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

                                   FORM 10-Q


                 /x/ Quarterly report pursuant to Section 13 or
                     15(d) of the Securities Exchange Act of 1934
                     for the period ended September 30, 2005, or


 / / Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

                        Commission file number 000-13865

                         SKYTERRA COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                             23-2368845
    (State or other jurisdiction                  (I.R.S. Employer
 of incorporation or organization)              Identification Number)

        19 West 44th Street, Suite 507
           New York, New York                           10036
    (Address of principal executive offices)          (Zip Code)

       Registrant's telephone number, including area code: (212) 730-7540

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 periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                             Yes /x/ No / /

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                             Yes / / No /x/

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                             Yes / / No /x/

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

As of November 14, 2005, 8,718,309 shares of the registrant's voting common
stock and 8,990,212 shares of the registrant's non-voting common stock were
outstanding.

<PAGE>

                         SKYTERRA COMMUNICATIONS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share data)
                                  (unaudited)
<TABLE>
<CAPTION>

                                                                                         September 30,       December 31,
                                                                                             2005                2004
                                                                                        ----------------    ----------------
                                        Assets
Current assets:
<S>                                                                                             <C>                 <C>
   Cash and cash equivalents                                                                    $23,231             $34,759
   Short-term investments                                                                        10,498              59,748
                                                                                        ----------------    ----------------
     Total cash, cash equivalents and short-term investments                                     33,729              94,507
   Accounts receivable, net                                                                          69                  29
   Prepaid expenses                                                                                  87                 452
   Investments in affiliates                                                                        918                 650
   Deferred transaction costs                                                                         -               4,989
   Other current assets                                                                             504                 399
                                                                                        ----------------    ----------------
     Total current assets                                                                        35,307             101,026

Investment in Hughes Network Systems, LLC                                                        68,047                   -
Investment in Mobile Satellite Ventures LP                                                       44,411              50,098
Investments in affiliates                                                                         1,631               2,711
Restricted cash                                                                                   3,060                   -
Property and equipment, net                                                                          69                 605
Other assets                                                                                        120                 130
                                                                                        ----------------    ----------------
       Total assets                                                                            $152,645            $154,570
                                                                                        ================    ================

                          Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                                                                              $2,714              $2,210
   Accrued liabilities                                                                            1,595               8,281
   Short-term borrowing                                                                             228                   -
   Deferred revenue                                                                                   -                  21
                                                                                        ----------------    ----------------
     Total current liabilities                                                                    4,537              10,512
                                                                                        ----------------    ----------------
Commitments and contingencies

Minority interest                                                                                 8,808               9,974
                                                                                        ----------------    ----------------
Series A Redeemable Convertible Preferred Stock, $.01 par value, net of
   unamortized discount of $29,293 and $32,589, respectively                                     92,002              88,706
                                                                                        ----------------    ----------------
Stockholders' equity:
   Preferred stock, $.01 par value. Authorized 10,000,000 shares; issued
     1,199,007 shares as Series A Redeemable Convertible Preferred Stock at
     September 30, 2005 and December 31, 2004                                                         -                   -
   Common stock, $.01 par value.  Authorized 200,000,000 shares; issued and
     outstanding 8,717,309 shares at September 30, 2005 and 8,384,809 shares at
     December 31, 2004                                                                               87                  84
   Non-voting common stock, $.01 par value.  Authorized 100,000,000 shares; issued
     and outstanding 8,990,212 shares at each of September 30, 2005 and December 31,
     2004                                                                                            90                  90
   Additional paid-in capital                                                                   475,736             475,827
   Accumulated other comprehensive income (loss)                                                    349                  (3)
   Accumulated deficit                                                                         (428,964)           (430,620)
                                                                                        ----------------    ----------------
       Total stockholders' equity                                                                47,298              45,378
                                                                                        ----------------    ----------------
       Total liabilities and stockholders' equity                                              $152,645            $154,570
                                                                                        ================    ================


                      See accompanying notes to condensed consolidated financial statements.

</TABLE>

                         SKYTERRA COMMUNICATIONS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except share data)
                                  (unaudited)
<TABLE>
<CAPTION>


                                                          Three Months Ended September        Nine Months Ended September
                                                                       30,                                30,
                                                         --------------------------------    -------------------------------
                                                              2005              2004             2005              2004
                                                         ---------------    -------------    --------------    -------------
<S>                                                                <C>              <C>               <C>            <C>
Revenues                                                           $268             $418              $661           $1,778
Cost of revenues                                                     90              398               445            1,735
                                                         ---------------    -------------    --------------    -------------
  Gross profit                                                      178               20               216               43
Expenses:
   Selling, general and administrative                            1,902            2,224             6,629            6,372
   Depreciation and amortization                                      6               45               115               95
  Impairment charge                                                   -                -               421                -
                                                         ---------------    -------------    --------------    -------------
     Total expenses                                               1,908            2,269             7,165            6,467
                                                         ---------------    -------------    --------------    -------------
Loss from operations                                             (1,730)          (2,249)           (6,949)          (6,424)
Interest income, net                                                271            1,900             1,131            9,490
Equity in earnings of Hughes Network Systems, LLC                 6,364                -            12,887                -
Equity in loss of Mobile Satellite Ventures LP                   (1,563)               -            (7,519)                -
Gain (Loss) on investments in affiliates                            431             (449)           (1,211)            (972)
Other income (expense), net                                         624              (63)              941           20,841
Minority interest                                                   316             (172)            1,531             (631)
                                                         ---------------    -------------    --------------    -------------
Income (loss) from continuing operations                          4,713           (1,033)              811           22,304
Gain from wind-down of discontinued operations                      845                -               845                -
                                                         ---------------    -------------    --------------    -------------
Net income (loss)                                                 5,558           (1,033)            1,656           22,304
   Cumulative dividends and accretion of convertible
     preferred stock to liquidation value                        (2,492)          (2,492)           (7,477)          (7,426)
                                                         ---------------    -------------    --------------    -------------
Net income (loss) attributable to common stockholders            $3,066          $(3,525)          $(5,821)         $14,878
                                                         ===============    =============    ==============    =============
Basic earnings (loss) per common share:
  Continuing operations                                           $0.12           $(0.23)           $(0.38)           $0.99
  Discontinued operations                                          0.05                -              0.05                -
                                                         ---------------    -------------    --------------    -------------
     Net earnings (loss) per common share                         $0.17           $(0.23)           $(0.33)           $0.99
                                                         ===============    =============    ==============    =============
Diluted earnings (loss) per common share:
  Continuing operations                                           $0.12           $(0.23)           $(0.38)           $0.95
  Discontinued operations                                          0.04                -              0.05                -
                                                         ---------------    -------------    --------------    -------------
     Net earnings (loss) per common share                         $0.16           $(0.23)           $(0.33)           $0.95
                                                         ===============    =============    ==============    =============
Weighted average common shares outstanding:
  Basic                                                      17,705,506       15,064,616        17,581,661       15,062,714
                                                         ===============    =============    ==============    =============
  Diluted                                                    18,621,611       15,064,616        17,581,661       15,713,479
                                                         ===============    =============    ==============    =============


                      See accompanying notes to condensed consolidated financial statements.
</TABLE>



                         SKYTERRA COMMUNICATIONS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (unaudited)
<TABLE>
<CAPTION>

                                                                                     Nine Months Ended September 30,
                                                                                     --------------------------------
                                                                                         2005              2004
                                                                                     -------------     --------------
Cash flows from operating activities:
<S>                                                                                        <C>               <C>
   Net income                                                                              $1,656            $22,304
   Adjustments to reconcile net income to net cash used in operating
    activities:
     Gain from adjustment to reserve for note receivable and accrued interest
       from Motient Corporation                                                                 -            (22,516)
     Gain from discontinued operations                                                       (845)                 -
     Depreciation and amortization                                                            115                 95
     Impairment charge                                                                        421                  -
     Equity in earnings of Hughes Network Systems, LLC                                    (12,887)                 -
     Equity in loss of Mobile Satellite Ventures LP                                         7,519                  -
     Loss on investments in affiliates                                                      1,211                972
     Minority interest                                                                     (1,531)               631
     Gain on sale of property and equipment                                                   (19)                 -
     Non-cash compensation expense                                                            736                935
     Non-cash charge for issuance of warrants by consolidated subsidiary                       56                392
     Changes in assets and liabilities:
       Accounts receivable, net                                                               (40)                88
       Prepaid expenses, deferred transaction costs and other assets                        5,251               (836)
       Accounts payable, accrued and other liabilities                                     (5,014)            (1,183)
       Deferred revenue                                                                       (21)               (37)
                                                                                     -------------     --------------
           Net cash (used in) provided by continuing operations                            (3,392)               845
           Net cash used in discontinued operations                                          (433)                (9)
                                                                                     -------------     --------------
           Net cash (used in) provided by operating activities                             (3,825)               836
                                                                                     -------------     --------------
Cash flows from investing activities:
   Purchase interest in Hughes Network Systems, LLC                                       (50,000)                 -
   Sales and maturities of short-term investments                                          61,477             22,149
   Purchases of short-term investments                                                    (12,226)           (46,043)
   Restricted cash                                                                         (3,060)                 -
   Repayments of notes receivable                                                               -             21,500
   Cash paid for investments in affiliates                                                   (562)            (1,422)
   Sales of investments in affiliates                                                         517                  -
   Sales of property and equipment                                                             74                  -
   Purchases of property and equipment                                                        (61)              (603)
   Cash paid for acquisitions, net of cash acquired and acquisition costs                       -               (105)
                                                                                     -------------     --------------
           Net cash used in investing activities                                           (3,841)            (4,524)
                                                                                     -------------     --------------
Cash flows from financing activities:
   Payment of dividend on preferred stock                                                  (4,182)                 -
   Proceeds from short-term borrowings                                                        229                  -
   Proceeds from issuance of common stock in connection with the exercise
     of options                                                                                80                 17
   Repurchase of common stock of consolidated subsidiary                                       (4)                 -
                                                                                     -------------     --------------
           Net cash (used in) provided by financing activities                             (3,877)                17
Effect of exchange rate changes on cash and cash equivalents                                   15                  4
                                                                                     -------------     --------------
Net decrease in cash and cash equivalents                                                 (11,528)            (3,667)
Cash and cash equivalents, beginning of period                                             34,759              9,897
                                                                                     -------------     --------------
Cash and cash equivalents, end of period                                                  $23,231             $6,230
                                                                                     =============     ==============


                      See accompanying notes to condensed consolidated financial statements.
</TABLE>




                         SKYTERRA COMMUNICATIONS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

(1)  Description of the Business

     SkyTerra Communications, Inc. (the "Company") operates its business
through a group of complementary companies in the telecommunications industry.
These companies include: (i) Hughes Network Systems, LLC ("HNS"), a leading
provider of broadband satellite networks and services to the enterprise market
and satellite Internet access to the North American consumer market; (ii) the
Mobile Satellite Venture, L.P. joint venture ("MSV Joint Venture"), a joint
venture which provides mobile digital voice and data communications services
via satellite; (iii) Electronic System Products, Inc. ("ESP"), formerly a
product development and engineering services firm which is currently focusing
on maximizing the license revenue from its intellectual property portfolio
and (iv) AfriHUB, LLC ("AfriHUB"), an early stage company that provides a
limited amount of satellite based Internet access and domestic and
international calling services through exclusive partnerships with certain
Nigerian based universities while it actively pursues opportunities to provide
technical training in the Nigerian market. The Company completed its
acquisition of 50% of the equity interests of HNS in April 2005 and serves as
its managing member.

     The Company is headquartered in New York, New York.

 (2) Basis of Presentation

     The accompanying condensed consolidated financial statements have been
prepared by the Company in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, the
accompanying condensed consolidated financial statements contain all
adjustments, consisting only of those of a normal recurring nature, necessary
for a fair presentation of the Company's financial position, results of
operations and cash flows at the dates and for the periods indicated. While the
Company believes that disclosures presented are adequate to make the
information not misleading, these condensed consolidated financial statements
should be read in conjunction with the audited financial statements and related
notes for the year ended December 31, 2004 which are contained in the Company's
Annual Report on Form 10-K/A (Amendment No. 1) filed with the Securities and
Exchange Commission. The results of the three and nine months ended September
30, 2005 are not necessarily indicative of the results to be expected for the
full year. Certain prior year amounts in the accompanying condensed
consolidated financial statements have been reclassified to conform to the
current year's presentation.

(3)  Proposed Distribution and Merger

     On September 22, 2005, the Company announced a plan to separate into two
publicly owned companies: the Company, which would solely hold its current
stake in each of the MSV Joint Venture and TerreStar; and SkyTerra Holdings,
Inc. ("Holdings"), a newly formed entity that would own all of the Company's
other assets, including its managing interest in HNS. This proposed separation
would be accomplished by (i) the contribution of all of the Company's assets
other than its stake in each of the MSV Joint Venture and TerreStar to Holdings
and (ii) a special dividend distribution of the common stock of Holdings to the
Company's stockholders. The Company also announced that it had executed a
non-binding letter of intent with Motient and TMI Communications and Company,
among others, that would result in the consolidation of the ownership of the
MSV Joint Venture and TerreStar into Motient. This consolidation would include
the merger of the Company, following the special dividend distribution, into
Motient, in a tax-free stock-for-stock merger. The special dividend
distribution and the consummation of the merger are subject to, among other
things, definitive documentation, filing of the appropriate registration
statements with the Securities and Exchange Commission and the requisite final
approvals from the Company's board of directors.

(4)  Interest in the MSV Joint Venture

   MSV Joint Venture

     The Company's 80% owned MSV Investors, LLC subsidiary (the "MSV Investors
Subsidiary") owns approximately 23% of the limited partnership interests (on an
undiluted basis) of the MSV Joint Venture, a joint venture that also includes
TMI Communications, Inc. ("TMI"), Motient Corporation ("Motient") and certain
other investors (the "Other MSV Investors"). The Company accounts for its
interest in the MSV Joint Venture under the equity method and, accordingly,
records its proportionate share of the net loss of the MSV Joint Venture,
subject to certain adjustments. These adjustments relate primarily to the
amortization of the excess of the Company's carrying amount over its
proportionate share of the MSV Joint Venture's net assets on the date of
conversion. This excess is being amortized over the remaining useful life of
certain MSV Joint Venture long-lived assets on a straight line basis. As of
September 30, 2005, the Company's book investment exceeded its proportionate
share of the MSV Joint Venture's net assets by approximately $1.5 million.

     The following table presents summarized consolidated financial information
for the MSV Joint Venture for the periods indicated. Certain reclassifications
have been made to the MSV Joint Venture's consolidated balance sheet
information as of December 31, 2004 and consolidated statement of operation
information for the nine months ended September 30, 2005 to reflect TerreStar
Networks, Inc. ("TerreStar") as a discontinued operation which resulted from
the exchange of the TerreStar Rights as discussed below.

<TABLE>
<CAPTION>

                                                                                 September 30,      December 31,
                                                                                     2005              2004
                                                                                 --------------   --------------
                                                                                         (in thousands)
Consolidated balance sheet information:
<S>                                                                                   <C>               <C>
     Current assets                                                                   $120,711          $139,978
     Noncurrent assets                                                                 101,508           106,245
     Current liabilities                                                                12,082            11,772
     Noncurrent liabilities                                                             22,288            21,386
     Minority interest                                                                       -               101
     Partners' equity                                                                  187,849           212,964

                                                                                 Three Months       Nine Months
                                                                                     Ended             Ended
                                                                                 September 30,     September 30,
                                                                                      2005             2005
                                                                                 --------------   --------------
                                                                                         (in thousands)
Consolidated statement of operations:
     Revenues                                                                           $7,905           $22,554
     Loss from continuing operations                                                    (9,529)          (29,351)
     Net loss                                                                           (6,710)          (33,414)
</TABLE>

     The MSV Investors Subsidiary and the other partners of the MSV Joint
Venture have agreed that the acquisition or disposition by the MSV Joint
Venture of its assets, certain acquisitions or dispositions of a limited
partner's interest in the MSV Joint Venture, subsequent investment into the MSV
Joint Venture by any person, and any merger or other business combination of
the MSV Joint Venture, are subject to the control restrictions contained in the
Amended and Restated Limited Partnership Agreement, the Amended and Restated
Stockholders Agreement and the Voting Agreement. The 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 the MSV Joint
Venture. In addition, pursuant to the Voting Agreement, the MSV Investors
Subsidiary and two of the three other joint venture partner groups have agreed
that three of the four joint venture partner groups must consent to certain
transactions involving the MSV Joint Venture or the partners or none of the
parties to the Voting Agreement will support such actions, including permitting
any partner to acquire control of the MSV Joint Venture.

   TerreStar Networks

     TerreStar was formed by the MSV Joint Venture to develop business
opportunities related to the proposed receipt of certain licenses in the 2 GHz
band. In December 2004, the MSV Joint Venture issued rights (the "TerreStar
Rights") to receive all of the shares of common stock of TerreStar, then a
wholly-owned subsidiary of the MSV Joint Venture, to the limited partners of
the MSV Joint Venture, pro rata in accordance with each limited partner's
percentage ownership. The TerreStar Rights were to automatically be exchanged
for shares of TerreStar common stock on May 20, 2005. In connection with the
distribution of the TerreStar Rights, TerreStar issued warrants to purchase
shares of its common stock representing 3% of the outstanding equity for an
exercise price of $0.21 per share to certain of the Other MSV Investors. These
warrants were exercised in March 2005. On May 11, 2005, the TerreStar Rights
were exchanged for shares of TerreStar common stock in connection with the sale
by TerreStar of $200.0 million of its common stock to Motient at a purchase
price of $24.42 per share (the "TerreStar Private Placement"), increasing
Motient's ownership of TerreStar to approximately 61% on an undiluted basis.
Following these transactions, the Company's MSV Investors Subsidiary owns
5,303,315 shares of TerreStar common stock, or approximately 17% of TerreStar
on an undiluted basis, and is accounting for its interest in TerreStar under
the cost method. In accordance with Accounting Principles Board Opinion No. 29,
"Accounting for Nonmonetary Transactions," the Company's carrying value for its
interest in TerreStar is based on its pro rata share of the MSV Joint Venture's
carrying value for TerreStar before the distribution. As the MSV Joint Venture
had no carrying value for its interest in TerreStar, the Company has not
recorded any carrying value for its interest in TerreStar on the accompanying
condensed consolidated balance sheets.

     In connection with the TerreStar Private Placement, the minority
shareholders of TerreStar, including the Company's MSV Investors Subsidiary,
TMI and the Other MSV Investors, entered into certain agreements with TerreStar
and Motient providing the MSV Investors Subsidiary (and the other minority
shareholders) with certain protections, including tag along rights, pre-emptive
rights and representation on the TerreStar Board of Directors. In addition, the
TerreStar shares held by the minority shareholders, including the MSV Investors
Subsidiary, under certain conditions, may be subject to drag along rights of
Motient. In connection with the TerreStar Private Placement, the MSV Joint
Venture licensed TerreStar certain intellectual property and agreed to provide
TerreStar with certain services. Also, in connection with the transaction,
Motient agreed, subject to satisfaction of certain conditions, to waive certain
rights in order to facilitate a transaction in which one of the minority
shareholders in TerreStar who also holds interests in the MSV Joint Venture
acquires all of the interests in the MSV Joint Venture held by the other
minority shareholders in TerreStar, resulting in control of the MSV Joint
Venture being held by such party. The minority shareholders have not agreed to
such a transaction or committed to consummate such a transaction. As described
in Note 3, on September 22, 2005, the Company, Motient, TMI Communications and
Company and the Other MSV Investors executed a non-binding letter of intent
that would result in the consolidation of the MSV Joint Venture and TerreStar
into Motient. If that transaction is consummated, an agreement with the other
minority shareholders of TerreStar would not occur. There can be no assurance
that the agreement with Motient will be consummated or, in the alternative,
that any discussions among the minority shareholders in TerreStar to
consolidate their interests in the MSV Joint Venture and TerreStar will take
place or otherwise result in a definitive binding agreement.

(5)  Interest in Hughes Network Systems

     In April 2005, the Company completed its acquisition of 50% of the Class A
membership interests of HNS from DTV Network Systems, Inc. (formerly known as
Hughes Network Systems, Inc., "DTV"), a wholly owned subsidiary of The DIRECTV
Group, Inc. ("DIRECTV"), for $50.0 million in cash and 300,000 shares of the
Company's common stock. The acquisition occurred pursuant to an agreement among
the Company, DIRECTV, DTV and HNS, dated December 3, 2004, as amended.
Immediately prior to the acquisition, DTV contributed substantially all of the
assets and certain liabilities of its very small aperture terminal, mobile
satellite and carrier businesses, as well as the certain portions of its
SPACEWAY Ka-band satellite communications platform that is under development,
to HNS, which at the time was a wholly-owned subsidiary of DTV. In
consideration for the contribution of assets by DTV, HNS paid DTV $190.7
million of cash. This payment represents the $201.0 million stated in the
agreement less an estimated purchase price adjustment of $10.3 million, which
is subject to further adjustment depending principally upon the closing value
of HNS' working capital (as defined in the agreement). On July 21, 2005, DTV
submitted its proposed final working capital statement asserting that it was
entitled to a $12.0 million payment from HNS. On October 21, 2005, HNS notified
DTV of its objection to the proposed final working capital statement and
asserted that an additional payment of $19.7 million was due from DTV to HNS.
On November 10, 2005, HNS and DTV agreed that HNS would pay DTV $10.0 million
to resolve the dispute if Holdings closes on the acquisition of the remaining
50% of the Class A membership interest of HNS that the Company does not
currently own (as described further below). If the acquisition of the remaining
50% of the Class A membership interests does not close and the parties are
otherwise unable to resolve the dispute, it will be referred to an independent
accounting firm for binding resolution.

     Concurrent with the acquisition, HNS incurred $325.0 million of term
indebtedness and obtained a $50.0 million revolving credit facility. The
Company and DTV have each pledged their respective membership interests of HNS
to secure the obligations of HNS under the term indebtedness. The indebtedness
is otherwise non-recourse to the Company or DTV. Following the acquisition, the
Company serves as the managing member of HNS.

     The HNS limited liability agreement allows for the issuance of Class B
membership interests which are entitled to receive a pro rata share of any
capital gains upon, among other things, a sale of HNS. In April 2005, Class B
membership interests were issued to certain members of HNS' senior management
and the Company's chief executive officer and president entitling the holders
to approximately 4% of any capital gains resulting from a qualifying
transaction. These Class B membership interests are subject to certain vesting
requirements, with 50% of the Class B membership interests subject to time
vesting over five years and the other 50% vesting based upon certain
performance milestones. Following the contribution of the Company's Class A
membership interests to Holdings and closing of acquisition of the remaining
50% of the outstanding Class A membership interests, then one year following
such a transaction, at the holders' election, vested Class B membership
interests could be exchanged for common stock of the Holdings. The number of
shares of the Holdings' common stock to be issued upon such exchange would be
based upon the fair market value of such vested Class B membership interest
divided by the value of the Holdings' common stock at the time of such
exchange. The issuance of such shares of Holdings common stock is subject to
the authorization of the board of directors of Holdings and compliance with
applicable securities laws.

     In addition, in July 2005, HNS adopted an incentive plan pursuant to which
bonus units representing up to approximately 4% of the increase in the value of
HNS are available for grant to its employees. The bonus units provide for time
vesting over five years subject to a participant's continued employment with
HNS and reflect a right to receive a cash payment upon a change of control of
HNS (but excluding the acquisition by the Company of the remaining 50% of the
outstanding Class A membership interests) or a sale of substantially all of the
assets of HNS. Pursuant to the plan, if the Company acquires the remaining 50%
of the outstanding Class A membership interests and a participant in the plan
is still employed by HNS at such time, then the participant's vested bonus
units would be exchanged for common stock of the Company. Following the
contribution of the Company's Class A membership interests to Holdings,
Holdings will succeed to the obligations of the Company under the plan. As
such, the number of shares of Holdings' common stock to be issued upon such
exchange would be based upon the fair market value of such vested bonus unit
divided by the value of Holdings' common stock at the time of the exchange. The
issuance of such shares of Holdings common stock is subject to the
authorization of the board of directors of Holdings and compliance with
applicable securities laws.

     On November 10, 2005, the Company, through Holdings, entered into an
agreement with DTV to acquire the remaining 50% of the Class A membership
interests of HNS for $100.0 million in cash. To finance the transaction,
Holdings has received a commitment for $100.0 million of short-term debt
financing from Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV,
L.P. (together, "Apollo"). Concurrent with the special dividend distribution of
the common stock of Holdings to the Company's stockholders, the Company expects
that Holdings will conduct a rights offering to its stockholders in order to
repay the short-term debt financing provided by Apollo. In connection with such
rights offering, Apollo has agreed to subscribe for the maximum number of
shares of common stock allocated to it, including the exercise of pro rata
over-subscription rights. The exercise by Apollo of its rights would occur by
converting the outstanding amounts due under the short-term debt financing into
shares of common stock of Holdings at the subscription price in the rights
offering. The unconverted principal and interest obligations under the
short-term debt financing would be repaid immediately following the
consummation of the rights offering. The closing of the acquisition of the
remaining 50% of the Class A membership interests of HNS is expected in the
first quarter of 2006 and is subject to regulatory approvals, receipt of the
short-term debt financing from Apollo and customary closing conditions.
Following closing, Holdings will pledge its Class A membership interests of HNS
to secure the obligations of HNS under the term indebtedness.

     The Company currently accounts for its interest in HNS under the equity
method in accordance with Financial Accounting Standards Board Interpretation
No. 46R, "Consolidation of Variable Interest Entities, an Interpretation of ARB
No. 51" ("FIN 46R"), as HNS is a variable interest entity as defined in FIN 46R
and the Company is not the primary beneficiary as defined in FIN 46R.
Accordingly, the Company records its proportionate share of the net income of
HNS, subject to certain adjustments. These adjustments relate primarily to the
amortization of the excess the Company's proportionate share of HNS' net assets
over the Company's carrying amount on the date of acquisition. This excess is
being amortized over the remaining useful life of certain HNS long-lived assets
on a straight line basis. As of September 30, 2005, the Company's proportionate
share of HNS' net assets exceeded its book investment by approximately $6.7
million.

     The following table presents summarized consolidated financial information
for HNS for the periods indicated:

<TABLE>
<CAPTION>

                                                                                 September 30,
                                                                                      2005
                                                                                 ---------------
                                                                                 (in thousands)
Consolidated balance sheet information:
<S>                                                                                    <C>               <C>
     Current assets                                                                    $446,656
     Noncurrent assets                                                                  274,977
     Current liabilities                                                                202,021
     Noncurrent liabilities                                                             365,706
     Minority interest                                                                    6,052
     Owners' equity                                                                     147,854

                                                                                  Three Months        April 23, 2005
                                                                                     Ended                  to
                                                                                 September 30,         September 30,
                                                                                      2005                 2005
                                                                                 ---------------    ---------------
                                                                                          (in thousands)
Consolidated statement of operations:
     Revenues                                                                          $200,618           $355,337
     Income from operations                                                              19,355             36,421
     Net income                                                                          12,472             24,628

</TABLE>

     As of December 31, 2004, the Company had incurred approximately $5.0
million of transaction costs, including legal, accounting and other costs
directly related to the transaction. These costs are included in deferred
transaction costs on the accompanying condensed consolidated balance sheet as
of December 31, 2004. At closing of the acquisition, HNS either paid these
costs directly or reimbursed the Company for amounts paid by the Company.

(6)  Variable Interest Entities

     (a) Interest in Navigauge

     As of September 30, 2005, the Company owned approximately 39% of the
outstanding equity interests of Navigauge, Inc. ("Navigauge") on an undiluted
basis. Navigauge is a privately held media and marketing research firm that
intended to collect data on in-car radio usage and driving habits of consumers
and intends to market the aggregate data to radio broadcasters, advertisers and
advertising agencies in the United States. From January 2005 through June 2005,
the Company purchased additional short-term promissory notes from Navigauge
with an aggregate principal amount of approximately $0.6 million. As of
September 30, 2005, the Company holds short-term promissory notes from
Navigauge with an aggregate principal amount of approximately $1.1 million.
Following the impairment discussed below, the short-term promissory notes have
no carrying value on the accompanying condensed consolidated balance sheets.

     Although Navigauge is a variable interest entity as defined in FIN 46R,
the Company is not the primary beneficiary as defined in FIN 46R. Accordingly,
prior to the impairment discussed below, this investment was included in
investments in affiliates on the accompanying condensed consolidated balance
sheets and was being accounted for under the equity method with the Company's
share of Navigauge's loss being recorded in loss on investments in affiliates
on the accompanying condensed consolidated statements of operations. For the
three and nine months ended September 30, 2005, the Company's share of
Navigauge's loss was nil and $0.3 million, respectively. For the three and nine
months ended September 30, 2004, the Company's share of Navigauge's loss was
$0.4 million and $1.0 million, respectively.

     As Navigauge was unsuccessful in raising the capital necessary to expand
its service beyond the Atlanta market and in light of its prospects, during the
nine months ended September 30, 2005, the Company recognized a loss of
approximately $1.3 million relating to the impairment of the aggregate
remaining carrying amount of its equity interest in Navigauge and the
short-term promissory notes. This loss is included in loss on investments in
affiliates on the accompanying condensed consolidated statements of operations.
In July 2005, Navigauge entered into a non-binding letter of intent to sell
substantially all of its assets. The sale of the assets was subject to, among
other things, completion of the buyer's due diligence and negotiation and
execution of definitive documentation satisfactory to the parties. In September
2005, the negotiations pursuant to the letter of intent were terminated.
Navigauge is pursuing other options with respect to maximizing value from its
intellectual property.

     (b) Interest in Miraxis

     As of September 30, 2005, the Company owned approximately 40% of the
ownership interests of Miraxis on an undiluted basis. Miraxis is a development
stage company that has access to a Ka-band license so long as it implements its
business plan to provide satellite based multi-channel, broadband data and
video services in North America. The Company's President and Chief Executive
Officer holds an approximate 1% interest in Miraxis. As Miraxis is a variable
interest entity as defined in FIN 46R and the Company is the primary
beneficiary as defined in FIN 46R, the operating results and financial position
of Miraxis have been included in the condensed consolidated financial
statements.

(7)  Short-term Borrowing

     In August 2005, AfriHUB's Nigerian subsidiary borrowed approximately $0.2
million from a Nigerian bank under a term loan to fund the investment necessary
to establish a facility on an additional university campus. The short-term
borrowing, which is denominated in Nigerian Naira, is due in August 2006 and
bears interest at an annual rate of 19% as of September 30, 2005. The interest
rate is subject to change based on fluctuations of the bank's money market
rate. The Company has not guaranteed any amounts owed under the short-term
borrowing.

(8)  Earnings (Loss) Per Common Share

     Basic earnings (loss) per common share is computed by dividing net income
(loss) attributable to the common stockholders by the weighted average number
of common shares outstanding for the period. Diluted earnings (loss) per common
share reflects the potential dilution from the exercise or conversion of
securities into common stock. The potential dilutive effect of outstanding
stock options and warrants is calculated using the "treasury stock" method, and
the potential dilutive effect of the convertible preferred stock is calculated
using the "if-converted" method.

     The following table provides a reconciliation of the shares used in
calculating earnings (loss) per common share:

<TABLE>
<CAPTION>


                                                     Three Months Ended September 30,     Nine Months Ended September 30,
                                                     ---------------------------------    -------------------------------
                                                         2005               2004              2005             2004
                                                     --------------    ---------------    --------------   --------------
<S>                                                     <C>                <C>               <C>              <C>
Weighted average common shares outstanding - basic      17,705,506         15,064,616        17,581,661       15,062,714
Common shares issuable upon exercise of stock
   options and warrants                                    916,105                  -                 -          650,765
                                                     --------------    ---------------    --------------   --------------
Weighted average common shares outstanding -
   diluted                                              18,621,611         15,064,616        17,581,661       15,713,479
                                                     ==============    ===============    ==============   ==============
</TABLE>

      During all periods presented, the Company had potential common shares,
including shares issuable upon the exercise of outstanding stock options and
warrants and the conversion of the Series A redeemable convertible stock, which
could potentially dilute basic earnings (loss) per common share in the future,
but were excluded in the computation of diluted earnings (loss) per common
share in such periods, as their effect would have been antidilutive. Potential
common shares issuable upon the exercise of outstanding stock options and
warrants but excluded from the calculation of diluted earnings (loss) per
common share were 1,556,609 shares and 2,807,976 shares for the three and nine
months ended September 30, 2005, respectively. Potential common shares issuable
upon the exercise of outstanding stock options and warrants but excluded from
the calculation of diluted earnings (loss) per common share were 2,662,950
shares and 1,727,903 shares for the three and nine months ended September 30,
2004, respectively.

     During each of the three and nine months ended September 30, 2005,
1,912,485 potential common shares issuable upon the conversion of the Series A
redeemable convertible preferred stock were excluded from the computation of
diluted earnings (loss) per common share. During each of the three and nine
months ended September 30, 2004, 1,750,374 shares of common stock issuable upon
the conversion of the Series A redeemable convertible preferred stock were
excluded from the computation of diluted earnings (loss) per common share.

 (9) Stock Option Plans

     The Company accounts for its stock option plan in accordance with SFAS No.
123, "Accounting for Stock-Based Compensation" ("SFAS No. 123"), which allows
entities to continue to apply the provisions of APB Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB Opinion No. 25"), as clarified by FASB
Interpretation No. 44, "Accounting For Certain Transactions Involving Stock
Compensation," and provides pro forma net income and pro forma earnings per
share disclosures for employee stock option grants as if the fair-value-based
method, as defined in SFAS No. 123, had been applied. The Company has elected
to apply the provisions of APB Opinion No. 25 and provide the pro forma
disclosure required by SFAS No. 123.

     APB Opinion No. 25 does not require the recognition of compensation
expense for stock options granted to employees at fair market value. However,
any modification to previously granted awards generally results in compensation
expense or contra-expense recognition using the cumulative expense method,
calculated based on quoted prices of the Company's common stock and vesting
schedules of underlying awards. As a result of the re-pricing of certain stock
options in 2001 and 2002, the Company recognized compensation contra-expense of
approximately $0.1 million for the three months ended September 30, 2005 and
compensation expense of approximately $0.3 million for the nine months ended
September 30, 2005. As a result of the re-pricing of those certain stock
options, for the three and nine months ended September 30, 2004, the Company
recognized compensation contra-expense of approximately $0.1 million for the
three months ended September 30, 2004 and compensation expense of approximately
$0.9 million for the nine months ended September 30, 2004.

     The following table provides a reconciliation of net income (loss) to pro
forma net income (loss) as if the fair value method had been applied to all
employee awards:

<TABLE>
<CAPTION>

                                                          Three Months Ended September 30,     Nine Months Ended September 30,
                                                          --------------------------------    --------------------------------
                                                               2005              2004             2005              2004
                                                          ---------------    -------------    --------------    --------------
<S>                                                               <C>            <C>                 <C>              <C>
Net income (loss), as reported                                    $5,558         $(1,033)            $1,656           $22,304
(Deduct) Add:  Stock-based employee compensation
   (contra-expense) expense, as reported                             (50)            (89)               292               903
Deduct:  Total stock-based employee compensation
   expense determined under fair value based method for
   all awards                                                       (427)            (93)              (947)             (226)
                                                          ---------------    -------------    --------------    --------------
Pro forma net income (loss)                                       $5,081         $(1,215)            $1,001           $22,981
                                                          ===============    =============    ==============    ==============

Basic earnings (loss) per common share:
   As reported                                                     $0.17          $(0.23)            $(0.33)            $0.99
   Pro forma                                                       $0.15          $(0.25)            $(0.37)            $1.03

Diluted earnings (loss) per common share:
   As reported                                                     $0.16          $(0.23)            $(0.33)            $0.95
   Pro forma                                                       $0.14          $(0.25)            $(0.37)            $0.98
</TABLE>

     During the three months ended September 30, 2005, the Company did not
issue any options to purchase shares of common stock. During the nine months
ended September 30, 2005, the Company issued options to purchase 152,500 shares
of common stock at a weighted average fair value of $16.82 using the
Black-Scholes option pricing model. During the three months ended September 30,
2004, the Company issued options to purchase 40,000 shares of common stock at a
weighted average fair value of $5.29 using the Black-Scholes option pricing
model. During the nine months ended September 30, 2004, the Company issued
options to purchase 220,000 shares of common stock at a weighted average fair
value of $2.70 using the Black-Scholes option pricing model.

(10)   Segment Information

     The segment information is reported along the same lines that the
Company's chief operating decision maker reviews the operating results in
assessing performance and allocating resources. Accordingly, the Company's
consolidated operations have been classified into five reportable segments: the
MSV Joint Venture, HNS, ESP, AfriHUB and Parent and other. The MSV Joint
Venture, which became a reportable segment following the November 2004
conversion of the notes receivable into limited partnership interests of the
MSV Joint Venture, provides mobile digital voice and data communications
services via satellite. HNS, which became a reportable segment following the
April 2005 acquisition by the Company, is a provider of broadband satellite
networks and services to the enterprise market and satellite Internet access to
the North American consumer market. ESP, which became a reportable segment
following the August 2003 acquisition by the Company, is an engineering
services firm with expertise in the design and manufacturing of electronic
products and systems across many disciplines of electrical engineering.
AfriHUB, which became a reportable segment following the April 2004 acquisition
by the Company, provides a limited amount of satellite based Internet access
and domestic and international calling services through exclusive partnerships
with certain Nigerian based universities while it explores opportunities to
provide technical training in the Nigerian market. Parent and other includes
the Company, other consolidated entities other than ESP and AfriHUB and
eliminations.

     The following table presents certain financial information on the
Company's reportable segments for the three months ended September 30, 2005.
Since our 23% share of the results of MSV Joint Venture's operations and our
50% share of the results of HNS' operations are already included in the Parent
and Other column, the Eliminate MSV Joint Venture and HNS column removes the
results of the MSV Joint Venture and HNS shown in the MSV Joint Venture and HNS
columns.

<TABLE>
<CAPTION>

                                                                                                      Eliminate
                                                                                                       HNS and
                                                 MSV Joint                              Parent        MSV Joint
                                       HNS        Venture        ESP        AfriHUB     and Other      Venture     Consolidated
                                    -----------  -----------   ---------   ----------   ----------   ------------  --------------
                                                                           (in thousands)
<S>                                   <C>            <C>           <C>           <C>           <C>    <C>                   <C>
Revenues                              $200,618       $7,905        $196          $72           $-     $(208,523)            $268
Operating expenses                    (181,263)     (17,434)        (97)        (303)      (1,598)      198,697           (1,998)
                                    -----------  -----------   ---------   ----------   ----------   ------------  --------------
Income (Loss) from operations           19,355       (9,529)         99         (231)      (1,598)       (9,826)          (1,730)
Interest (expense) income, net          (9,044)         964         (15)         (30)         316         8,080              271
Equity in earnings of Hughes
  Network Systems, LLC                       -            -           -            -        6,364             -            6,364
Equity in loss of Mobile Satellite
  Ventures LP                                -            -           -            -       (1,563)            -           (1,563)
Gain on investments in affiliates            -            -           -            -          431             -              431
Other income (expense), net              2,161        1,855          20          354          250        (4,016)             624
Minority interest                            -            -           -            -          316             -              316
Gain from discontinued operations            -            -           -            -          845             -              845
                                    -----------  -----------   ---------   ----------   ----------   ------------  --------------
Net income (loss)                      $12,472      $(6,710)       $104          $93       $5,361       $(5,762)          $5,558
                                    ===========  ===========   =========   ==========   ==========   ============  ==============
</TABLE>

     The following table presents certain financial information on the
Company's reportable segments for the nine months ended September 30, 2005. The
HNS column represents the results of operations for the period following the
April 22, 2005 acquisition through September 30, 2005. Since our 23% share of
the results of MSV Joint Venture's operations and our 50% share of the results
of HNS' operations are already included in the Parent and Other column, the
Eliminate MSV Joint Venture and HNS column removes the results of the MSV Joint
Venture and HNS shown in the MSV Joint Venture and HNS columns.

<TABLE>
<CAPTION>

                                                                                                      Eliminate
                                                    MSV                                              HNS and MSV
                                                   Joint                                 Parent         Joint
                                      HNS         Venture        ESP        AfriHUB     and Other      Venture       Consolidated
                                   -----------   ----------   ----------   ----------   ----------   -------------  --------------
                                                                         (in thousands)
<S>                                 <C>           <C>             <C>          <C>            <C>     <C>                 <C>
Revenues                            $355,337      $22,554         $443         $218           $-      $(377,891)          $661
Operating expenses                  (318,916)     (51,905)        (497)      (1,574)      (5,539)       370,821         (7,610)
                                   -----------   ----------   ----------   ----------   ----------   -------------  --------------
Income (Loss) from continuing         36,421      (29,351)         (54)      (1,356)      (5,539)        (7,070)        (6,949)
  operations
Interest (expense) income, net       (14,156)       2,303          (45)         (67)       1,243         11,853          1,131
Equity in earnings of Hughes
  Network Systems, LLC                     -            -            -            -       12,887              -         12,887
Equity in loss of Mobile Satellite
  Ventures LP                              -            -            -            -       (7,519)             -         (7,519)
Loss on investments in affiliates          -            -            -            -       (1,211)             -         (1,211)
Other income, net                      2,363        3,218           65          283          593         (5,581)           941
Minority interest                          -            -            -            -        1,531              -          1,531
(Loss) Gain from discontinued
   operations                              -       (9,584)           -            -          845          9,584            845
                                   -----------   ----------   ----------   ----------   ----------   -------------  --------------
Net income (loss)                    $24,628     $(33,414)        $(34)     $(1,140)      $2,830         $8,786         $1,656
                                   ===========   ==========   ==========   ==========   ==========   =============  ==============
</TABLE>

     The following table presents certain financial information on the
Company's reportable segments for the three months ended September 30, 2004:

<TABLE>
<CAPTION>

                                                                                        Parent
                                                          ESP          AfriHUB        and Other       Consolidated
                                                        -----------    -----------    -----------    -------------
                                                                             (in thousands)
<S>                                                          <C>              <C>            <C>            <C>
Revenues                                                     $418             $-             $-             $418
Operating expenses                                           (615)          (630)        (1,422)          (2,667)
                                                        -----------    -----------    -----------    -------------
Loss from operations                                         (197)          (630)        (1,422)          (2,249)
Interest (expense) income, net                                 (9)            (2)         1,911            1,900
Loss on investments in affiliates                               -              -           (449)            (449)
Other income (expense), net                                    17            (80)             -              (63)
Minority interest                                               -            142           (314)            (172)
                                                        -----------    -----------    -----------    -------------
Net loss                                                    $(189)         $(570)         $(274)         $(1,033)
                                                        ===========    ===========    ===========    =============
</TABLE>

     The following table presents certain financial information on the
Company's reportable segments for the nine months ended September 30, 2004:

<TABLE>
<CAPTION>

                                                                                        Parent
                                                          ESP          AfriHUB        and Other       Consolidated
                                                        -----------    -----------    -----------    -------------
                                                                             (in thousands)
<S>                                                        <C>                <C>            <C>          <C>
Revenues                                                   $1,778             $-             $-           $1,778
Operating expenses                                         (2,549)        (1,092)        (4,561)          (8,202)
                                                        -----------    -----------    -----------    -------------
Loss from operations                                         (771)        (1,092)        (4,561)          (6,424)
Interest (expense) income, net                                (44)            (2)         9,536            9,490
Loss on investments in affiliates                            (164)             -           (808)            (972)
Other income (expense), net                                   758            (80)        20,163           20,841
Minority interest                                               -            235           (866)            (631)
                                                        -----------    -----------    -----------    -------------
Net (loss) income                                           $(221)         $(939)       $23,464          $22,304
                                                        ===========    ===========    ===========    =============
</TABLE>

(11)  Impairment of Long-Lived Assets

     Long-lived assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of an asset to
future net undiscounted cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying value of the assets exceeds the
fair value of the assets.

     As a result of the Company's decision to cease providing funding to
AfriHUB, as of June 30, 2005, the Company evaluated AfriHUB's long-lived assets
for recoverability and determined that the undiscounted cash flows over the
remaining expected life of the two established centers was less than the
carrying value of the assets relating to those centers. Accordingly, the
Company assessed the fair value of these assets by estimating the
recoverability of the computers and equipment upon a sale. The Company
recognized a non-cash impairment loss relating to the computers and equipment
as their carrying value exceeded the fair value by approximately $0.4 million.

(12)  Discontinued Operations

     From 1998 through the third quarter of 2001, the Company's principal
business was conducted through Rare Medium, Inc., which developed Internet
e-commerce strategies, business processes, marketing communications, branding
strategies and interactive content using Internet-based technologies and
solutions. As a result of the weakening of general economic conditions that
caused many companies to reduce spending on Internet-focused business solutions
and in light of their performance and prospects, a decision to discontinue Rare
Medium, Inc.'s operations, along with those of its LiveMarket, Inc. subsidiary
("LiveMarket"), was made at the end of the third quarter of 2001. As of
September 30, 2005, cash of approximately $26,000 was the remaining asset of
Rare Medium, Inc. and LiveMarket. The liabilities of these subsidiaries totaled
approximately $1.0 million, consisting of accounts payable and accrued
expenses. For the three and nine months ended September 30, 2005, the Company
recognized a gain of approximately $0.8 million as a result of the settlement
of Rare Medium, Inc. liabilities at amounts less than their recorded amounts.
For the three and nine months ended September 30, 2004, the Company did not
recognize any gains or losses as a result of the settlement of Rare Medium,
Inc. liabilities.

(13)  Related Party Transactions

     During the three and nine months ended September 30, 2005, ESP recognized
revenues totaling $7,000 and $18,000, respectively, for certain services
provided to Navigauge and the MSV Joint Venture. During the three and nine
months ended September 30, 2004, ESP recognized revenues totaling approximately
$0.1 million and $0.5 million, respectively, for certain services provided to
Navigauge and the MSV Joint Venture.

 (14) Commitments and Contingencies

   Regulatory

     In April 2005, the Federal Communications Commission ("FCC") approved a
license application submitted by the Company which provides the Company with
access to a satellite orbital slot. To ensure that the Company complies with
certain milestones with respect to the construction, launch and initial
operation of a satellite in the orbital slot, the FCC requires the Company to
maintain a surety bond with an initial amount of $3.0 million. As the
milestones are achieved over a five year schedule, the amount of the surety
bond will be reduced. To secure the insurance company's obligation under the
surety bond, the Company must maintain a letter of credit in an amount equal to
the value of the surety bond. The letter of credit agreement requires the
Company to maintain a restricted cash account for 102% of the amount of the
letter of credit. As of September 30, 2005, the Company had approximately $3.1
million in the restricted cash account.

   Litigation

     The Company and certain of its subsidiaries (along with the Engelhard
Corporation) are parties to an arbitration relating to certain agreements that
existed between or among the claimant and ICC Technologies, Inc., the Company's
former name, and the Engelhard/ICC ("E/ICC") joint venture arising from the
desiccant air conditioning business that the Company and its subsidiaries sold
in 1998. The claimant has sought $8.5 million for (1) its alleged out of pocket
losses in investing in certain of E/ICC's technology; (2) unjust enrichment
resulting from the reorganization of E/ICC in 1998; and (3) lost profits
arising from the fact that it was allegedly forced to leave the air
conditioning business when the E/ICC joint venture was dissolved. The Company
intends to vigorously dispute this action.

     In August 2003, a former employee of the Company's discontinued services
subsidiary, filed a putative class action against Rare Medium, Inc. and the
Company, and certain other former subsidiaries that were merged into Rare
Medium, Inc., in Los Angeles County Superior Court captioned Joe Robuck,
individually and on behalf of all similarly situated individuals v. Rare Medium
Group, Inc., Rare Medium L.A., Inc., Rare Medium, Inc., and Rare Medium Dallas,
Inc., Los Angeles County Superior Court Case No. BC300310. The plaintiff filed
the action as a putative class action and putative representative action
asserting that: (i) certain payments were purportedly due and went unpaid for
overtime for employees with five job titles; (ii) certain related violations of
California's overtime statute were committed when these employees were not paid
such allegedly due and unpaid overtime at the time of their termination; and
(iii) certain related alleged violations of California's unfair competition
statute were committed. Plaintiff seeks to recover for himself and all of the
putative class, alleged unpaid overtime, waiting time penalties (which can be
up to 30 days' pay for each person not paid all wages due at the time of
termination), interest, attorneys' fees, costs and disgorgement of profits
garnered as a result of the alleged failure to pay overtime. The plaintiff has
served discovery requests and all of the defendants have submitted objections
and do not intend to provide substantive responses until the Court determines
whether the plaintiff must arbitrate his individual claims. In August 2005, the
Company and Rare Medium, Inc. entered into a settlement agreement with the
plaintiff pursuant to which the class action will be dismissed without
prejudice. As part of the agreement, the Company and Rare Medium, Inc. received
releases from thirteen individuals, each of whom received an immaterial
settlement payment. On October 3, 2005, the Court dismissed the action without
prejudice.

     The Company's discontinued services subsidiary was a defendant in an
action brought by a former landlord in New York State Supreme Court titled
Forty Four Eighteen Joint Venture v. Rare Medium, Inc., Index 602632/03. The
landlord claimed unspecified amounts for breach of the lease. In September
2005, Rare Medium, Inc. settled the matter and paid the landlord $0.3 million.

     Though it intends to continue to vigorously contest the aforementioned
arbitration, the Company is unable to predict its outcome, or reasonably
estimate a range of possible losses, if any, given the current status of the
case. Additionally, from time to time, the Company is subject to litigation in
the normal course of business. The Company is of the opinion that, based on
information presently available, the resolution of any such additional legal
matters will not have a material adverse effect on the Company's financial
position or results of its operations.

(15)  Subsequent Events

     On October 12, 2005, the Company acquired Series A Preferred Shares from
Hughes Systique for $3.0 million, representing an ownership of approximately
22% on an undiluted basis. Hughes Systique plans to provide software
development services with technology resources and expertise in wireless
broadband communications for terrestrial and satellite applications. Hughes
Systique will also support other application areas such as wireless based
networking, RFID enterprise applications and multimedia applications for
in-home broadband entertainment networks. The founders of Hughes Systique
include the Chairman and CEO of HNS, as well as certain current and former
employees of HNS, including the Chairman and CEO's brother.

     The terms of the Company's Series A redeemable convertible preferred stock
provide for dividends of 4.65% of the then current face value to be paid
quarterly in arrears. The payment of approximately $1.4 million, for the three
months ended September 30, 2005, was declared by the Company's board of
directors and paid on November 7, 2005 and is reflected in the accompanying
condensed consolidated financial statements in the carrying amount of the
Series A redeemable convertible preferred stock and in net loss attributable to
common stockholders.

     On November 10, 2005, the Company, through Holdings, entered into an
agreement with DTV to acquire the remaining 50% of the Class A membership
interests of HNS for $100.0 million in cash. To finance the transaction,
Holdings has received a commitment for $100.0 million of short-term debt
financing from Apollo. Concurrent with the special dividend distribution of the
common stock of Holdings to the Company's stockholders, the Company expects
that Holdings will conduct a rights offering to its stockholders in order to
repay the short-term debt financing provided by Apollo. In connection with such
rights offering, Apollo has agreed to subscribe for the maximum number of
shares of common stock allocated to it, including the exercise of pro rata
over-subscription rights. The exercise by Apollo of its rights would occur by
converting the outstanding amounts due under the short-term debt financing into
shares of common stock of Holdings at the subscription price in the rights
offering. The unconverted principal and interest obligations under the
short-term debt financing would be repaid in cash immediately following the
consummation of the rights offering. The closing of the acquisition of the
remaining 50% of the Class A membership interests of HNS is expected in the
first quarter of 2006 and is subject to regulatory approvals, receipt of the
short-term debt financing from Apollo and customary closing conditions. If the
acquisition closes, pursuant to the acquisition agreement, HNS will pay DTV
$10.0 million to resolve the purchase price adjustment dispute related to the
April 2005 transactions. Following closing, Holdings will pledge its Class A
membership interests of HNS to secure the obligations of HNS under the term
indebtedness.

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

     This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that involve risks and uncertainties, including statements
regarding our capital needs, business strategy, expectations and intentions. We
urge you to consider that statements that use the terms "believe," "do not
believe," "anticipate," "expect," "plan," "estimate," "intend" and similar
expressions are intended to identify forward-looking statements. These
statements reflect our current views with respect to future events and because
our business is subject to numerous risks, uncertainties and risk factors, our
actual results could differ materially from those anticipated in the
forward-looking statements, including those set forth below under this "Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" and elsewhere in this report. Actual results will most likely
differ from those reflected in these statements, and the differences could be
substantial. We disclaim any obligation to publicly update these statements, or
disclose any difference between our actual results and those reflected in these
statements. The information constitutes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.

Overview

     We operate our business through a group of complementary companies in the
telecommunications industry, including HNS, the MSV Joint Venture, ESP and
AfriHUB. In April 2005, we completed the acquisition of 50% of the Class A
membership interests of HNS, a leading provider of broadband satellite networks
and services to the enterprise market and satellite Internet access to the
North American consumer market, was completed in April 2005. In November 2005,
we, through Holdings, entered into an agreement to acquire the remaining 50% of
the Class A membership interest of HNS. We are currently engaged in a number of
other separate and unrelated preliminary discussions concerning possible joint
ventures and other transactions. We are in the early stages of such discussions
and have not entered into any definitive agreements with respect to any
material transaction, other than what has been described in this Form 10-Q.
Prior to consummating any transaction, we will have to, among other things,
initiate and satisfactorily complete a due diligence investigation, negotiate
the financial and other terms (including price) and conditions of such
transaction, obtain appropriate board of directors', regulatory and other
necessary consents and approvals and secure financing, to the extent deemed
necessary.

     In November 2004, the FCC granted the MSV Joint Venture's application to
operate an ancillary terrestrial component ("ATC") in the L-Band, subject to
certain conditions. This authorization was the first license for ATC operation
granted by the FCC, allowing the MSV Joint Venture to offer an ATC with its
commercial service. In February 2005, the FCC issued an order (the "February
2005 Order") which set forth new rules for the deployment and operation of an
ATC and provided the MSV Joint Venture with substantial additional flexibility
in its system implementation. Furthermore, the February 2005 Order allows the
MSV Joint Venture to significantly lower the cost of deploying an ATC and
increases the capacity of the MSS/ATC hybrid system. This additional
flexibility provided by the FCC's decision is expected to allow the MSV Joint
Venture to offer users affordable and reliable voice and high-speed data
communications service from virtually anywhere on the North American continent.

     As a result of the FCC's authorizations, the value of our stake in the MSV
Joint Venture has significantly increased; however, even with ATC authority,
the ability of the MSV Joint Venture to succeed is subject to significant risks
and uncertainties, including the ability of the MSV Joint Venture to raise the
capital necessary for the implementation of the next generation satellite
system including ATC or to identify and reach an agreement with one or more
strategic partners. Additional risks include the ability of the MSV Joint
Venture to attract and retain customers, the increased potential competition
from other satellite and wireless service providers, as well as the uncertainty
with respect to the outcome of the court challenges to the FCC's ATC orders.

     During 2004, our consolidated revenues were primarily derived from fees
generated from services performed by ESP. During the fourth quarter of 2004,
ESP experienced a significant decline in demand for its services, including
from its existing customers. As a result, in January 2005, ESP reduced its
workforce from 21 employees to four employees to compensate for the reduced
cash inflows. ESP has subsequently reduced its headcount to two employees and
is still performing services for a limited number of clients. However, ESP is
no longer seeking new client engagements and is instead focusing on maximizing
the license revenue from its intellectual property portfolio.

     In April 2004, we acquired a controlling interest in AfriHUB. AfriHUB's
plan was to provide instructor led and distance based technical training and
satellite based broadband Internet access and domestic and international
calling services through exclusive partnerships with certain Nigerian based
universities. While establishing centers which provide these services on two
university campuses during the fourth quarter of 2004, AfriHUB experienced
significant unanticipated delays and costs in opening these facilities, as well
as greater price sensitivity within the university communities. As a result,
AfriHUB recorded an impairment charge of approximately $0.8 million in December
2004 and suspended its planned roll out of service to additional campuses.
While AfriHUB is actively pursuing other opportunities to provide technical
training in the Nigerian market, including establishing a facility on a single
additional campus, we have decided to cease providing funding to AfriHUB. Given
the uncertainty with respect to AfriHUB's future prospects, we recorded an
impairment charge of approximately $0.4 million during the three months ended
June 30, 2005 relating to the remaining value of AfriHUB's long-lived assets.
In August 2005, AfriHUB's Nigerian subsidiary received approximately $0.2
million of short-term financing from a Nigerian bank to fund the investment
necessary to establish the facility on the additional campus. In September
2005, the Nigerian subsidiary also received a $0.3 million grant from a
charitable foundation to further AfriHUB's efforts in providing technical
training in Nigeria. The grant is payable in two equal annual installments with
the first such payment being received in September 2005.

     Since October 2004, Navigauge has been attempting to raise capital to
expand its data measurement capabilities beyond the Atlanta market. Other than
an aggregate of $1.1 million of short-term promissory notes purchased by us
from October 2004 through June 2005 and an aggregate of $1.1 million of
short-term promissory notes purchased by other existing investors during the
same time period, Navigauge has been unsuccessful in raising such capital.
Accordingly, in light of its prospects, Navigauge's board of directors
determined that the company should cease operations. Accordingly, during the
nine months ended September 30, 2005, we recognized a loss of $1.3 million
relating to the impairment of the aggregate remaining carrying amount of our
equity interest in Navigauge and the short-term promissory notes. This loss is
included in loss on investments in affiliates on the condensed consolidated
statements of operations. In July 2005, Navigauge entered into a non-binding
letter of intent to sell substantially all of its assets. The sale of the
assets was subject to, among other things, completion of the buyer's due
diligence and negotiation and execution of definitive documentation
satisfactory to the parties. In September 2005, the negotiations pursuant to
the letter of intent were terminated. Navigauge is pursuing other options with
respect to selling its assets.

     To execute its business plan, Miraxis needed to raise significant amounts
of capital in order to launch several satellites. Other than an aggregate of
$0.1 million of promissory notes purchased by us from January 2004 through July
2005, Miraxis has been unsuccessful in raising capital. Accordingly, the
holders of the membership interests of Miraxis are in the process of dissolving
the company. The dissolution of Miraxis would not have a material impact on our
financial position or results of operations.

Proposed Distribution and Merger

     On September 22, 2005, we announced a plan to separate into two publicly
owned companies: us, which would solely hold our current stake in each of the
MSV Joint Venture and TerreStar; and Holdings, which would own all of our other
assets, including our managing interest in HNS. This proposed separation would
be accomplished by (i) the contribution of all of our assets other than our
stake in each of the MSV Joint Venture and TerreStar to Holdings and (ii) a
special dividend distribution of the common stock of Holdings to our
stockholders. We also announced that we had executed a non-binding letter of
intent with Motient and TMI Communications and Company, among others, that
would result in the consolidation of the ownership of the MSV Joint Venture and
TerreStar into Motient. This consolidation would include us merging, following
the special dividend distribution, into Motient, in a tax-free stock-for-stock
merger. The special dividend distribution and the consummation of the merger
are subject to, among other things, definitive documentation, filing of the
appropriate registration statements with the Securities and Exchange Commission
and the requisite final approvals from our board of directors.

Hughes Network Systems Transactions

     In April 2005, we completed the acquisition of 50% of the Class A
membership interests of HNS from DTV, a wholly owned subsidiary of DIRECTV, for
$50.0 million in cash and 300,000 shares of the Company's common stock. The
acquisition occurred pursuant to an agreement among us, DIRECTV, DTV and HNS,
dated December 3, 2004, as amended. Immediately prior to the acquisition, DTV
contributed substantially all of the assets and certain liabilities of its very
small aperture terminal, mobile satellite and carrier businesses, as well as
the certain portions of its SPACEWAY Ka-band satellite communications platform
that is under development, to HNS, which at the time was a wholly-owned
subsidiary of DNSI. In consideration for the contribution of assets by DTV, HNS
paid DTV $190.7 million of cash. This payment represents the $201.0 million
stated in the agreement less an estimated purchase price adjustment of $10.3
million, which is subject to further adjustment depending principally upon the
closing value of HNS' working capital (as defined in the agreement). On July
21, 2005, DTV submitted its proposed final working capital statement asserting
that it was entitled to a $12.0 million payment from HNS. On October 21, 2005,
HNS notified DTV of its objection to the proposed final working capital
statement and asserted that an additional payment of $19.7 million was due from
DTV to HNS. . On November 10, 2005, HNS and DTV agreed that HNS would pay DTV
$10.0 million to resolve the dispute if Holdings closes on the acquisition of
the remaining 50% of the Class A membership interest of HNS that the Company
does not currently own (as described further below). If the acquisition of the
remaining 50% of the Class A membership interests does not close and the
parties are unable to otherwise resolve the dispute, it will be referred to an
independent accounting firm for binding resolution.

     Concurrent with the acquisition, HNS incurred $325.0 million of term
indebtedness and obtained a $50.0 million revolving credit facility. We and DTV
have each pledged our respective membership interests of HNS to secure the
obligations of HNS under the term indebtedness. The indebtedness is otherwise
non-recourse to us or DTV. Following the acquisition, we serve as the managing
member of HNS.

     On November 10, 2005, we, through Holdings, entered into an agreement with
DTV to acquire the remaining 50% of the Class A membership interests of HNS for
$100.0 million in cash. To finance the transaction, Holdings has received a
commitment for $100.0 million of short-term debt financing from Apollo.
Concurrent with the special dividend distribution of the common stock of
Holdings to our stockholders, we expect that Holdings will conduct a rights
offering to its stockholders in order to repay the short-term debt financing
provided by Apollo. In connection with such rights offering, Apollo has agreed
to subscribe for the maximum number of shares of common stock allocated to it,
including the exercise of pro rata over-subscription rights. The exercise by
Apollo of its rights would occur by converting the outstanding amounts due
under the short-term debt financing into shares of common stock of Holdings at
the subscription price in the rights offering. The unconverted principal and
interest obligations under the short-term debt financing would be repaid in
cash immediately following the consummation of the rights offering. The closing
of the acquisition of the remaining 50% of the Class A membership interests of
HNS is expected in the first quarter of 2006 and is subject to regulatory
approvals, receipt of the short-term debt financing from Apollo and customary
closing conditions. If the acquisition closes, pursuant to the acquisition
agreement, HNS will pay DTV $10.0 million to resolve the purchase price
adjustment dispute related to the April 2005 transactions. Following closing,
Holdings will pledge its Class A membership interests of HNS to secure the
obligations of HNS under the term indebtedness.

Results of Operations for the Three Months Ended September 30, 2005 Compared
to the Three Months Ended September 30, 2004

   Revenues

     Revenues are derived primarily from fees generated from (i) contracts for
product development, consulting and engineering services performed by ESP,
including reimbursable travel and other out-of pocket expenses, (ii) licensing
the right to use certain intellectual property owned by ESP and (iii) the sale
of prepaid cards for Internet access and calling services by AfriHUB. Revenues
from services performed by ESP are recognized using the
percentage-of-completion method for fixed price contracts and as time is
incurred for time and materials contracts, provided the collection of the
resulting receivable is reasonably assured. Revenues from licensing the right
to use intellectual property are recognized as the licensee manufactures
products incorporating or using the licensed intellectual property. Licensees
typically pay a nonrefundable license issuance fee which is recognized as
revenue upon receipt. Revenues from the sale of prepaid cards for Internet
access and calling services are recognized as the customer utilizes the card or
when the card expires.

     Revenues for the three months ended September 30, 2005 decreased to $0.3
million from $0.4 million for the three months ended September 30, 2004, a
decrease of $0.1 million. This decrease was due to a significant decline in
demand for ESP's services in the fourth quarter of 2004, partially offset by
revenues from license fees generated by ESP's intellectual property portfolio
and services provided by AfriHUB at centers opened on two university campuses
in Nigeria during the fourth quarter of 2004. As ESP is no longer seeking new
client engagements and continues to focus on exploiting its intellectual
property portfolio and AfriHUB suspended its planned roll out of service to
several additional campuses, we expect revenues in the remaining quarters of
2005 to remain relatively unchanged.

   Cost of Revenues

     Cost of revenues includes the salaries and related employee benefits for
ESP employees that provide billable product development, consulting and
engineering services, as well as the cost of reimbursable expenses. Cost of
revenues also includes the costs incurred by AfriHUB to provide Internet access
and calling services. Cost of revenues for the three months ended September 30,
2005 decreased to $0.1 million from $0.4 million for the three months ended
September 30, 2004, a decrease of $0.3 million. This decrease was due to the
reduction in ESP's workforce in January 2005, partially offset by costs
incurred by AfriHUB following the opening of two centers at two university
campuses in Nigeria during the fourth quarter of 2004. As these costs relate to
our current operations, we expect cost of revenues to remain relatively
unchanged in future period as ESP has substantially completed the reduction in
its workforce and AfriHUB has suspended its planned roll out of service to
several additional campuses.

   Selling, General and Administrative Expense

     Selling, general and administrative expense includes facilities costs,
finance, legal and other corporate costs, as well as the salaries and related
employee benefits for those employees that support such functions. Selling,
general and administrative expense for the three months ended September 30,
2005 decreased to $1.9 million from $2.2 million for the three months ended
September 30, 2004, a decrease of $0.3 million. This decrease relates primarily
to decreases in expenses incurred by AfriHUB and ESP of $0.3 million and $0.2
million, respectively, in the three months ended September 30, 2005 as compared
to the three months ended September 30, 2004. Partially offsetting these
decreases in expenses was a $0.3 million increase in professional fees related
primarily to the contemplated special dividend distribution and the
contemplated merger with Motient. As these costs relate to our current
operations, we expect our selling, general and administrative expense,
excluding fluctuations arising from the non-cash items noted above, to decrease
in future periods as ESP has significantly reduced the size of its operations
and AfriHUB has suspended the planned roll out of its service to several
additional university campuses.

   Interest Income, Net

     Interest income, net for the three months ended September 30, 2005 is
comprised primarily of the interest earned on our cash, cash equivalents, and
short-term investments. Interest income, net for the three months ended
September 30, 2004 is comprised primarily of the interest earned on our cash,
cash equivalents, and short-term investments and on our notes receivable from
the MSV Joint Venture and Motient. Interest income, net for the three months
ended September 30, 2005 decreased to $0.3 million from $1.9 million for the
three months ended September 30, 2004, a decrease of $1.6 million. This
decrease relates primarily to the conversion of our notes receivable from the
MSV Joint Venture in November 2004 and the collection of all amounts due under
the notes receivable from Motient in 2004.

   Equity in Earnings of Hughes Network Systems, LLC

     Following our April 2005 acquisition of a 50% interest in HNS, we account
for our interest in HNS under the equity method in accordance with FIN 46R, as
HNS is a variable interest entity as defined in FIN 46R and we are not the
primary beneficiary as defined in FIN 46R. Accordingly, we record income
relating to our proportionate share of HNS' net income. For the three months
ended September 30, 2005, we recorded income of approximately $6.4 million.

   Equity in Loss of Mobile Satellite Ventures LP

     In November 2004, our notes receivable from the MSV Joint Venture, held
through our 80% owned MSV Investors Subsidiary, converted into approximately
23% of the outstanding limited partnership interests in the MSV Joint Venture.
Following the conversion, we account for our interest in the MSV Joint Venture
under the equity method and record expense relating to our proportionate share
of the MSV Joint Venture's net loss. For the three months ended September 30,
2005, we recorded expense of approximately $1.6 million.

   Gain (Loss) on Investment in Affiliates

     For the three months ended September 30, 2005, we recorded a gain on
investments in affiliates of approximately $0.4 million relating to the sale of
a portion of our interest in a company in which we invested in 1999 as part of
our former venture investment strategy. For the three months ended September
30, 2004, recorded a loss on investments in affiliates of approximately $0.4
million relating to our proportionate share of Navigauge's net loss. We will
continue to monitor the carrying value of our remaining investments in
affiliates.

   Minority Interest

     For the three months ended September 30, 2005, we recorded minority
interest of approximately $0.3 million relating to the equity in loss of the
MSV Joint Venture which is attributable to the group of unaffiliated third
parties who own approximately 20% of our MSV Investors Subsidiary. For the
three months ended September 30, 2004, we recorded minority interest of
approximately $0.2 million relating to the $0.3 million of equity in earnings,
primarily the interest income earned on the convertible notes from the MSV
Joint Venture, which is attributable to the group of unaffiliated third parties
who own approximately 20% of our MSV Investors Subsidiary, partially offset by
the $0.1 million of equity in loss attributable to the other shareholders in
AfriHUB.

   Gain from Discontinued Operations

     At the end of the third quarter of 2001, a decision to discontinue the
operations of Rare Medium, Inc. and its LiveMarket subsidiary was made in light
of their performance and prospects. For the three months ended September 30,
2005 and 2004, we recognized a gain of $0.8 million and nil, respectively, as a
result of the settlement of Rare Medium, Inc. liabilities at amounts less than
their recorded amounts.

   Net Income (Loss) Attributable to Common Stockholders

     For the three months ended September 30, 2005, we recorded net income
attributable to common stockholders of approximately $3.1 million. For the
three months ended September 30, 2004, we recorded net loss attributable to
common stockholders of approximately $3.5 million. Included in net income
attributable to common stockholders for each of the three months ended
September 30, 2005 and 2004 was $2.5 million of dividends and accretion related
to our Series A redeemable convertible preferred stock. Dividends were accrued
related to amounts payable quarterly on our Series A redeemable convertible
preferred stock and to the accretion of the carrying amount of the Series A
redeemable convertible preferred stock up to its $100 per share face redemption
amount over 13 years.

Results of Operations for the Nine Months Ended September 30, 2005 Compared to
the Nine Months Ended September 30, 2004

   Revenues

     Revenues are derived primarily from fees generated from (i) contracts for
product development, consulting and engineering services performed by ESP,
including reimbursable travel and other out-of pocket expenses, (ii) licensing
the right to use certain intellectual property owned by ESP and (iii) the sale
of prepaid cards for Internet access and calling services by AfriHUB. Revenues
from services performed by ESP are recognized using the
percentage-of-completion method for fixed price contracts and as time is
incurred for time and materials contracts, provided the collection of the
resulting receivable is reasonably assured. Revenues from licensing the right
to use intellectual property are recognized as the licensee manufactures
products incorporating or using the licensed intellectual property. Licensees
typically pay a nonrefundable license issuance fee which is recognized as
revenue upon receipt. Revenues from the sale of prepaid cards for Internet
access and calling services are recognized as the customer utilizes the card or
when the card expires.

     Revenues for the nine months ended September 30, 2005 decreased to $0.7
million from $1.8 million for the nine months ended September 30, 2004, a
decrease of $1.1 million. This decrease was due to a significant decline in
demand for ESP's services in the fourth quarter of 2004, partially offset by
revenues from license fees generated by ESP's intellectual property portfolio
and services provided by AfriHUB at centers opened on two university campuses
in Nigeria during the fourth quarter of 2004. As ESP is no longer seeking new
client engagements and continues to focus on exploiting its intellectual
property portfolio and AfriHUB has suspended its planned roll out of service to
several additional campuses, we expect revenues in the remaining quarters of
2005 to remain relatively unchanged.

   Cost of Revenues

     Cost of revenues includes the salaries and related employee benefits for
ESP employees that provide billable product development, consulting and
engineering services, as well as the cost of reimbursable expenses. Cost of
revenues also includes the costs incurred by AfriHUB to provide Internet access
and calling services. Cost of revenues for the nine months ended September 30,
2005 decreased to $0.4 million from $1.7 million for the nine months ended
September 30, 2004, a decrease of $1.3 million. This decrease was due to the
reduction in ESP's workforce in January 2005, partially offset by costs
incurred by AfriHUB following the opening of two centers at two university
campuses in Nigeria during the fourth quarter of 2004. As these costs relate to
our current operations, we expect cost of revenues to remain relatively
unchanged in future period as ESP has substantially completed the reduction in
its workforce and AfriHUB has suspended its planned roll out of service to
several additional campuses.

   Selling, General and Administrative Expense

     Selling, general and administrative expense includes facilities costs,
finance, legal and other corporate costs, as well as the salaries and related
employee benefits for those employees that support such functions. Selling,
general and administrative expense for the nine months ended September 30, 2005
increased to $6.6 million from $6.4 million for the nine months ended September
30, 2004, an increase of $0.2 million. This increase relates primarily to the
$1.1 million increase in professional fees related primarily to the
registration of the common stock sold in the December 2004 private placement,
several transactions which were not consummated, the special dividend
distribution and the contemplated merger with Motient and a $0.4 million
increase in non-cash compensation expense related to an option to purchase our
common stock issued to a consultant in June 2004. Partially offsetting these
increases were a $0.6 million decrease in non-cash compensation expense related
to the 2002 and 2001 repricing of certain stock options and a decrease in
expenses incurred by ESP and AfriHUB of $0.6 million and $0.1 million,
respectively, in the nine months ended September 30, 2005 as compared to the
nine months ended September 30, 2004. As these costs relate to our current
operations, we expect our selling, general and administrative expense,
excluding fluctuations arising from the non-cash items noted above, to decrease
in future periods as ESP has significantly reduced the size of its operations
and AfriHUB has suspended the planned roll out of its service to several
additional university campuses.

   Impairment Charge

     As a result of our decision to cease providing funding to AfriHUB, as of
June 30, 2005, we evaluated AfriHUB's long-lived assets for recoverability and
determined that the undiscounted cash flows over the remaining expected life of
the two established centers was less than the carrying value of the assets
relating to those centers. Accordingly, we assessed the fair value of these
assets by estimating the recoverability of the computers and equipment upon a
sale. We recognized a non-cash impairment loss relating to the computers and
equipment as their carrying value exceeded the fair value by approximately $0.4
million.

   Interest Income, Net

     Interest income, net for the nine months ended September 30, 2005 is
comprised primarily of the interest earned on our cash, cash equivalents, and
short-term investments. Interest income, net for the nine months ended
September 30, 2004 is comprised primarily of the interest earned on our cash,
cash equivalents, and short-term investments and on our notes receivable from
the MSV Joint Venture, Verestar and Motient. Interest income, net for the nine
months ended September 30, 2005 decreased to $1.1 million from $9.5 million for
the nine months ended September 30, 2004, a decrease of $8.4 million. This
decrease relates primarily to the conversion of our notes receivable from the
MSV Joint Venture in November 2004 and the collection of all amounts due under
the notes receivable from Motient and Verestar in 2004.

   Equity in Earnings of Hughes Network Systems, LLC

     Following our April 2005 acquisition of a 50% interest in HNS, we account
for our interest in HNS under the equity method in accordance with FIN 46R, as
HNS is a variable interest entity as defined in FIN 46R and we are not the
primary beneficiary as defined in FIN 46R. Accordingly, we record income
relating to our proportionate share of HNS' net income. For the period
following the April 22, 2005 acquisition through September 30, 2005, we
recorded income of approximately $12.9 million.

   Equity in Loss of Mobile Satellite Ventures LP

     In November 2004, our notes receivable from the MSV Joint Venture, held
through our 80% owned MSV Investors Subsidiary, converted into approximately
23% of the outstanding limited partnership interests in the MSV Joint Venture.
Following the conversion, we account for our interest in the MSV Joint Venture
under the equity method and record expense relating to our proportionate share
of the MSV Joint Venture's net loss. For the nine months ended September 30,
2005, we recorded expense of approximately $7.5 million.

   Loss on Investment in Affiliates

     For the nine months ended September 30, 2005, we recorded a loss on
investments in affiliates of approximately $1.2 million consisting of $1.3
million relating to the impairment of the short-term promissory notes purchased
from Navigauge and $0.3 million relating to our proportionate share of
Navigauge's net loss, partially offset by a $0.4 million gain relating to the
sale of a portion of our interest in a company in which we invested in 1999 as
part of our former venture investment strategy. For the nine months ended
September 30, 2004, we recorded a loss on investments in affiliates of
approximately $1.0 million relating to our proportionate share of Navigauge's
net loss. We will continue to monitor the carrying value of our remaining
investments in affiliates.

   Minority Interest

     For the nine months ended September 30, 2005, we recorded minority
interest of approximately $1.5 million relating to the equity in loss of the
MSV Joint Venture which is attributable to the group of unaffiliated third
parties who own approximately 20% of our MSV Investors Subsidiary. For the nine
months ended September 30, 2004, we recorded minority interest of approximately
$0.6 million relating to the $0.8 million of equity in earnings, primarily the
interest income earned on the convertible notes from the MSV Joint Venture,
which is attributable to the group of unaffiliated third parties who own
approximately 20% of our MSV Investors Subsidiary, partially offset by the $0.2
million of equity in loss attributable to the other shareholders in AfriHUB.

   Gain from Discontinued Operations

     At the end of the third quarter of 2001, a decision to discontinue the
operations of Rare Medium, Inc. and its LiveMarket subsidiary was made in light
of their performance and prospects. For the nine months ended September 30,
2005 and 2004, we recognized a gain of $0.8 million and nil, respectively, as a
result of the settlement of Rare Medium, Inc. liabilities at amounts less than
their recorded amounts.

   Net Income (Loss) Attributable to Common Stockholders

     For the nine months ended September 30, 2005, we recorded net loss
attributable to common stockholders of approximately $5.8 million. For the nine
months ended September 30, 2004, we recorded net income attributable to common
stockholders of approximately $14.9 million. Included in net income (loss)
attributable to common stockholders for the nine months ended September 30,
2005 and 2004 was $7.5 million and $7.4 million, respectively, of dividends and
accretion related to our Series A redeemable convertible preferred stock.
Dividends were accrued related to amounts payable quarterly on our Series A
redeemable convertible preferred stock and to the accretion of the carrying
amount of the Series A redeemable convertible preferred stock up to its $100
per share face redemption amount over 13 years.

Liquidity and Capital Resources

     We had approximately $33.7 million in cash, cash equivalents and
short-term investments as of September 30, 2005. Cash used in operating
activities from continuing operations was approximately $3.4 million for the
nine months ended September 30, 2005 and resulted primarily from cash used for
general corporate overhead including payroll and professional fees. Cash used
by discontinued operations was approximately $0.4 million for the nine months
ended September 30, 2005 and resulted from cash used for settlement of vendor
liabilities and legal and advisory fees.

     For the nine months ended September 30, 2005, cash used in investing
activities, excluding purchases and sales of short-term investments, was $53.1
million and resulted primarily from the $50.0 million used to purchase our 50%
of the Class A membership interests of HNS. Other than the $100.0 million
purchase price for the remaining 50% of the Class A membership interests of
HNS, we do not have any future funding commitments with respect to any of our
investments.

   Apollo Financing Commitment and Rights Offering

     As discussed above, on November 10, 2005, we, through Holdings, entered
into an agreement with DTV to acquire the remaining 50% of the Class A
membership interests of HNS for $100.0 million in cash. To finance the
transaction, Holdings has received a commitment for $100.0 million of
short-term debt financing from Apollo. Concurrent with the special dividend
distribution of the common stock of Holdings to our stockholders, we expect
that Holdings will conduct a rights offering to its stockholders in order to
repay the short-term debt financing provided by Apollo. In connection with such
rights offering, Apollo has agreed to subscribe for the maximum number of
shares of common stock allocated to it, including the exercise of pro rata
over-subscription rights. The exercise by Apollo of its rights would occur by
converting the outstanding amounts due under the short-term debt financing into
shares of common stock of Holdings at the subscription price in the rights
offering. The unconverted principal and interest obligations under the
short-term debt financing would be repaid in cash immediately following the
consummation of the rights offering.

   Series A Redeemable Convertible Preferred Stock Dividend

     In accordance with the terms of our preferred stock, the holders are
entitled to receive quarterly cash dividends commencing on July 1, 2004. The
quarterly payment of approximately $1.4 million, for the three months ended
December 31, 2004, was declared and paid on January 13, 2005. The quarterly
payment of approximately $1.4 million, for the three months ended March 31,
2005, was declared on April 18, 2005 and paid on April 22, 2005. The quarterly
payment of approximately $1.4 million, for the three months ended June 30,
2005, was declared and paid on July 22, 2005. The quarterly payment of
approximately $1.4 million, for the three months ended September 30, 2005, was
declared and paid on November 7, 2005. The aggregate annual dividend payment
will be approximately $5.6 million through the mandatory redemption on June 30,
2012 or such earlier time as the terms of the preferred stock are renegotiated.

   AfriHUB Short-Term Borrowing

     In August 2005, AfriHUB's Nigerian subsidiary borrowed approximately $0.2
million of short-term financing from a Nigerian bank under a term loan to fund
the investment necessary to establish a facility on an additional university
campus. The short-term borrowing, which is denominated in Nigerian Naira, is
due in August 2006 and bears interest at an annual rate of 19% as of September
30, 2005. The interest rate is subject to change based on fluctuations of the
bank's money market rate. We have not guaranteed any amounts owed under the
short-term borrowing.

Recently Issued Accounting Standards

     In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment"
("SFAS No. 123R"), a revision of SFAS No. 123. SFAS No. 123R requires entities
to recognize compensation expense for all share-based payments to employees,
including stock options, based on the estimated fair value of the instrument on
the date it is granted. The expense will be recognized over the vesting period
of the award. SFAS No. 123R is effective for annual periods beginning after
June 15, 2005 and provides entities two transition methods. Under the modified
prospective method, compensation expense is recognized beginning with the
effective date for all awards granted to employees prior to the effective date
that are unvested on the effective date. The modified retrospective method is a
variation of the modified prospective method, except entities can restate all
prior periods presented or prior interim period in the year of adoption using
the amounts previously presented in the pro forma disclosure required by SFAS
No. 123. As we currently account for share-based payments using the intrinsic
value method as allowed by APB Opinion No. 25, the adoption of the fair value
method under SFAS No. 123R will have an impact on our results of operations.
However, the extent of the impact cannot be predicted at this time because it
will depend on levels of share-based payments granted in the future. Had we
adopted SFAS No. 123R 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 income (loss) and pro forma earnings (loss) per share in Note 9 to
our condensed consolidated financial statements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

   Interest Rate Risk

     As of September 30, 2005, we had $36.8 million of cash, cash equivalents,
restricted cash and short-term cash investments. These cash, cash equivalents,
restricted cash and short-term cash investments are subject to market risk due
to changes in interest rates. In accordance with our investment policy, we
diversify our investments among United States Treasury securities and other
high credit quality debt instruments that we believe to be low risk. We are
averse to principal loss and seek to preserve our invested funds by limiting
default risk and market risk.

   Foreign Currency Risk

     Through September 30, 2005, our results of operations, financial condition
and cash flows have not been materially affected by changes in the relative
value of non-U.S. currencies to the U.S. dollars. Financial statements of
AfriHUB's Nigerian operations are prepared using the Nigerian Naira as the
functional currency. As we do not use derivative financial instruments to limit
our exposure to fluctuations in the exchange rate with the Naira, we may
experience gains or losses in future periods. The impact of a hypothetical 10%
adverse change in exchange rates on the fair value of Naira denominated assets
and liabilities would be an estimated loss of less than $0.1 million as of
September 30, 2005.

Item 4.  Controls and Procedures

   Evaluation of Disclosure Controls and Procedures

     Our management, with the participation of our chief executive officer and
principal accounting officer, has evaluated the effectiveness of our disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act) as of the end of the period covered by this
report. Based on such evaluation, our chief executive officer and principal
accounting officer have concluded that, as of the end of such period, our
disclosure controls and procedures are effective in recording, processing,
summarizing and reporting, on a timely basis, information required to be
disclosed by us in the reports that we file or submit under the Exchange Act.

   Changes in Internal Control Over Financial Reporting

     There has been no change in our internal control over financial reporting
during the quarter ended September 30, 2005 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

                                    PART II

Item 1.  Legal Proceedings

     We and certain of our subsidiaries (along with the Engelhard Corporation)
are parties to an arbitration relating to certain agreements that existed
between or among the claimant and ICC Technologies, Inc., our former name, and
the Engelhard/ICC ("E/ICC") joint venture arising from the desiccant air
conditioning business that we and our subsidiaries sold in 1998. The claimant
has sought $8.5 million for (a) its alleged out of pocket losses in investing
in certain of E/ICC's technology, (b) unjust enrichment resulting from the
reorganization of E/ICC in 1998, and (c) lost profits arising from the fact
that it was allegedly forced to leave the air conditioning business when the
E/ICC joint venture was dissolved. We intend to vigorously dispute this action.

     In August 2003, a former California employee of our discontinued services
subsidiary, filed a putative class action against Rare Medium, Inc. and the
Company, and certain other former subsidiaries that were merged into Rare
Medium, Inc., in Los Angeles County Superior Court captioned Joe Robuck,
individually and on behalf of all similarly situated individuals v. Rare Medium
Group, Inc., Rare Medium L.A., Inc., Rare Medium, Inc., and Rare Medium Dallas,
Inc., Los Angeles County Superior Court Case No. BC300310. The plaintiff filed
the action as a putative class action and putative representative action
asserting that: (i) certain payments were purportedly due and went unpaid for
overtime for employees with five job titles; (ii) certain related violations of
California's overtime statute were committed when these employees were not paid
such allegedly due and unpaid overtime at the time of their termination; and
(iii) certain related alleged violations of California's unfair competition
statute were committed. Plaintiff seeks to recover for himself and all of the
putative class, alleged unpaid overtime, waiting time penalties (which can be
up to 30 days' pay for each person not paid all wages due at the time of
termination), interest, attorneys' fees, costs and disgorgement of profits
garnered as a result of the alleged failure to pay overtime. In August 2005, we
entered into a settlement agreement with the plaintiff pursuant to which the
class action will be dismissed without prejudice. As part of the agreement, we
received releases from thirteen individuals, each of whom received an
immaterial settlement payment. On October 3, 2005, the Court dismissed the
action without prejudice.

     Our discontinued services subsidiary was a defendant in an action brought
by a former landlord in New York State Supreme Court titled Forty Four Eighteen
Joint Venture v. Rare Medium, Inc., Index 602632/03. The landlord claimed
unspecified amounts for breach of the lease. In September 2005, Rare Medium,
Inc. settled the matter and paid the landlord $0.3 million.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

     None

Item 3.  Defaults Upon Senior Securities

     None

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

     None

Item 5.  Other Information

     None

Item 6.  Exhibits

     The following sets forth those exhibits filed pursuant to Item 601 of
Regulation S-K:

      Exhibit
       Number                           Description
      -------                           -----------
        31.1   -  Certification of Jeffrey A. Leddy, Chief Executive Officer
                  and President of SkyTerra Communications, Inc., required by
                  Rule 13a-14(a) of the Securities Exchange Act of 1934, as
                  adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002.

        31.2   -  Certification of Craig J. Kaufmann, Controller and Treasurer
                  of SkyTerra Communications, Inc., required by Rule 13a-14(a)
                  of the Securities Exchange Act of 1934, as adopted pursuant
                  to Section 302 of the Sarbanes-Oxley Act of 2002.

        32.1   -  Certification of Jeffrey A. Leddy, Chief Executive Officer
                  and President of SkyTerra Communications, Inc., Pursuant to
                  18 U.S.C Section 1350, as adopted pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.

        32.2   -  Certification of Craig J. Kaufmann, Controller and Treasurer
                  of SkyTerra Communications, Inc., Pursuant to 18 U.S.C
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.


<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


Date:  November 14, 2005           By:   /s/ JEFFREY A. LEDDY
                                        --------------------------------------
                                             Jeffrey A. Leddy
                                         Chief Executive Officer and President
                                         (Principal Executive Officer and
                                           Principal Financial Officer)

Date:  November 14, 2005           By:   /s/ CRAIG J. KAUFMANN
                                        --------------------------------------
                                         Craig J. Kaufmann
                                         Controller and Treasurer
                                         (Principal Accounting Officer)

<PAGE>



                                                               Exhibit 31.1

                                 CERTIFICATIONS

I, Jeffrey A. Leddy, certify that:

1.       I have reviewed this Form 10-Q of SkyTerra Communications, Inc.;

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

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

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

         a)   designed such disclosure controls and procedures, or caused such
              disclosure controls procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made
              known to us by others within those entities, particularly during
              the period in which this report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls
              and procedures, as of the end of the period covered by this
              report based on such evaluation; and

         c)   disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's most recent fiscal quarter (the registrant's fourth
              quarter in the case of an annual report) that has materially
              affected, or is reasonably likely to materially affect, the
              registrant's internal control over financial reporting; and

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

         a)   all significant deficiencies in the design or operation of
              internal controls over financial reporting which are reasonably
              likely to adversely affect the registrant's ability to record,
              process, summarize and report financial information; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal control over financial reporting.




         Date:  November 14, 2005     By: /s/ JEFFREY A. LEDDY
                                          -------------------------------------
                                          Jeffrey A. Leddy
                                          Chief Executive Officer and President
                                          (Principal Executive Officer and
                                           Principal Financial Officer)
<PAGE>


                                                              Exhibit 31.2

                                 CERTIFICATIONS

I, Craig J. Kaufmann, certify that:

1.       I have reviewed this Form 10-Q of SkyTerra Communications, Inc.;

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

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

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

         a)   designed such disclosure controls and procedures, or caused such
              disclosure controls procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made
              known to us by others within those entities, particularly during
              the period in which this report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls
              and procedures, as of the end of the period covered by this
              report based on such evaluation; and

         c)   disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's most recent fiscal quarter (the registrant's fourth
              quarter in the case of an annual report) that has materially
              affected, or is reasonably likely to materially affect, the
              registrant's internal control over financial reporting; and

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

         a)   all significant deficiencies in the design or operation of
              internal controls over financial reporting which are reasonably
              likely to adversely affect the registrant's ability to record,
              process, summarize and report financial information; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal control over financial reporting.



         Date:  November 14, 2005            By: /s/ CRAIG J. KAUFMANN
                                                 -----------------------------
                                                     Craig J. Kaufmann
                                                     Controller and Treasurer
                                                     (Principal Accounting
                                                     Officer)
<PAGE>


                                                                 Exhibit 32.1

                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, Jeffrey A. Leddy, Chief Executive Officer and President of SkyTerra
Communications, Inc. (the "Company"), hereby certifies, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that, to my knowledge:

(1)      The Company's Quarterly Report on Form 10-Q for the quarter ended
         September 30 2005, as filed with the Securities and Exchange
         Commission on the date hereof (the "Report"), fully complies with the
         requirements of Section 13(a) or 15(d) of the Securities Exchange Act
         of 1934; and

(2)      The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations
         of the Company.


                             By: /s/ JEFFREY A. LEDDY
                                 --------------------------------------------
                                 Name:  Jeffrey A. Leddy
                                 Title: Chief Executive Officer and President
                                        (Principal Executive Officer and
                                        Principal Financial Officer)
                                 Date:  November 14, 2005


     This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

     A signed original of this written statement required by Section 906, or
other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to the Company and
will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.
<PAGE>


                                                                 Exhibit 32.2


                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, Craig J. Kaufmann, Controller and Treasurer of SkyTerra Communications,
Inc. (the "Company"), hereby certifies, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:

(1)      The Company's Quarterly Report on Form 10-Q for the quarter ended
         September 30, 2005, as filed with the Securities and Exchange
         Commission on the date hereof (the "Report"), fully complies with the
         requirements of Section 13(a) or 15(d) of the Securities Exchange Act
         of 1934; and

(2)      The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations
         of the Company.


                                    By: /s/ CRAIG J. KAUFMANN
                                        -------------------------------------
                                        Name:   Craig J. Kaufmann
                                        Title:  Controller and Treasurer
                                                (Principal Accounting Officer)
                                        Date:   November 14, 2005


     This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

     A signed original of this written statement required by Section 906, or
other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to the Company and
will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.