655
   Accrued expenses                                   15,727                                                   15,727
   Deferred revenue                                   23,284                              (18,913)    (g)(e)    4,371
                                                      ------                              -------               -----
                                                      45,387                              (18,913)             26,474
  Long term liabilities:
    Vendor financing                                   2,661                                                    2,661
    Capital lease obligation                           3,579                                                    3,579
    Deferred revenue                                  19,931                              (16,136)    (e)(g)    3,795

Liabilities Subject to Compromise:
   Prepetition liabilities                             8,785         (8,785)    (a)                                --
   Senior note, including accrued interest
   thereon                                           367,673       (367,673)    (b)                                --
   Rare Medium Note, including accrued
   interest thereon                                   27,030        (27,030)    (c)                                --
                                                    --------        -------                                    ------
                                                     403,488       (403,488)                                       --
Rare Medium and CSFB Notes                                --         19,750                                    19,750
                                                    --------       --------               -------              ------
   Total liabilities                                 475,046       (383,738)              (35,049)             56,259

Stockholders' (deficit) equity:
    Common stock - old                                   584           (584)    (h)                                --
    Common stock - new                                                  251     (d)                               251
    Additional paid-in capital                       988,531       (988,531)                                  197,814
                                                                    197,814     (d)(h)
    Common stock purchase
    warrants - old                                    93,730        (93,730)    (h)
    Common stock purchase
    warrants - new                                                    3,077     (d)                             3,077

    Deferred stock compensation                        (336)            336     (h)                                --

    Retained (deficit) earnings                  (1,359,820)      1,359,820                94,715                  --
                                                 -----------       (183,725)               ------              ------
                                                                    (94,715)    (d)(h)
                                                                    183,725     (h)
                                                                  ---------

Stockholders' Equity (Deficit)                     (277,311)        383,738                94,715             201,142
                                                   ---------        -------                ------             -------
Total Liabilities & Stockholders' Equity
(Deficit)                                           $197,735          $  --               $59,666            $257,401
                                                    ========          =====               =======            ========
</TABLE>

                                      F-38
<PAGE>

(a)  Represents the cancellation of the following liabilities:
     i.   Amounts due to Boeing                                      $1,533
     ii.  Amounts due to CSFB                                         2,000
     iii. Amounts due to JP Morgan Chase                              1,550
     iv.  Amounts due to Evercore Partners LP ("Evercore")            1,948
     v.   Amounts due to the FCC                                      1,003
     vi.  Other amounts                                                 751
                                                                     ------
                                                                     $8,785

     Liabilities were cancelled in exchange for the following:
     a.   97,256 shares of new Motient common stock,
     b.   a note to CSFB in the amount of $750 and
     c.   a warrant to Evercore Partners to purchase 343,450 shares of new
          Motient common stock, and
     d.   a note to Rare Medium in the amount of $19,000.
(b)  Represents the cancellation of the senior notes in the amount of $367,673,
     including interest threron, in exchange for 25,000,000 shares of new
     Motient common stock. Certain of the Company's other creditors received an
     aggregate of 97,256 shares of the Company's common stock in settlement for
     amounts owed to them.
(c)  Represents the cancellation of $27,030 of notes due to Rare Medium,
     including accrued interest thereon, in exchange for a new note in the
     amount of $19,000. The Company also issued CSFB a note in the principal
     amount of $750 for certain investment banking services.
(d)  Represents the issuance of the following:
     i.   25,097,256 shares of new Motient common stock.
     ii.  warrants to the holders of pre-reorganization common stock to purchase
          an aggregate of approximately 1,496,512 shares of common stock, with
          such warrants being valued at approximately $1,100.
     iii. a warrant to purchase up to 343,450 share of common stock to Evercore,
          valued at approximately $1,900. The retained earnings adjustment
          includes the gain on the discharge of debt of $183,725.
(e)  Represents the write off of deferred equipment costs of $12,907 and
     deferred equipment revenue of $12,907 since there is no obligation to
     provide future service post-"fresh start".
(f)  To reflect the step-up in assets in accordance with the reorganization
     value and valuations performed.
(g)  Represents the write off of the deferred gain associated with the Company's
     sale of its satellite assets to MSV in November 2001 and the write-off of
     the unamortized balance of the $15,000 perpetual license sold to Aether in
     November 2000, both of which total approximately $22,142, since there is no
     obligation to provide future service post-"fresh start".
(h)  To record the cancellation of the Company's pre-reorganization equity and
     to reverse the gain on extinguishment of debt of $183,725 and the gain on
     fair market adjustment of $94,715.
(i)  To record the valuation and resulting increase of customer intangibles of
     approximately $11,501 and frequencies of $45,365. The reduction of $4,981
     is due to a write-off of goodwill. The reduction of property and equipment
     relates to a subsequent reduction in the carrying value of certain software
     from $4,942 to $3,389, reduction to inventory from $8,194 to $3,842 to its
     net realizable value.
(j)  The balances do not match the balances in the Company's Plan of
     Reorganization due to subsequent re-audit adjustments.

                                      F-39
<PAGE>

Under the Plan of Reorganization, all then-outstanding shares of the Company's
pre-reorganization common stock and all unexercised options and warrants to
purchase the Company's pre-reorganization common stock were cancelled. The
holders of $335 million in senior notes exchanged their notes for 25,000,000
shares of the Company's new common stock. Certain of the Company's other
creditors received an aggregate of 97,256 shares of the Company's new common
stock in settlement for amounts owed to them. These shares were issued following
completion of the bankruptcy claims process; however, the value of these shares
has been recorded in the financial statements as if they had been issued on the
effective date of the reorganization. Holders of the Company's
pre-reorganization common stock received warrants to purchase an aggregate of
approximately 1,496,512 shares of common stock. The warrants expired May 1,
2004, or two years after the Effective Date. The warrants were exerciseable to
purchase shares of Motient common stock at a price of $.01 per share only if and
when the average closing price of Motient's common stock over a period of ninety
consecutive trading days was equal to or greater than $15.44 per share.
Motient's common stock did not trade at this level from May 1, 2002 to May 1,
2004. All warrants issued to the holders of the Company's pre-reorganization
common stock, including those shares held by the Company's 401(k) savings plan,
have been recorded in the financial statements as if they had been issued on the
effective date of the reorganization. Also, in July 2002, Motient issued to
Evercore, financial advisor to the creditors' committee in Motient's
reorganization, a warrant to purchase up to 343,450 shares of common stock, at
an exercise price of $3.95 per share. The warrant was dated May 1, 2002, and has
a term of five years. If the average closing price of Motient's common stock for
thirty consecutive trading days is equal to or greater than $20.00, Motient may
require Evercore to exercise the warrant, provided the common stock is then
trading in an established public market. The value of this warrant has been
recorded in the financial statements as if it had been issued on May 1, 2002.

21.  SUBSEQUENT EVENTS

Management and Board Changes

On March 4, 2005, the board of directors elected Barry A. Williamson to serve as
a member of the board.

On February 28, 2005, Peter Aquino resigned from Motient's board of directors.

MSV Related Matters

On February 9, 2005, Motient entered into a merger agreement with Telcom
Satellite Ventures Inc. and Telcom Satellite Ventures II Inc. and simultaneously
consummated the transactions contemplated thereby, pursuant to which Telcom
merged with and into MVH Holdings Inc., a direct and wholly-owned subsidiary of
Motient, in a tax free reorganization in which MVH is the surviving company. In
exchange for 2,296,835 MSV limited partnership units, Motient issued to Telcom's
stockholders 8,187,804 shares of its common stock owned by the Telcom entities.

                                      F-40
<PAGE>

Concurrently with this merger, Motient (through MVH) also purchased 373.7 shares
of common stock of Spectrum Space Equity Investors IV, Inc. and two other
related entities, representing approximately 66.3% of the outstanding common
stock of each of such entities, and 221.2 shares of common stock of Columbia
Space Partners, Inc. and two other related entities, representing approximately
27.8% of the outstanding common stock of such entities. In total, Motient issued
to the Spectrum entities and Columbia entities a total of 4,516,978 shares of
Motient common stock in a private placement in exchange for indirect ownership
of 1,267,098 MSV units.

Telcom, Columbia and Spectrum also received warrants exercisable for an
aggregate of approximately 952,858 shares of Motient common stock. The warrants
have a term of five years and an exercise price equal to $22.50. Each warrant
shall become exercisable only as follows: (i) with respect to 35% of the warrant
shares, on the date that is 30 days following the closing of the merger, if a
registration statement covering the resale of the shares shall not have been
filed with the SEC by such date, (ii) with respect to an additional 35% of the
warrant shares, on the 60th day after the closing of the merger, if a
registration statement covering the resale of the shares shall not have been
filed with the SEC by such date, and (iii) with respect to 30% of the warrant
shares, on the 180th day after the closing of the Mergers, if a registration
statement covering the resale of the shares shall not have been declared
effective. As Motient has filed a registration statement covering these shares,
70% of the 952,858 warrants will never vest.

On February 25, 2005, the FCC issued a revised set of rules following a detailed
multi-year process for the use of ATC. The rules expanded the technical and
operational flexibility of ATC Services allowing for greater capacity in both
the uplink and downlink directions. These rules are subject to challenge at the
FCC or before a federal court.

CTA Fees

On February 28, 2005, the board granted these CTA affiliates 125,000 options
with a strike price of $28.70 per share. This strike price was set at the
closing price of the Company's common stock on February 28, 2005. In February
2005, CTA and certain of its affiliates were paid an investment banking fee of
$3,709,796 in cash and stock in relation to the closing of Motient's acquisition
of certain interests in MSV. Such fee is equal to 1% of the aggregate
consideration paid by Motient for such MSV interests. This fee was comprised of
95,286 shares of stock and a cash payment of $927,449. 40% of this fee was paid
to The Singer Children's Management Trust, which is a trust established for the
benefit of the children of Gary Singer, a former lender under the 2003 Term
Credit Agreement and the brother of Steven Singer, Motient's chairman of the
board. This amount was paid at the direction of CTA as compensation for the
assistance Gary Singer provided to CTA in the transaction.

In March 2005, Motient paid CTA an additional $25,000 to provide certain
valuation allocations for Motient's interest in MSV as a result of Motient's
November 12, 2004 additional investment in MSV.


                                      F-41
<PAGE>


Legal Matters

In March 2005, Research in Motion, Ltd. (RIM) settled an outstanding patent
infringement lawsuit related to RIM's BlackBerry handheld device and software,
which Motient supports on its Data Tac wireless network. As a result of this
settlement, RIM and its customers, including Motient, may use the BlackBerry
device and software without any further interference from NTP.

Board Actions

In March 2005, the board voted to propose to the shareholders that Motient's
authorized shared be increased from 100 million to 200 million at Motient's next
annual meeting.




                                      F-42
<PAGE>

                            QUARTERLY FINANCIAL DATA
                (dollars in thousands, except for per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                     Successor Company
                                                                     -----------------
                                                                       2004-Quarters
                                                                       -------------
                                                         3/31/04    6/30/04     9/30/04    12/31/04
                                                         -------    -------     -------    --------
<S>                                                     <C>         <C>         <C>        <C>
Revenues                                                $ 11,500    $ 11,439    $  8,353   $  5,588
Operating expenses (1)                                    21,674      24,273      14,583     23,374
                                                        --------    --------    --------   --------
Loss from operations                                     (10,174)    (12,834)     (6,230)   (17,786)

Net Income (loss)                                       $(13,517)   $(23,112)   $ (9,849)  $(25,851)
Basic and Diluted Loss Per Share of common stock (2)    $  (0.54)   $  (0.79)   $  (0.29)  $  (0.62)
Weighted-average common shares outstanding during the
period                                                    25,232      29,338      33,418     41,944
Market price per share (3)
   High                                                 $   7.45    $  14.01    $  13.75   $  23.95
   Low                                                  $   4.05    $   6.15    $   8.40   $   8.95



                                                                    Successor Company
                                                                    -----------------
                                                                       2003-Quarters
                                                                       -------------
                                                        3/31/03     6/30/03     9/30/03    12/31/03
                                                        -------     -------     -------    --------

Revenues                                                $ 14,370    $ 14,992    $ 12,051   $ 13,072
Operating expenses (1)                                    24,424      25,358      24,311     20,559
                                                        --------    --------    --------   --------
Loss from operations (2)                                 (10,054)    (10,366)    (12,260)    (7,487)

Net Income (loss)                                       $(12,394)   $(13,010)   $(22,345)  $(14,373)
Basic and Diluted Loss Per Share of common stock        $  (0.49)   $  (0.52)   $  (0.89)  $  (0.57)
Weighted-average common shares outstanding during
the period                                                25,097      25,137      25,170     25,145
Market price per share (3)
   High                                                 $   4.00    $   2.00    $   5.00   $   5.45
   Low                                                  $   2.75    $   5.75    $   6.35   $   3.95

</TABLE>

(1) In 2003, operating expenses include restructuring charges of approximately
    $0.2 million in the second quarter. All $0.2 million was paid in 2003. In
    2004, $1.1 and $5.2 million in restructuring expenses were charged to costs
    and expenses in the first and second quarters, respectively. Of the $6.3
    million restructuring expense in 2004, $5.0 million was paid in 2004.
(2) Loss per share calculations for each of the quarters are based on the
    weighted average number of shares outstanding for each of the periods, and
    the sum of the quarters is not equal to the full year loss per share amount
    due to rounding.
(3) Until January 14, 2002, the Company's common stock was listed under the
    symbol MTNT on the Nasdaq Stock Market. The Company voluntarily delisted
    from the Nasdaq Stock Market on January 14, 2002 as a result of its Chapter
    11 bankruptcy filing. The Company's common stock is currently traded under
    the symbol MNCP on the Pink Sheets. The quarterly high and low sales price
    represents the intra-day prices in the Nasdaq Stock Market for the Company's
    pre-reorganization common stock for the periods indicated for 2002 and the
    high and low bid prices for Motient pre- and post-reorganization common
    stock for the periods indicated. The quotations represent inter-dealer
    quotations, without retail markups, markdowns or commissions, and may not
    necessarily represent actual transactions. As of December 31, 2004, there
    were 97 stockholders of record of the Company's common stock.




                                      F-43
<PAGE>


                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
                        FOUR MONTHS ENDED APRIL 30, 2002,
                    EIGHT MONTHS ENDED DECEMBER 31, 2002, and
                     YEARS ENDED DECEMBER 31, 2003 and 2004


<TABLE>
<CAPTION>
                                                              Charged
                                                 Balance at   to Costs
                                                 Beginning      and                          Balance at End of
Description                                      of Period    Expenses       Deductions            Period
-----------                                      ---------    --------       ----------            ------
<S>                                                    <C>        <C>             <C>                 <C>
Predecessor Company
-------------------
Four Months Ended April 30, 2002
       Allowance for doubtful accounts                 $964       $(52)           $(139)              $773
-----------------------------------------------------------------------------------------------------------------
Successor Company
-----------------
Eight Months Ended December 31, 2002
       Allowance for doubtful accounts                 $773       $994            $(764)            $1,003
Year Ended December 31, 2003
       Allowance for doubtful accounts               $1,003       $194            $(438)              $759
Year Ended December 31, 2004
       Allowance for doubtful accounts                 $759      $(269)           $(234)              $256


                                                              Charged
                                                 Balance at   to Costs
                                                 Beginning      and                          Balance at End of
Description                                      of Period    Expenses       Deductions            Period
-----------                                      ---------    --------       ----------            ------
Predecessor Company
-------------------
Four Months Ended April 30, 2002
       Allowance for Obsolescence                    $7,073     $4,687            $(797)           $10,963
-----------------------------------------------------------------------------------------------------------------
Successor Company
Eight Months Ended December 31, 2002
       Allowance for Obsolescence                   $10,963       $287          $(1,699)            $9,551
Year Ended December 31, 2003
       Allowance for Obsolescence                    $9,551       $199          $(2,000)            $7,750
Year Ended December 31, 2004
       Allowance for Obsolescence                    $7,750      $(132)         $(7,618)               $--

</TABLE>




                                      F-44
<PAGE>









MOBILE SATELLITE VENTURES LP AND SUBSIDIARIES

Consolidated Financial Statements

Years ended December 31, 2003 and 2004 with Report of Independent Auditors





<PAGE>



                 Mobile Satellite Ventures LP and Subsidiaries

                        Consolidated Financial Statements

                     Years ended December 31, 2003 and 2004



                                    Contents

<TABLE>
<S>                                                                                       <C>
Report of Independent Auditors.............................................................M-1

Audited Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 2003 and 2004...............................M-2
Consolidated Statements of Operations for the years ended
   December 31, 2002, 2003, and 2004.......................................................M-3
Consolidated Statements of Partners' Equity (Deficit) for the years ended
   December 31, 2002, 2003, and 2004.......................................................M-4
Consolidated Statements of Cash Flows for the years ended
   December 31, 2002, 2003, and 2004.......................................................M-6
Notes to Consolidated Financial Statements.................................................M-7
</TABLE>












<PAGE>


                         Report of Independent Auditors

General Partner and Unit Holders
Mobile Satellite Ventures LP

We have audited the accompanying consolidated balance sheets of Mobile Satellite
Ventures LP (a Delaware limited partnership) and subsidiaries (collectively, the
Company) as of December 31, 2003 and 2004, and the related consolidated
statements of operations, partners' equity (deficit), and cash flows for each of
the three years in the period ended December 31, 2004. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes consideration of internal control
over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Mobile Satellite
Ventures LP and subsidiaries at December 31, 2003 and 2004, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2004, in conformity with accounting principles
generally accepted in the United States.


February 18, 2005
McLean, Virginia



                                       M-1
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                 December 31
                                                                          2003                2004
                                                                    ------------------------------------
Assets
<S>                                                                   <C>               <C>
Current assets:
   Cash and cash equivalents                                          $ 3,981,625       $ 130,077,509
   Restricted cash                                                         74,246           5,075,974
   Accounts receivable, net of allowance of $71,687,
    and $69,908 as of December 31, 2003 and 2004, respectively          4,156,416           3,343,769
   Inventory                                                            1,406,604             698,279
   Prepaid expenses and other current assets                            1,058,942             782,761
                                                                    ------------------------------------
Total current assets                                                   10,677,833         139,978,292

Property and equipment, net                                            23,598,573          16,458,416
Intangible assets, net                                                 80,673,205          71,706,319
Goodwill                                                               15,784,572          16,495,324
Other assets                                                               84,779           1,584,779
                                                                    ------------------------------------
Total assets                                                        $ 130,818,962       $ 246,223,130
                                                                    ====================================

Liabilities, minority interest, and partners' equity (deficit)
Current liabilities:
   Accounts payable and accrued expenses                              $ 4,246,544         $ 6,619,064
   Vendor note payable, current portion                                   127,211             205,846
   Deferred revenue, current portion                                    5,887,381           4,882,189
   Other current liabilities                                              110,766              64,979
                                                                    ------------------------------------
Total current liabilities                                              10,371,902          11,772,078

Deferred revenue, net of current portion                               20,865,511          20,690,599
Accrued interest, net of current portion                               16,725,057                  --
Vendor note payable, net of current portion                               915,785             695,714
Notes payable to investors                                             82,924,667                  --
                                                                    ------------------------------------
Total liabilities                                                     131,802,922          33,158,391

Commitments and contingencies
Minority interest                                                              --             100,723

Partners' equity (deficit):
   MSV general partner                                                         --                  --
   MSV limited partners                                                (1,041,013)        217,643,300
   Deferred compensation                                                       --          (4,185,223)
   Accumulated other comprehensive income (loss)                           57,053            (494,061)
                                                                    ------------------------------------
Total partners' equity (deficit)                                         (983,960)        212,964,016
                                                                    ------------------------------------
Total liabilities, minority interest, and partners' equity
(deficit)                                                           $ 130,818,962       $ 246,223,130
                                                                    ====================================
</TABLE>

See accompanying notes.



                                       M-2
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                   Year ended December 31
                                                         2002            2003              2004
                                                  ---------------------------------------------------
<S>                                                <C>              <C>              <C>
Revenues:
   Services and related revenues                   $ 24,389,482     $ 25,536,096     $ 26,664,328
   Equipment sales and other revenues                   464,833        1,588,294        2,342,592
                                                  ---------------------------------------------------
Total revenues                                       24,854,315       27,124,390       29,006,920

Operating expenses:
   Satellite operations and cost of services         11,477,095       10,781,525       10,855,071
   Satellite capacity purchased from MSV Canada       4,647,224        4,858,305        5,768,970
   Next-generation research and development
    expenditures                                      3,532,487        4,267,991        8,593,001
   Sales and marketing                                2,416,050        1,973,381        4,762,461
   General and administrative                         5,343,643        6,632,172        9,264,436
   Depreciation and amortization                     18,235,030       17,942,672       18,454,690
                                                  ---------------------------------------------------
Total operating expenses                             45,651,529       46,456,046       57,698,629
                                                  ---------------------------------------------------

Loss from operations                                (20,797,214)     (19,331,656)     (28,691,709)

Other income (expense):
   Management fee from MSV Canada                     3,100,847        3,199,974        3,568,013
   Equity in losses of MSV Canada                      (373,738)      (1,030,119)        (275,000)
   Interest income                                       55,538           40,355          441,791
   Interest expense                                  (8,577,407)      (9,616,235)      (8,553,987)
   Write-off of investment in joint venture                   -       (2,000,000)               -
   Other income, net                                    424,490          737,211           55,996
                                                  ---------------------------------------------------
Net loss                                           $(26,167,484)    $(28,000,470)  $    (33,454,896)
                                                  ===================================================

</TABLE>

See accompanying notes.




                                       M-3
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

              Consolidated Statements of Partners' Equity (Deficit)

<TABLE>
<CAPTION>
                                                        General Partner                  Limited Partners
                                              ------------------------------------------------------------------
                                                   Number of                  Number of                                Deferred
                                                     Units        Amount        Units               Amount           Compensation
                                              ------------------------------------------------------------------------------------
<S>                                                     <C>      <C>         <C>               <C>                          <C>
Balance at December 31, 2001                            --        $ --        16,642,732        $  49,426,941         $        --
Total, December 31, 2001
   Net loss                                             --          --                --          (26,167,484)                 --
   Translation adjustment                               --          --                --                   --                  --
                                              ------------------------------------------------------------------------------------
Balance, year ended December 31, 2002                   --          --        16,642,732           23,259,457                  --
Total, December 31, 2002
   Issuance of MSV Class A Preferred
    Units                                               --          --           573,951            3,700,000                  --
   Net loss                                             --          --                --          (28,000,470)                 --
   Change in market value of derivative
    instruments                                         --          --                --                   --                  --
   Translation adjustment                               --          --                --                   --                  --
                                               -----------------------------------------------------------------------------------
Balance, year ended December 31, 2003                   --          --        17,216,683           (1,041,013)                 --
Total, December 31, 2003
   Issuance of MSV Class A Preferred
    Units                                               --          --         2,735,317           17,633,333                  --
   Conversion of Notes                                  --          --         9,911,234           84,922,011                  --
   Issuance of MSV Common Units                         --          --         4,923,599          145,000,000                  --
   Issuance of stock options                            --          --                --            4,680,376          (4,680,376)
   Amortization of deferred compensation                --          --                --                   --             495,153
   Distribution of warrant in subsidiary                --          --                --              (96,511)                 --
   Net loss                                             --          --                --          (33,454,896)                 --
   Change in market value of derivative
    instruments                                         --          --                --                   --                  --
   Translation adjustment                               --          --                --                   --                  --
                                              ------------------------------------------------------------------------------------
Balance, year ended December 31, 2004                   --        $ --        34,786,833        $ 217,643,300         $(4,185,223)
                                              ====================================================================================
Total, December 31, 2004
</TABLE>


See accompanying notes.



                                       M-4
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

              Consolidated Statements of Partners' Equity (Deficit)
                                  (continued)

<TABLE>
<CAPTION>
                                                  Accumulated
                                                     Other        Total Partners'
                                                 Comprehensive         Equity         Comprehensive
                                                     Income          (Deficit)             Loss
                                                 ----------------------------------------------------
<S>                                                    <C>       <C>                  <C>
Balance at December 31, 2001                      $       --      $   49,426,941      $          --
Total, December 31, 2001
   Net loss                                               --         (26,167,484)       (26,167,484)
   Translation adjustment                              6,867               6,867              6,867
                                                -----------------------------------------------------
Balance, year ended December 31, 2002                  6,867          23,266,324
Total, December 31, 2002                                                              $ (26,160,617)
                                                                                     ================
   Issuance of MSV Class A Preferred
    Units                                                 --           3,700,000
   Net loss                                               --         (28,000,470)       (28,000,470)
   Change in market value of derivative
    instruments                                       81,712              81,712             81,712
   Translation adjustment                            (31,526)            (31,526)           (31,526)
                                                -----------------------------------------------------
Balance, year ended December 31, 2003                 57,053            (983,960)
Total, December 31, 2003                                                              $ (27,950,284)
                                                                                     ================
   Issuance of MSV Class A Preferred
    Units                                                 --          17,633,333
   Conversion of Notes                                    --          84,922,011
   Issuance of MSV Common Units                           --         145,000,000
   Issuance of stock options                              --                   -
   Amortization of deferred compensation                  --             495,153
   Distribution of warrant in subsidiary                  --             (96,511)
   Net loss                                               --         (33,454,896)       (33,454,896)
   Change in market value of derivative
    instruments                                      (45,407)            (45,407)           (45,407)
   Translation adjustment                           (505,707)           (505,707)          (505,707)
                                                -----------------------------------------------------
Balance, year ended December 31, 2004             $ (494,061)     $  212,964,016
                                                ==================================
Total, December 31, 2004                                                              $ (34,006,010)
                                                                                     ================
See accompanying notes.
</TABLE>


                                       M-5
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                  Year ended December 31
                                                                        2002               2003                2004
                                                                 -------------------------------------------------------
<S>                                                              <C>                 <C>                  <C>
Operating activities
Net loss                                                          $(26,167,484)       $(28,000,470)       $ (33,454,896)
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
   Depreciation and amortization                                    18,235,030          17,942,672           18,454,690
   Equity in losses of MSV Canada                                      373,738           1,030,119              275,000
   Write-off of investment in joint venture                                 --           2,000,000                   --
   Amortization of deferred compensation                                    --                  --              495,153
   Changes in operating assets and liabilities:
     Restricted cash                                                 3,355,184             578,614           (5,001,728)
     Accounts receivable                                               471,009          (1,061,933)             916,694
     Inventory                                                         811,197             711,979              708,325
     Prepaid expenses and other assets                                (353,808)           (941,512)             336,164
     Accounts payable and accrued expenses                           1,076,582             290,671            2,451,337
     Other current liabilities                                      (4,138,827)           (751,514)            (119,672)
     Accrued interest                                                8,571,854           7,384,721          (12,589,396)
     Deferred revenue                                                  723,136           1,274,075           (2,677,326)
                                                                 -------------------------------------------------------
Net cash provided by (used in) operating activities                  2,957,611             457,422          (30,205,655)

Investing activities
Purchase of Motient Satellite business, net of cash
  acquired                                                          (2,200,000)         (2,200,000)                  --
Purchase of property and equipment                                    (840,328)         (1,316,512)          (1,899,224)
Purchase of option to form joint venture                            (1,000,000)         (1,000,000)                  --
Purchase of intangible assets and other assets                              --                  --           (2,000,000)
                                                                 -------------------------------------------------------
Net cash used in investing activities                               (4,040,328)         (4,516,512)          (3,899,224)

Financing activities
Proceeds from issuance of Class A Preferred Units                           --           3,700,000           17,633,333
Proceeds from issuance of Common Units                                      --                  --          145,000,000
Principal payment on notes payable                                          --          (1,575,333)          (2,370,583)
Proceeds from issuance of notes payable to investors                 3,000,000                  --                   --
Proceeds from exercise of stock option in subsidiary                        --                  --                4,261
                                                                 -------------------------------------------------------
Net cash provided by financing activities                            3,000,000           2,124,667          160,267,011

Effect of exchange rates on cash and cash equivalents                  235,076             134,374              (66,248)
                                                                 -------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                 2,152,359          (1,800,049)         126,095,884
Cash and cash equivalents, beginning of period                       3,629,315           5,781,674            3,981,625
                                                                 -------------------------------------------------------
Cash and cash equivalents, end of period                          $  5,781,674        $  3,981,625        $ 130,077,509
                                                                 =======================================================
Supplemental information
Cash paid for interest                                            $      5,553        $  2,124,667        $  21,394,806
                                                                 =======================================================
Non-cash financing information
Equipment obtained through issuance of notes to vendor            $         --        $  1,028,771        $          --
                                                                 =======================================================
Conversion of Notes                                               $         --        $         --        $  84,922,011
                                                                 =======================================================
</TABLE>

See accompanying notes.




                                       M-6
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

                   Notes to Consolidated Financial Statements

                                December 31, 2004

1. Organization and Business

Mobile Satellite Venture LP's predecessor company, Motient Satellite Ventures
LLC, was organized as a limited liability company pursuant to the Delaware
Limited Liability Company Act on June 16, 2000 by Motient Corporation (Motient).
On December 19, 2000, Motient Satellite Ventures LLC changed its name to Mobile
Satellite Ventures LLC (MSV LLC). On November 26, 2001, MSV LLC was converted
into a limited partnership, Mobile Satellite Ventures LP (MSV or the Company),
subject to the laws of the state of Delaware. Concurrent with such conversion,
the Company acquired certain assets and liabilities of the Motient and TMI
Communications LP (TMI) satellite businesses. In connection with its purchase of
TMI's satellite business, the Company acquired a 20% equity interest in Mobile
Satellite Ventures (Canada) Inc. (MSV Canada) and 33-1/3% equity interest in
Mobile Satellite Ventures Holdings (Canada) Inc. (MSV Holdings). In February
2002, the Company established TerreStar Networks, Inc. (TerreStar), a wholly
owned subsidiary, to develop business opportunities related to the planned
receipt of certain licenses in the 2 GHz band (see Note 10).

The Company provides mobile satellite and communications services to individual
and corporate customers in the United States and Canada via its own satellite
and leased satellite capacity. The Company's operations are subject to
significant risks and uncertainties including technological, competitive,
financial, operational, and regulatory risks associated with the wireless
communications business. Uncertainties also exist regarding the Company's
ability to raise additional debt and equity financing and the ultimate
profitability of the Company's proposed next-generation wireless system. The
Company will require substantial additional capital resources to construct its
next-generation wireless system.

The Company's current operating assumptions and projections, which reflect
management's best estimate of future revenue and operating expenses, indicate
that anticipated operating expenditures through 2005 can be met by cash flows
from operations and available working capital; however, the Company's ability to
meet its projections is subject to uncertainties, and there can be no assurance
that the Company's current projections will be accurate. If the Company's cash
requirements are more than projected, the Company may require additional
financing. In addition, a wholly owned subsidiary of the Company entered into a
satellite construction contract (see Note 10) during 2002 and assumed certain
obligations under another system development contract in 2004 (see Note 3) that
may require the Company to obtain additional funding to finance the required
payments unless one or both of the contracts are either amended or terminated by
the Company prior to certain payment due dates. The Company is not planning to

                                       M-7
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



1. Organization and Business (continued)

terminate the contracts, and there can be no assurance that the Company will be
able to enter into amendments that will defer payments in a manner consistent
with the Company's next-generation business plans. The type, timing, and terms
of financing, if required, selected by the Company will be dependent upon the
Company's cash needs, the availability of financing sources, and the prevailing
conditions in the financial markets. There can be no assurance that such
financing will be available to the Company at any given time or available on
favorable terms.

2. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries prepared in accordance with accounting principles
generally accepted in the United States. All significant intercompany accounts
are eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates affecting the consolidated financial
statements include management's judgments regarding the allowance for doubtful
accounts, reserves for inventory, future cash flows expected from long-lived
assets, and accrued expenses for probable losses. Actual results could differ
from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include investments such as money market accounts with
an original maturity of three months or less.


                                       M-8
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2. Significant Accounting Policies (continued)

Restricted Cash

In connection with the purchase of the Motient satellite business, the Company
retained a portion of the purchase price, which was restricted to pay Motient's
rent obligation to the Company for the lease of office space in the Company's
headquarters and to ensure the provision of certain services to the Company by
Motient under a transition services agreement. During the year ended December
31, 2002, the agreement was amended, $1,104,708 was released to Motient, and
$336,060 was released to MSV. During 2003, $530,742 was used to satisfy
Motient's obligations under its sublease with the Company, and $50,708 was
remitted to Motient for services provided to MSV. As of December 31, 2003 and
2004 the restricted cash balance for this purpose was $74,246 and $74,823
respectively.

In September 2004, the Company entered into an escrow agreement to provide for
payments under TerreStar's satellite construction contract (see Note 10). As of
December 31, 2004, the amount in escrow was $5.0 million. If TerreStar
terminates the satellite construction contract, the escrow funds may be returned
to the TerreStar, subject to the termination liability under the contract. The
cash in escrow as of December 31, 2004 is reflected as restricted cash on the
accompanying consolidated balance sheet.

Inventory

Inventories consist of finished goods that are communication devices and are
stated at the lower of cost or market, average cost method. The Company
periodically assesses the market value of its inventory, based on sales trends
and forecasts and technological changes, and records a charge to current-period
income when such factors indicate that a reduction in net realizable value is
appropriate.

Property and Equipment

Property and equipment acquired in business combinations are recorded at their
estimated fair value on the date of acquisition. Purchases of property and
equipment are recorded at cost. Depreciation is computed using the straight-line
method over estimated useful lives, ranging from three to five years. Leasehold
improvements are amortized over the shorter of the estimated useful life of the
asset or the remaining lease term.


                                       M-9
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2. Significant Accounting Policies (continued)

Long-Lived Assets

In accordance with Statement of Financial Accounting Standards (SFAS) No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, the Company
reviews its long-lived assets including property and equipment and intangible
assets other than goodwill, whenever events or changes in circumstances indicate
that the carrying amount of the assets may not be fully recoverable. To
determine the recoverability of its long-lived assets, the Company evaluates the
probability that future estimated undiscounted net cash flows will be less than
the carrying amount of the assets. If such estimated cash flows are less than
the carrying amount of the long-lived assets, then such assets are written down
to their fair value. No impairment charges were recorded in the years ended
December 31, 2002, 2003, or 2004. The Company's estimates of anticipated cash
flows and the remaining estimated useful lives of long-lived assets could be
reduced significantly in the future. As a result, the carrying amount of
long-lived assets may be reduced in the future.

Goodwill

SFAS No. 142, Goodwill and Other Intangible Assets, requires the use of a
non-amortization approach to account for purchased goodwill. Under a
non-amortization approach, goodwill is not amortized into results of operations,
but instead is reviewed for impairment and written down and charged to results
of operations only in the periods in which the recorded value of goodwill is
determined to be more than its estimated fair value. The Company performs its
annual impairment test on December 31 or when certain triggering events occur.
No impairment charges were recorded in the years ended December 31, 2002, 2003,
or 2004.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of cash and cash equivalents and accounts
receivable. The Company maintained cash balances at financial institutions that
exceeded federally insured limits as of December 31, 2004. The Company maintains
its cash and cash equivalents at high-credit-quality institutions, and as a
result, management believes that credit risk related to its cash is not
significant.


                                      M-10
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2. Significant Accounting Policies (continued)

Concentrations of Credit Risk (continued)

The Company generally grants credit to customers on an unsecured basis. The
Company performs ongoing evaluations of probability of collection of amounts
owed to the Company. The Company records an allowance for doubtful accounts
equal to the amount estimated to be potentially uncollectible.

The Company's significant customers, as measured by percentage of total
revenues, were as follows:

                                For the year ended December 31
                         2002               2003                2004
                   ------------------------------------------------------

Customer A               13%                 12%                 *
Customer B               13%                  *                  *
Customer C                *                  11%                 *
Customer D                *                  13%                14%

The Company's significant customers, as measured by percentage of total accounts
receivable, were as follows:

                                         December 31
                              2003                         2004
                   ------------------------------------------------------

Customer C                     *                           12%
Customer D                     *                           12%
Customer E                    14%                           *
Customer F                    12%                          11%

* Customer did not represent more than 10% for the period presented.





                                      M-11
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2. Significant Accounting Policies (continued)

Fair Value of Financial Instruments

SFAS No. 107, Disclosure about Fair Value of Financial Instruments, requires
disclosures regarding the fair value of certain financial instruments. The
carrying amount of the Company's cash and cash equivalents, restricted cash,
accounts receivables, and accounts payable, accrued expenses approximates their
fair value because of the short-term maturity of these instruments. The Company
estimated the fair value of its notes payable using estimated market prices
based upon the current interest rate environment and the remaining term to
maturity. The Company believes the fair value of these liabilities approximates
their carrying value.

Stock-Based Compensation

SFAS No. 123, Accounting for Stock-Based Compensation, encourages, but does not
require, companies to record compensation cost for stock-based employee
compensation plans using the fair value method. The Company has chosen to
account for employee stock-based compensation using the intrinsic value method
as prescribed in Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and its related interpretations.

The following illustrates the effect on net loss if the Company had applied the
fair value method of SFAS No. 123:

<TABLE>
<CAPTION>
                                                                                    December 31
                                                                   2002                2003               2004
                                                        ------------------------------------------------------------
<S>                                                      <C>                  <C>                    <C>
Net loss, as reported                                    $  (26,167,484)      $  (28,000,470)        $  (33,454,896)

Add stock-based employee compensation included in
  reported net loss                                                  --                   --                495,153
Additional stock-based employee compensation expense
  determined under fair value method                           (621,148)          (1,080,385)            (1,952,382)
                                                        ------------------------------------------------------------
Pro forma net loss                                       $  (26,788,632)      $  (29,080,855)        $  (34,912,125)
                                                        ============================================================
</TABLE>


                                      M-12
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2. Significant Accounting Policies (continued)

Stock-Based Compensation (continued)

In accordance with SFAS No. 123, the fair value of the options granted was
estimated at the grant date using an option-pricing model with the following
weighted-average assumptions: risk-free interest rates ranging from 2.7% to
4.6%, no dividends, expected life of the options of five years, and no
volatility.

Income Taxes

As a limited partnership, the Company is not subject to income tax directly.
Rather, each unit holder is subject to income taxation based on the unit
holder's portion of the Company's income or loss as defined in the limited
partnership agreement.

Revenue Recognition

The Company generates revenue primarily through the sale of wireless airtime
service and equipment. The Company recognizes revenue when the services are
performed or delivery has occurred, evidence of an arrangement exists, the fee
is fixed and determinable, and collectibility is probable. The Company receives
activation fees related to initial registration for retail customers. Revenue
from activation fees is deferred and recognized ratably over the customer's
contractual service period, generally one year. The Company records equipment
sales upon transfer of title and accordingly recognizes revenue upon shipment to
the customer.

Derivatives

The Company accounts for derivatives in accordance with SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities, as amended, which requires
the recognition of all derivatives as either assets or liabilities measured at
fair value with changes in fair value of derivatives other than hedges reflected
as current-period income (loss) unless the derivatives qualify as hedges of
future cash flows. For derivatives qualifying as hedges of future cash flows,
the effective portion of changes in fair value is recorded temporarily in equity
and then recognized in earnings along with the related effects of the hedged
items. Any ineffective portion of hedges is reported in earnings as it occurs.



                                      M-13
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2. Significant Accounting Policies (continued)

Derivatives (continued)

In the normal course of business, the Company is exposed to the impact of
fluctuations in the exchange rate with the Canadian dollar. The Company limits
this risk by following an established foreign currency financial management
policy. This policy provides for the use of forward and option contracts, which
limit the effects of exchange rate fluctuations of the Canadian dollar on
financial results. The Company does not use derivatives for trading or
speculative purposes.

As of December 31, 2003 and 2004, the Company hedged aggregate exposures of $2.8
million and $2.2 million, respectively, by entering into forward contracts and
option contracts, respectively. In general, these contracts have varying
maturities up to, but not exceeding, one year with cash settlements made at
maturity based upon rates agreed to at contract inception. All derivatives held
by the Company satisfy the hedge criteria of SFAS No. 133, and therefore, the
Company recorded unrealized gains on these contracts of $81,712 and $36,305 for
the years ended December 31, 2003 and 2004, respectively, which are reflected as
a component of accumulated other comprehensive income and an asset within
prepaid expenses and other current assets on the accompanying consolidated
balance sheets.

Equity Method Investments

The Company accounts for its equity investments in MSV Canada and MSV Holdings
pursuant to the equity method of accounting. The carrying value of these
investments was $0 at each balance sheet date presented. Because the Company is
obligated to provide working capital financial support to MSV Canada through a
management agreement, the Company records losses related to such funding as
equity in losses of MSV Canada in the accompanying consolidated statements of
operations.

Foreign Currency and International Operations

The functional currency of one of the Company's subsidiaries is the Canadian
dollar. The financial statements of this subsidiary are translated to U.S.
dollars using period-end rates for assets and liabilities, which is included as
a component of accumulated other comprehensive income in the accompanying
consolidated balance sheets. In addition, the Company realized foreign exchange
transaction (losses) gains, which are a component of other income in the
accompanying consolidated statements of operations. For the years ended December
31, 2002, 2003, and 2004, foreign exchange transaction (losses) gains were
$(266,507), $444,753, and $40,858, respectively.



                                      M-14
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2. Significant Accounting Policies (continued)

Comprehensive Income (Loss)

The Company reports comprehensive income (loss) in accordance with SFAS No. 130,
Reporting Comprehensive Income, which establishes rules for the reporting and
display of comprehensive income and its components. SFAS No. 130 requires
foreign currency translation adjustments and the change in market value of
effective derivative instruments to be included in other comprehensive income.

Recent Pronouncements

In January 2003, the FASB issued Financial Interpretation No. 46 (FIN),
Consolidation of Variable Interest Entities, an Interpretation of Accounting
Research Bulletin No. 51, which requires the consolidation of an entity in which
an enterprise absorbs a majority of the entity's expected losses, receives a
majority of the entity's expected residual returns, or both, as a result of
ownership or contractual or other financial interests in the entity. Generally,
an entity is generally consolidated by an enterprise when the enterprise has a
controlling financial interest in the entity through ownership of a majority
voting interest in the entity. The Company is currently evaluating the impact of
adoption of FIN 46, with respect to its investment and related obligations in
MSV Canada. Adoption of this standard will be required for the first annual
period beginning after December 15, 2004. MSV Canada's net (loss) income for the
years ended December 31, 2003 and 2004 were approximately $(696,000) and $1.4
million (unaudited), respectively.

In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which is
a revision of SFAS No. 123, supersedes APB Opinion No. 25, and amends SFAS No.
95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is
similar to the approach described in SFAS No. 123. However, SFAS No. 123(R)
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the income statement based on their fair
values. Pro forma disclosure is no longer an alternative. The new standard will
be effective for the Company for the year ending December 31, 2006. The impact
of the adoption of SFAS No. 123(R) cannot be predicted at this time because it
will depend on levels of share-based payments granted in the future. However,
had we adopted SFAS No. 123(R) in prior periods, the impact of that standard
would have approximated the impact of SFAS No. 123 as described in the
disclosure of pro forma net loss.



                                      M-15
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2. Significant Accounting Policies (continued)

Reclassifications

Certain prior-year amounts have been reclassified to conform to the current-year
presentation.

3. Intangible Assets and Goodwill

The Company's intangible assets and goodwill arose primarily as a result of the
Company's 2001 acquisitions of the Motient and TMI satellite businesses. These
transactions were accounted for using the purchase method of accounting. At the
time of the acquisitions, the Company allocated the purchase price to the assets
acquired and liabilities assumed on a preliminary basis based on their
respective estimated fair values. During 2002, the Company revised its purchase
price allocation based upon changes in estimates related primarily to certain
liabilities assumed in the acquisition. In addition, under the terms of the
agreement, the Company paid a total of $6.6 million through December 31, 2003,
of which $2.2 million was paid in each of the years ended December 31, 2002 and
2003, in contingent consideration to Motient for the provision of services to a
customer under a contract assumed by the Company. These payments were accounted
for as contingent consideration and were included in the determination of the
purchase price when paid to Motient. As of December 31, 2003, there were no
contingent purchase payments remaining.

In July 2004, MSV purchased certain intangible assets including intellectual
property and rights, or rights to acquire spectrum access and rights, or rights
to acquire related assets from third parties. At the time of these transactions,
MSV paid $2.0 million in cash, of which $1.5 million is included in other assets
and $500,000 is included in intangible assets as of December 31, 2004 in the
accompanying consolidated balance sheet. Future payments under these agreements
total $2.0 million payable in two equal annual installments in January 2005 and
2006. As the payments are due only upon the achievement of certain milestones,
the future obligations have not been accrued as of December 31, 2004.

In connection with these transactions, MSV also acquired rights related to a
system development contract in exchange for MSV's assumption of certain payments
through January 2005. As of December 31, 2004, payments on this contract totaled
$1.1 million with additional payments of $50,000 committed through January 2005.
MSV may continue payments on this contract at its sole discretion following
these initial payments. Payments made through December 31, 2004 have been
capitalized as system under construction in property and equipment in the
accompanying consolidated balance sheet.



                                      M-16
<PAGE>


                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


3. Intangible Assets and Goodwill (continued)

The Company's identifiable intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                          December 31
                                                    2003               2004
                                             -------------------------------------

<S>                                           <C>                  <C>
Customer contracts                            $  18,092,565        $  18,177,727
Next-generation intellectual property            82,350,000           82,850,000
                                             -------------------------------------
                                                100,442,565          101,027,727
Accumulated amortization                        (19,769,360)         (29,321,408)
                                             -------------------------------------
Intangible assets, net                        $  80,673,205        $  71,706,319
                                             =====================================
</TABLE>

Customer contracts are amortized over a period ranging from 4.5 to 5 years.
Next-generation intellectual property is amortized over periods ranging from 4.5
to 15 years. During the years ended December 31, 2002, 2003, and 2004, the
Company recorded approximately $9,401,000, $9,427,000, and $9,494,000,
respectively, of amortization expense related to these intangible assets. The
Company's next-generation intellectual property consists of a combination of
licenses and contractual rights to various authorizations, various applications,
certain technology, and certain other rights, which resulted primarily from the
2001 acquisitions.

Future amortization of intangible assets is as follows as of December 31, 2004:

           2005                                    $   9,571,931
           2006                                        7,520,535
           2007                                        5,601,111
           2008                                        5,601,111
           2009                                        5,490,000
           Thereafter                                 37,921,631
                                                   -------------
                                                   $  71,706,319
                                                   =============


The increase in goodwill from December 31, 2003 to December 31, 2004 is
primarily a result of the fluctuation of the exchange rate between the U.S.
dollar and Canadian dollar.


                                      M-17
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


4. Balance Sheet Details

Property and equipment

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
                                                                  December 31
                                                             2003            2004
                                                       -----------------------------
<S>                                                    <C>             <C>
Space and ground segments                              $ 39,771,813    $ 40,577,825
System under construction                                   850,000       2,405,261
Office equipment and furniture                              836,961         927,112
Leasehold improvements                                      300,000         434,832
                                                       -----------------------------
                                                         41,758,774      44,345,030
Accumulated depreciation                                (18,160,201)    (27,886,614)
                                                       -----------------------------
Property and equipment, net                            $ 23,598,573    $ 16,458,416
                                                       =============================
</TABLE>

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:

<TABLE>
<CAPTION>
                                                                 December 31
                                                              2003         2004
                                                       -----------------------------
<S>                                                     <C>            <C>
Accounts payable                                        $  1,006,375   $  2,557,232
Accrued expenses                                           1,276,208      1,487,783
Accrued compensation and benefits                          1,680,210      2,230,936
Accrued interest                                             283,749        343,113
                                                       -----------------------------
Total accounts payable and accrued expenses             $  4,246,542   $  6,619,064
                                                       =============================
</TABLE>

5. Long-Term Debt

Notes Payable

In November 2001, the Company issued $55.0 million of Convertible Notes and
$26.5 million of Non-Convertible Notes, (collectively, the Notes) to finance the
acquisitions of the Motient and TMI satellite businesses. In August 2002, the
Company issued an additional $3.0 million of Convertible Notes. The Notes were
scheduled to mature on November 26, 2006 and bore interest at 10% per annum,
compounded semiannually and payable at maturity.


                                      M-18
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


5. Long-Term Debt (continued)

Notes Payable (continued)

The Convertible Notes were convertible, at any time, into a number of the
Company's Class A Preferred Units (Preferred Units) determined by dividing the
principal being converted by $6.45. The terms of the Convertible Notes were
amended during 2003 to automatically convert into Preferred Units upon the
Company's payment in full of the principal and accrued interest on the
Non-Convertible Notes and the accrued interest on the Convertible Notes.

In August 2003, the Company repaid approximately $1.6 million of the principal,
and all of the accrued interest of approximately $2.1 million, on one of the
Non-Convertible Notes.

Long-term debt at December 31, 2003 consisted of the following:

            Convertible Notes                             $  58,000,000
            Non-Convertible Notes                            24,924,667
                                                          -------------
            Notes payable                                 $  82,924,667
                                                          =============



In April 2004, the Company made payments totaling approximately $2.4 million for
principal and $2.6 million for accrued interest, on the Non-Convertible Notes.
In November 2004, $25.9 million of Non-Convertible Notes and accrued interest
were exchanged for 878,115 Common Units of MSV. The principal balance of $22.6
million and accrued interest of $3.3 million were converted into 765,843 and
112,272 Common Units, respectively, and approximately $56,000 of accrued
interest was paid in cash. Additionally, $58.0 million of Convertible Notes was
converted to 8,997,073 Class A Preferred Units in accordance with their terms.
At the date of the transaction, accrued interest on the Convertible Notes was
approximately $19.2 million, of which $18.2 million was paid in cash and $1.0
million was exchanged for 36,045 Common Units (see Note 6). At the completion of
this transaction, all outstanding principal and interest obligations on the
Notes were extinguished.



                                      M-19
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


5. Long-Term Debt (continued)

Vendor Notes Payable

In February 2003, the Company entered into an agreement with a satellite
communications provider that is a related party (the Vendor) for the
construction and procurement of a ground station. The Vendor provided financing
for this project totaling approximately $1.0 million at an interest rate of
9.5%.

Future payments on the Vendor note payable as of December 31, 2004 are as
follows:

           2005                                        $  279,523
           2006                                           279,523
           2007                                           279,523
           2008                                           232,936
                                                      -----------
           Total future payments                        1,071,505
           Less: interest                                (169,945)
                                                      -----------
           Principal portion                              901,560
           Less: current portion                         (205,846)
                                                      -----------
           Long-term portion of vendor note payable    $  695,714
                                                      ===========

6. Partners' Equity

Effective November 26, 2001, pursuant to the Limited Partnership Agreement of
the Company, the partners' interests in the Company were either MSV Common Units
or MSV Class A Preferred Units. The Company's general partner, Mobile Satellite
Ventures GP Inc., a Delaware corporation, has no economic interest in the
Company and is owned by the Company's limited partners in proportion to their
fully diluted interests in the Company.

The Class A Preferred Units and Common Units had many of the same rights and
privileges, except the Class A Preferred Units had preference over the Common
Units in receiving proceeds resulting from a distribution of assets in certain
circumstances. The general partner did not hold any units as of December 31,
2002, 2003, and 2004. As of December 31, 2002, 2003, and 2004, there were
14,642,732, 14,642,732, and 34,786,823 Common Units, respectively, held by
limited partners. As of December 31, 2002 and 2003, there were 2,000,000 and
2,573,951 Class A Preferred Units, respectively, held by limited partners. In
November 2004, the Company's limited partnership agreement was amended to
eliminate the distinction between Preferred and Common Units, and all Preferred
Units were converted to Common Units.


                                      M-20
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


6. Partners' Equity (continued)

Effective November 26, 2001, profits and losses are allocated to the partners in
proportion to their economic interests. Losses allocated to any partner for any
fiscal year will not exceed the maximum amount of losses that may be allocated
to such partner without causing such partner to have an adjusted capital account
deficit at the end of such fiscal year. Any losses in excess of this limitation
shall be specially allocated solely to the other partners. Thereafter,
subsequent profits shall be allocated to reverse any such losses specially
allocated pursuant to the preceding sentence. Except for certain capital
proceeds and upon liquidation, the Company shall make distributions as
determined by the Board of Directors to the partners in proportion to their
respective percentage interests. Upon dissolution of the Company, a liquidating
trustee shall be appointed by the Board, or under certain circumstances, the
required investor majority, as defined, who shall immediately commence to wind
up the Company's affairs. The proceeds of liquidation shall be distributed in
the following order:

o    First, to creditors of the Company, including partners, in the order
     provided by law

o    Thereafter, to the partners in the same order as other distributions

Issuance of Class A Preferred Units

In August 2003, the Company received $3.7 million in exchange for the issuance
of 573,951 Class A Preferred Units at $6.45 per unit. The Company used these
funds to repay approximately $1.6 million of the principal and approximately
$2.1 million of accrued interest on one of the Non-Convertible Notes (see Note
5). In April 2004, the Company received $17.6 million in exchange for the
issuance of 2,735,317 of Class A Preferred Units. The Company used a portion of
the proceeds to repay approximately $2.4 million of the principal balance and
approximately $2.6 million of accrued interest on Non-Convertible Notes (see
Note 5).

Issuance of Common Units

In November 2004, the Company received $145.0 million in proceeds from its
existing investors in exchange for the issuance of 4,923,599 Common Units.
Concurrently, $25.9 million of Non-Convertible Notes and accrued interest was
exchanged for 878,115 Common Units. The principal balance of $22.6 million and
accrued interest of $3.3 million were converted into 765,843 and 112,272 Common
Units, respectively and approximately $56,000 was paid in cash. Additionally,
$58.0 million of Convertible Notes was converted to 8,997,073 Class A Preferred



                                      M-21
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


6. Partners' Equity (continued)

Issuance of Common Units (continued)

Units in accordance with their terms.  At the date of the transaction, accrued
interest on the Convertible Notes was approximately $19.2 million, of which
$18.2 million was paid in cash and $1.0 million was exchanged for 36,045 Common
Units.

7. Unit Option Plans

MSV Option Plan

In December 2001, the Company adopted a unit option incentive plan (Unit Option
Incentive Plan). Under the Unit Option Incentive Plan, the Company reserved for
issuance and may grant up to 5,000,000 options to acquire units to employees and
directors upon approval by the Board of Directors. Options to acquire units
generally vest over a 3-year period and have a 10-year life.

During 2004, the Company granted options at less than the estimated fair market
value of the related units on the option's grant date. As a result, the Company
recorded $4,680,375 in deferred compensation during the year ended December 31,
2004. The deferred compensation is being amortized over the options' vesting
period. For the year ended December 31, 2004, the Company recognized
compensation expense of $495,153.

The Company has promised to grant an additional 285,000 options during the year
ended December 31, 2005 to certain executives of the Company, of which 200,000
will have an exercise price of the lower of $6.45 or the price at which the most
recent financing transaction has occurred, and 85,000 will have an exercise
price of $6.45.

At December 31, 2003 and 2004, 885,333 and 1,807,167 options, respectively, were
exercisable. At December 31, 2003 and 2004, the weighted-average remaining
contractual life for outstanding options was 7.9 years and 8.1 years,
respectively. The weighted-average fair value of unit options granted during the
years ended December 31, 2002, 2003, and 2004 was $0.80, $0.91, and $4.61 per
unit, respectively. At December 31, 2004, the outstanding options had exercise
prices ranging from $6.45 to $29.45.



                                      M-22
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

7. Unit Option Plans (continued)

MSV Option Plan (continued)

The following summarizes activity in the Unit Incentive Option Plan:

<TABLE>
<CAPTION>
                                                            Options to       Weighted-Average
                                                           Acquire Units      Exercise Price
                                                         --------------------------------------
<S>                                                          <C>                  <C>
Options outstanding at December 31, 2001                     1,297,500            $ 6.45
   Granted                                                      91,000              6.45
                                                         --------------------------------------
Options outstanding at December 31, 2002                     1,388,500              6.45
   Granted                                                   1,648,500              6.45
   Canceled                                                   (117,166)             6.45
                                                         --------------------------------------
Options outstanding at December 31, 2003                     2,919,834              6.45
   Granted                                                   1,491,250              6.94
   Canceled                                                   (105,001)             6.45
                                                         --------------------------------------
Options outstanding at December 31, 2004                     4,306,083            $ 6.58
                                                         ======================================
</TABLE>

TerreStar Option Plan

In July 2002, the Board of Directors of TerreStar approved the 2002 TerreStar
Stock Incentive Plan. The plan terms are similar to the Unit Option Incentive
Plan. Options to acquire shares generally vest over a 3-year period, and the
options to acquire units have a 10-year life. At December 31, 2003 and 2004,
568,304 and 1,157,664 options, respectively, were exercisable. At December 31,
2003 and 2004, the weighted-average remaining contractual life for outstanding
options was 8.6 and 8.0 years, respectively. The weighted-average fair value of
unit options granted during the years ended December 31, 2002, 2003, and 2004
was $0.10, $0.10, and $0.00 per unit, respectively.

As part of the TerreStar Rights transaction (see Note 10), the Board of
Directors of TerreStar authorized a grant of additional options to employee
option holders of record at December 20, 2004 of approximately 50% of the
options outstanding on that date. These options are expected to be granted in
2005.


                                      M-23
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


7. Unit Option Plans (continued)

TerreStar Option Plan (continued)

The following summarizes activity in the TerreStar Option Plan:

<TABLE>
<CAPTION>
                                                                              Weighted-Average
                                                          Options to         Exercise Price per
                                                         Acquire Shares            Share
                                                       ---------------------------------------
<S>                                                     <C>                       <C>
Options outstanding at December 31, 2001                          --              $    --
   Granted                                                 1,781,596                 0.70
                                                       ---------------------------------------
Options outstanding at December 31, 2002                   1,781,596                 0.70
   Granted                                                   125,980                 0.70
   Canceled                                                  (36,517)                0.70
                                                       ---------------------------------------
Options outstanding at December 31, 2003                   1,871,059                 0.70
   Granted                                                   533,817                 0.66
   Canceled                                                  (19,477)                0.70
   Exercised                                                  (6,086)                0.70
                                                       ---------------------------------------
Options outstanding at December 31, 2004                   2,379,313              $  0.69
                                                       =======================================
</TABLE>

8. Related Party Transactions

During the years ended December 31, 2002, 2003, and 2004, the Company incurred
$1,441,673, $150,966, and $1,180 of administrative expenses related primarily to
services provided by Motient. In addition, the Company provided
facilities-related services to Motient of $133,729 during the year ended
December 31, 2003.

The Company has an arrangement with MSV Canada, under which the Company provides
management services to MSV Canada and purchases satellite capacity from MSV
Canada. MSV Canada owns the satellite formerly owned by TMI. The Company earns
revenues under the management agreement by providing certain services to MSV
Canada such as allowing access to its intellectual property; providing voice-
and data-switching capabilities; providing backup, restoral, and emergency
spectrum and satellite capacity and providing accounting, customer service, and
billing services. The Company recognizes the related management fee income in
the month in which the services are provided.


                                      M-24
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


8. Related Party Transactions (continued)

The Company leases satellite capacity from MSV Canada pursuant to a lease
agreement. The term of the lease extends for 25 years and may be terminated by
the Company with one year's notice or by either party in certain circumstances.
The amount of the lease payments is determined by the parties periodically based
upon the amount of capacity usage by the Company and market rates. Payments due
under the lease may be offset against amounts owed to the Company.

During the years ended December 31, 2002, 2003, and 2004, the Company incurred
$117,000, $36,025, and $188,682, respectively, of consulting expenses for
services provided by a company controlled by one of the Company's investors,
which is included in legal, regulatory, and consulting expenses in the
accompanying consolidated statements of operations.

The Company leases office space from an affiliate of TMI (see Note 9). The
Company has also entered into an agreement with this company to obtain
telemetry, tracking, and control services. The agreement ends April 30, 2006,
with automatic extension for three successive additional renewal periods of one
year each. The agreement may be terminated at any time, provided that the
Company makes a payment equal to the lesser of 12 months of service or the
remaining service fee. Under its services agreement, the Company paid $378,462,
$360,819, and $428,867, during the years ended December 31, 2002, 2003, and
2004, respectively.

9. Commitments and Contingencies

Leases

As of December 31, 2004, the Company has noncancelable operating leases,
expiring through August 2008. Rental expense, net of sublease income, for the
years ended December 31, 2002, 2003, and 2004, was approximately $1,800,000,
$1,100,000, and $1,200,000, respectively.

Future minimum lease payments under noncancelable operating leases with initial
terms of one year or more are as follows for the years ended December 31:

                 2005                          1,289,236
                 2006                          1,282,417
                 2007                          1,282,417
                 2008                            936,757
                                            ------------
                                            $  4,790,827
                                            ============



                                      M-25
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


9. Commitments and Contingencies (continued)

Leases (continued)

Office facility leases may provide for periodic escalations of rent, rent
abatements during specified periods of the lease, and payment of pro rata
portions of building operating expenses, as defined. The Company records rent
expense for operating leases using the straight-line method over the term of the
lease agreement.

Litigation and Claims

The Company is periodically a party to lawsuits and claims in the normal course
of business. While the outcome of the lawsuits and claims against the Company
cannot be predicted with certainty, management believes that the ultimate
resolution of the matters will not have a material adverse effect on the
financial position or results of operations of the Company.

Contingencies

From time to time, the Company may have certain contingent liabilities that
arise in the ordinary course of its business activities. The Company recognizes
a liability for these contingencies when it is probable that future expenditures
will be made and such expenditures can be reasonably estimated.

Regulatory Matters

During 2001, Motient applied to the FCC to transfer licenses and authorizations
related to its L-Band mobile satellite service (MSS) system to MSV. Such
transfer was approved in November 2001. In connection with this application,
Motient sought FCC authority to launch and operate a next-generation MSS system
that will include the deployment of satellites and terrestrial base stations
operating in the same frequencies as an integrated network. In February 2003,
the FCC adopted general rules based on the Company's proposal to develop an
integrated satellite-terrestrial system, subject to the requirement that the
Company file an additional application for a specific terrestrial component
consistent with the broader guidelines issued in the February 2003 ruling. These
broad guidelines govern issues such as aggregate system interference to other
MSS operators, the level of integration between satellite and terrestrial
service offerings, and specific requirements of the satellite component that the
Company currently meets by virtue of its existing satellite system. While the
Company's current satellite assets satisfy these requirements, the Company
anticipates the future need to construct and deploy more powerful satellites.


                                      M-26
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

9. Commitments and Contingencies (continued)

Regulatory Matters (continued)

The Company believes that the ruling allows for significant commercial
opportunity related to the Company's next-generation system. Both proponents and
opponents of the Ancillary Terrestrial Component (ATC), including the Company,
asked the FCC to reconsider the rules adopted in the February 2003 order.
Opponents of the ruling advocated changes that could adversely impact the
Company's business plans. The Company also sought certain corrections and
relaxations of technical standards that would further enhance the commercial
viability of the next-generation system. Moreover, one terrestrial wireless
carrier has filed an appeal of the FCC's decision with the United States Court
of Appeals, which has been held in abeyance until the FCC rules on the
reconsideration requests.

In November 2003, the Company applied for authority to operate ATC in
conjunction with the current and next-generation satellites of MSV and MSV
Canada. The FCC's International Bureau granted this authorization, in part, in
November 2004 and deferred certain issues to the FCC's rulemaking proceeding,
which, as noted above, is in its reconsideration phase. One opponent of the
Company's application has asked the FCC to review the Company's ATC
authorization.

The FCC adopted a decision on reconsideration in the rulemaking phase in
February 2005, but the decision has not been released to the public. Based on
public statements made by the FCC commissioners and staff, the Company believes
that the FCC has granted some of the corrections and relaxations of technical
standards the Company has advocated and has rejected the requests for changes
advocated by opponents of the FCC's February 2003 ruling. The appeal by a
terrestrial wireless carrier of the February 2003 ruling is still pending before
the U.S. Court of Appeals.

There can be no assurance that, following the conclusion of the rulemaking and
the other legal challenges, the Company will have authority to operate a
commercially viable next-generation network.

10. TerreStar Networks

In February 2002, the Company established TerreStar, a wholly owned subsidiary,
to develop business opportunities related to the proposed receipt of certain
licenses in the 2 GHz band.


                                      M-27
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



10. TerreStar Networks (continued)

Regulatory Matters

TMI holds the approval issued by Industry Canada for a 2 GHz space station
authorization and related spectrum licenses for the provision of MSS in the 2
GHz band as well as an authorization from the FCC for the provision of MSS in
the 2 GHz band (MSS authorization). These authorizations are subject to FCC and
Industry Canada milestones relating to construction, launch, and operational
date of the system. TMI plans to transfer the Canadian authorizations to an
entity that is eligible to hold the Canadian authorizations and in which
TerreStar and/or TMI will have an interest, subject to obtaining the necessary
Canadian regulatory approvals. In order to satisfy the milestone requirements
included within the authorizations, TerreStar and TMI entered into an agreement
in which TerreStar agreed to enter into a non-contingent satellite procurement
contract for the construction and delivery to TMI of a satellite that is
consistent with the Canadian and FCC authorizations. Further, TMI agreed that at
TerreStar's election, TMI will transfer the 2 GHz assets to the entities
described above, subject to any necessary Canadian and U.S. regulatory
approvals. In December 2002, TMI and TerreStar jointly applied to the FCC for
authority to transfer TMI's MSS authorization to TerreStar.

In August 2002, Industry Canada advised the Company that this arrangement met
the requirement that TMI demonstrate that it is bound to a contractual agreement
for the construction of the proposed satellite. However, certain wireless
carriers had urged the FCC to cancel TMI's MSS authorization. A similar group
also filed a petition in January 2003 asking the FCC to dismiss the application
to transfer TMI's MSS authorization to TerreStar. In February 2003, the FCC's
International Bureau adopted an order canceling TMI's MSS authorization due to
an alleged failure to enter into a non-contingent satellite construction
contract before the specified first milestone date and dismissing the
application for TMI to transfer its MSS authorization to TerreStar. Also in
February 2003, the FCC adopted an order allowing MSS carriers, including those
in the 2 GHz band, to provide ATC. A number of parties, principally wireless
carriers, have challenged the validity of that order (see Note 9).

In June 2004, upon review of the International Bureau's decision, the FCC agreed
to waive aspects of the first milestone requirement applicable to TMI's MSS
authorization and, therefore, also reinstated that authorization, along with the
application to transfer TMI's MSS authorization to TerreStar. The FCC also
modified the milestone schedule applicable to TMI's MSS authorization. TMI
recently certified to the FCC its compliance with the second milestone under its
MSS authorization. In March 2005, TMI will be required to certify compliance
with the third milestone under its MSS authorization. The FCC is currently


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                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10. TerreStar Networks (continued)

Regulatory Matters (continued)

reviewing that certification for compliance with the requirements of TMI's MSS
authorization. The application to transfer TMI's MSS authorization to TerreStar
is still pending before the FCC.

In September 2004, the FCC issued an order allowing PCS operation in the
1995-2000 MHz band, which may be adjacent to the 2 GHz frequencies ultimately
assigned to TMI. TerreStar has commented in the proceedings to establish service
rules for the 1995-2000 MHz band. There can be no assurance that the FCC will
not adopt service rules that will create interference to MSS operators in the 2
GHz band, including TerreStar.

Joint Venture Option

During 2002, TerreStar acquired an option to establish a joint venture with a
third party to develop certain opportunities in the 2 GHz band. The FCC licensed
the third party to construct, launch, and operate a communications system
consisting of two geostationary satellites in the 2 GHz band, a communications
network, and user terminals. Consideration for the option consisted of
nonrefundable payments made by TerreStar of $1.0 million during 2002 and
$500,000 during 2003. In January 2003, TerreStar exercised its option to form
the joint venture. Under the terms of the memorandum of agreement, TerreStar
contributed an additional $500,000 to the joint venture upon signing of the
joint venture agreements. However, as a result of the February 2003 FCC order
canceling TMI's 2 GHz license described above, in July 2003 TerreStar and the
third party mutually agreed to terminate the option agreement and the joint
venture and any remaining obligations or liabilities related to these
agreements. As a result, TerreStar wrote off its $2.0 million investment in the
joint venture during the year ended December 31, 2003.

Satellite Construction Contract

During 2002 and in connection with its contractual obligations to TMI, TerreStar
entered into a contract to purchase a satellite system, including certain ground
infrastructure for use with the 2 GHz band. TerreStar continues to make payments
according to a milestone payment plan. TerreStar made payments of $500,000 and
$350,000 during the years ended December 31, 2002 and 2003, respectively.



                                      M-29
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



10. TerreStar Networks (continued)

Satellite Construction Contract (continued)

Following the reinstatement of the TMI license in July 2004, the contract was
amended resulting in a reduced milestone payment plan. TerreStar made payments
of $400,000 during the year ended December 31, 2004 related to this contract.
Such payments have been capitalized as system under construction in property and
equipment in the accompanying consolidated balance sheets. The satellite
manufacturer may also be entitled to certain incentive payments based upon the
performance of the satellite once in operation. If TerreStar terminates the
contract, the manufacturer shall be entitled to payment of a termination
liability as prescribed in the contract. Beginning in 2005, the termination
liability will be equal to amounts that would have otherwise been due on
milestones scheduled within 30 days following notice of termination by
TerreStar. The satellite represents one component of a communications system
that would include ground-switching infrastructure, launch costs, and insurance.
Total cost of this system could exceed $500 million. In order to finance future
payments, TerreStar will be required to obtain additional debt or equity
financing, or may enter into various joint ventures to share the cost of
development. There can be no assurance that such financing or joint venture
opportunities will be available to TerreStar or available on terms acceptable to
TerreStar.

TerreStar Rights Transaction

On December 20, 2004, the Company issued rights (the Rights) to receive an
aggregate of 23,265,428 shares of common stock of TerreStar representing all of
the shares of TerreStar common stock (the TerreStar Stock), owned by the
Company, to the limited partners of the Company, pro rata in accordance with
each limited partner's percentage ownership in the Company. The Rights will be
exchanged into shares of TerreStar Stock automatically on May 20, 2005. The
Rights will be accounted for as a distribution on the date of the exchange. In
addition, in connection with this transaction, TerreStar issued warrants (the
Warrants) to purchase an aggregate of 666,972 shares of TerreStar Stock to one
of the Company's limited partners. The Warrants have an exercise price of
$0.21491 per share and may be exercised until the second anniversary of the date
of their issuance. The Company recognized as minority interest the fair value of
the Warrants using an option-pricing model with the following assumptions:
risk-free interest rate of 2.5%, expected life of the warrant of two years, and
volatility of 141%.


                                      M-30
<PAGE>



                  Mobile Satellite Ventures LP and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



10. TerreStar Networks (continued)

TerreStar Rights Transaction (continued)

Concurrent with these transactions, the Board of Directors of TerreStar
authorized a grant of additional options to employee option holders of record at
December 20, 2004 of approximately 50% of the options outstanding on that date,
which are expected to be granted in 2005.

11. Subsequent Events

In January 2005, the Company purchased certain intangible assets including
intellectual property and rights, rights to acquire spectrum access and rights,
or rights to acquire related assets from third parties for $3.0 million. The
terms of the agreement allow the parties to renegotiate the form of payment to
exchange up to $2.0 million of the cash consideration for equity interests in
the Company.

On January 10, 2005 the FCC's International Bureau authorized MSV to launch and
operate an L-Band MSS system. The International Bureau requires all new grants
for systems to be supported by a performance bond. In accordance with this
requirement, the Company secured a five-year, $3.0 million bond. The bond was
fully collateralized by a $3.0 million letter of credit secured by cash on
deposit.





                                      M-31