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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



|x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2010, or
|- | ---------------------------------------------------------------------------------------------------------------------------------------------



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

Commission file number 001-33860

HUGHES Telematics, Inc.

(Exact name of registrant as specified in its
charter)



|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 26-0443717                             
|(State or other jurisdiction of incorporation or
organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|2002 Summit Boulevard, Suite 1800
Atlanta, Georgia             |  | 30319                                  
|(Address of principal executive offices)                       |  | (Zip Code)                             

Registrants telephone number, including area code: (404) 573-5800

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                           |  |                      |  |                                               |  |                             
|-------------------------- |  | -------------------- |  | --------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer  x |  | Non-accelerated filer   ̈                      |  | Smaller reporting company   ̈
|                           |  |                      |  | (Do not check if a smaller reporting company) |  |                             

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 8, 2010, 92,627,237 shares of the registrants common stock were outstanding.



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TABLE OF CONTENTS



|                               |  |                                                                                               |    |  |    | 
|------------------------------ |  | --------------------------------------------------------------------------------------------- | -- |  | -- | 
|PART I  FINANCIAL INFORMATION |  |                                                                                               | 1  | 
|                               |  | Item 1. Financial Statements                                                                  |    |  | 1  | 
|                               |  | Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations |    |  | 13 | 
|                               |  | Item 3. Quantitative and Qualitative Disclosures about Market Risk                            |    |  | 20 | 
|                               |  | Item 4. Controls and Procedures                                                               |    |  | 20 | 
|PART II  OTHER INFORMATION    |  |                                                                                               | 21 | 
|                               |  | Item 1. Legal Proceedings                                                                     |    |  | 21 | 
|                               |  | Item 1A. Risk Factors                                                                         |    |  | 21 | 
|                               |  | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                           |    |  | 21 | 
|                               |  | Item 3. Defaults Upon Senior Securities                                                       |    |  | 21 | 
|                               |  | Item 4. Reserved                                                                              |    |  | 21 | 
|                               |  | Item 5. Other Information                                                                     |    |  | 21 | 
|                               |  | Item 6. Exhibits                                                                              |    |  | 21 | 



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PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

HUGHES TELEMATICS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)



|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | -------- | - | ----------------- | - | -------- | -
|                                                                                                                                                                          |  | September 
30,2010 |          |   | December 
31,2009 |  
|                                                                                                                                                                          | 
|Assets                                                                                                                                                                    |  |                    |          |   |                   |   |          |  
|Current assets:                                                                                                                                                           |  |                    |          |   |                   |   |          |  
|Cash and cash equivalents                                                                                                                                                 |  | $                  | 17,347   |   |                   | $ | 28,368   |  
|Short-term investments                                                                                                                                                    |  |                    | 5,428    |   |                   |   |         |  
|Accounts receivable, net                                                                                                                                                  |  |                    | 9,812    |   |                   |   | 4,118    |  
|Inventories, net                                                                                                                                                          |  |                    | 117      |   |                   |   | 1,390    |  
|Prepaid expenses                                                                                                                                                          |  |                    | 975      |   |                   |   | 1,556    |  
|Other current assets                                                                                                                                                      |  |                    | 2,439    |   |                   |   | 2,119    |  
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Total current assets                                                                                                                                                      |  |                    | 36,118   |   |                   |   | 37,551   |  
|Restricted cash                                                                                                                                                           |  |                    | 856      |   |                   |   | 650      |  
|Property and equipment, net                                                                                                                                               |  |                    | 25,509   |   |                   |   | 30,128   |  
|Capitalized software, net                                                                                                                                                 |  |                    | 18,639   |   |                   |   | 18,355   |  
|Intangible assets, net                                                                                                                                                    |  |                    | 13,445   |   |                   |   | 13,005   |  
|Goodwill                                                                                                                                                                  |  |                    | 5,169    |   |                   |   | 5,169    |  
|Debt issuance costs                                                                                                                                                       |  |                    | 4,241    |   |                   |   | 5,254    |  
|Other assets                                                                                                                                                              |  |                    | 7,468    |   |                   |   | 7,969    |  
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Total assets                                                                                                                                                              |  | $                  | 111,445  |   |                   | $ | 118,081  |  
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Liabilities and Stockholders Deficit                                                                                                                                     |  |                    |          |   |                   |   |          |  
|Current liabilities:                                                                                                                                                      |  |                    |          |   |                   |   |          |  
|Accounts payable                                                                                                                                                          |  | $                  | 5,348    |   |                   | $ | 7,521    |  
|Accrued liabilities                                                                                                                                                       |  |                    | 15,911   |   |                   |   | 7,943    |  
|Deferred revenue                                                                                                                                                          |  |                    | 6,583    |   |                   |   | 98       |  
|Current portion of capital lease obligations                                                                                                                              |  |                    | 1,825    |   |                   |   | 3,125    |  
|Current portion of long-term debt                                                                                                                                         |  |                    | 2,250    |   |                   |   | 8,316    |  
|Other current liabilities                                                                                                                                                 |  |                    | 2,294    |   |                   |   | 568      |  
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Total current liabilities                                                                                                                                                 |  |                    | 34,211   |   |                   |   | 27,571   |  
|Long-term debt                                                                                                                                                            |  |                    | 104,689  |   |                   |   | 91,140   |  
|Capital lease obligations                                                                                                                                                 |  |                    | 166      |   |                   |   | 1,599    |  
|Long-term deferred revenue                                                                                                                                                |  |                    | 12,781   |   |                   |   | 47       |  
|Other liabilities                                                                                                                                                         |  |                    | 1,737    |   |                   |   | 3,100    |  
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Total liabilities                                                                                                                                                         |  |                    | 153,584  |   |                   |   | 123,457  |  
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Commitments and contingencies (Note 13)                                                                                                                                   |  |                    |          |   |                   |   |          |  
|Stockholders deficit:                                                                                                                                                    |  |                    |          |   |                   |   |          |  
|Preferred stock, $0.0001 par value. Authorized 10,000,000 shares, no shares issued and outstanding at September 30, 2010 and
December 31, 2009                            |  |                    |         |   |                   |   |         |  
|Common stock, $0.0001 par value. Authorized 155,000,000 shares; issued and outstanding 92,627,237 shares at September 30,
2010 and 87,087,624 shares at December 31, 2009 |  |                    | 9        |   |                   |   | 9        |  
|Additional paid-in capital                                                                                                                                                |  |                    | 369,281  |   |                   |   | 352,159  |  
|Accumulated deficit                                                                                                                                                       |  |                    | (424,245 | ) |                   |   | (357,544 | )
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Total HUGHES Telematics, Inc. stockholders deficit                                                                                                                       |  |                    | (54,955  | ) |                   |   | (5,376   | )
|Non-controlling interests in consolidated subsidiary                                                                                                                      |  |                    | 12,816   |   |                   |   |         |  
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Total stockholders deficit                                                                                                                                               |  |                    | (42,139  | ) |                   |   | (5,376   | )
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  
|Total liabilities and stockholders deficit                                                                                                                               |  | $                  | 111,445  |   |                   | $ | 118,081  |  
|                                                                                                                                                                          |  |                    |          |   |                   |   |          |  

The accompanying notes are an integral part of these consolidated financial statements.



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HUGHES TELEMATICS,
INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share data)



|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|--------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                |  | Three Months Ended September 30, |            |   | Nine Months Ended September 30, |  
|                                                                |  | 2010                             |            |   | 2009                            |   |            | 2010 |  |   | 2009       |  
|Revenues:                                                       |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Services                                                        |  | $                                | 8,215      |   |                                 | $ | 5,845      |      |  | $ | 20,739     |   |  | $ | 16,750     |  
|Hardware                                                        |  |                                  | 2,559      |   |                                 |   | 2,868      |      |  |   | 7,629      |   |  |   | 7,818      |  
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Total revenues                                                  |  |                                  | 10,774     |   |                                 |   | 8,713      |      |  |   | 28,368     |   |  |   | 24,568     |  
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Costs and expenses:                                             |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Cost of services                                                |  |                                  | 6,427      |   |                                 |   | 1,755      |      |  |   | 18,075     |   |  |   | 5,023      |  
|Cost of hardware sold                                           |  |                                  | 2,210      |   |                                 |   | 2,136      |      |  |   | 6,623      |   |  |   | 6,104      |  
|Research and development                                        |  |                                  | 3,357      |   |                                 |   | 8,089      |      |  |   | 8,806      |   |  |   | 26,551     |  
|Sales and marketing                                             |  |                                  | 5,977      |   |                                 |   | 2,766      |      |  |   | 17,202     |   |  |   | 7,825      |  
|General and administrative                                      |  |                                  | 9,594      |   |                                 |   | 11,159     |      |  |   | 28,691     |   |  |   | 28,121     |  
|Impairment charges                                              |  |                                  |           |   |                                 |   | 20,762     |      |  |   |           |   |  |   | 20,762     |  
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Total costs and expenses                                        |  |                                  | 27,565     |   |                                 |   | 46,667     |      |  |   | 79,397     |   |  |   | 94,386     |  
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Loss from operations                                            |  |                                  | (16,791    | ) |                                 |   | (37,954    | )    |  |   | (51,029    | ) |  |   | (69,818    | )
|Interest income                                                 |  |                                  | 32         |   |                                 |   | 51         |      |  |   | 119        |   |  |   | 104        |  
|Interest expense                                                |  |                                  | (5,573     | ) |                                 |   | (3,195     | )    |  |   | (16,380    | ) |  |   | (9,385     | )
|Change in fair value of derivative instruments                  |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   | (62,316    | )
|Other (expense) income                                          |  |                                  | (16        | ) |                                 |   |           |      |  |   | (23        | ) |  |   |           |  
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Loss before income taxes                                        |  |                                  | (22,348    | ) |                                 |   | (41,098    | )    |  |   | (67,313    | ) |  |   | (141,415   | )
|Income tax expense                                              |  |                                  | 8          |   |                                 |   | 12         |      |  |   | 20         |   |  |   | 12         |  
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Net loss                                                        |  |                                  | (22,356    | ) |                                 |   | (41,110    | )    |  |   | (67,333    | ) |  |   | (141,427   | )
|Net loss attributable to non-controlling interests              |  |                                  | 497        |   |                                 |   |           |      |  |   | 632        |   |  |   |           |  
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Net loss attributable to HUGHES Telematics, Inc.                |  |                                  | (21,859    | ) |                                 |   | (41,110    | )    |  |   | (66,701    | ) |  |   | (141,427   | )
|Deemed dividend on and accretion of convertible preferred stock |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   | (56,619    | )
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Net loss attributable to common stockholders                    |  | $                                | (21,859    | ) |                                 | $ | (41,110    | )    |  | $ | (66,701    | ) |  | $ | (198,046   | )
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Basic and diluted loss per common share                         |  | $                                | (0.66      | ) |                                 | $ | (1.71      | )    |  | $ | (2.23      | ) |  | $ | (11.19     | )
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Basic and diluted weighted average common shares outstanding    |  |                                  | 33,191,993 |   |                                 |   | 24,042,090 |      |  |   | 29,949,581 |   |  |   | 17,692,728 |  
|                                                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  

The accompanying notes are an integral part of these consolidated financial statements.



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HUGHES TELEMATICS,
INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)



|                                                                                                                         |  |                                 |         |   |      |   |          |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------- | ------- | - | ---- | - | -------- | -
|                                                                                                                         |  | Nine Months Ended September 30, |        
|                                                                                                                         |  | 2010                            |         |   | 2009 |  
|Cash flows from operating activities:                                                                                    |  |                                 |         |   |      |   |          |  
|Net loss                                                                                                                 |  | $                               | (67,333 | ) |      | $ | (141,427 | )
|Adjustments to reconcile net loss to net cash used in operating activities:                                              |  |                                 |         |   |      |   |          |  
|Depreciation and amortization                                                                                            |  |                                 | 10,274  |   |      |   | 7,486    |  
|Change in fair value of derivative instruments                                                                           |  |                                 |        |   |      |   | 62,316   |  
|Non-cash impairment charges                                                                                              |  |                                 |        |   |      |   | 19,097   |  
|Interest expense on long-term debt and capital leases                                                                    |  |                                 | 5,954   |   |      |   | 5,522    |  
|Interest expense on Series A Redeemable Preferred Stock                                                                  |  |                                 |        |   |      |   | 496      |  
|Amortization of debt issuance costs and discounts on long-term debt                                                      |  |                                 | 4,608   |   |      |   | 3,362    |  
|Share-based compensation expense                                                                                         |  |                                 | 2,126   |   |      |   | 975      |  
|Contribution of non-cash services to Lifecomm LLC                                                                        |  |                                 | 448     |   |      |   |         |  
|Loss on sale of property and equipment                                                                                   |  |                                 | 72      |   |      |   |         |  
|Changes in assets and liabilities:                                                                                       |  |                                 |         |   |      |   |          |  
|Accounts receivable, net                                                                                                 |  |                                 | (5,694  | ) |      |   | 1,751    |  
|Inventories, net                                                                                                         |  |                                 | 1,274   |   |      |   | 180      |  
|Prepaid expenses and other assets                                                                                        |  |                                 | 859     |   |      |   | (7,127   | )
|Accounts payable and accrued and other liabilities                                                                       |  |                                 | 6,004   |   |      |   | 12,478   |  
|Deferred revenue                                                                                                         |  |                                 | 19,219  |   |      |   | (264     | )
|                                                                                                                         |  |                                 |         |   |      |   |          |  
|Net cash used in operating activities                                                                                    |  |                                 | (22,189 | ) |      |   | (35,155  | )
|                                                                                                                         |  |                                 |         |   |      |   |          |  
|Cash flows from investing activities:                                                                                    |  |                                 |         |   |      |   |          |  
|Purchases of property and equipment                                                                                      |  |                                 | (983    | ) |      |   | (11,231  | )
|Proceeds from sale of property and equipment                                                                             |  |                                 | 495     |   |      |   |         |  
|Increase in capitalized software                                                                                         |  |                                 | (2,679  | ) |      |   | (10,241  | )
|Purchases of short-term investments                                                                                      |  |                                 | (7,273  | ) |      |   |         |  
|Maturity of short-term investments                                                                                       |  |                                 | 1,845   |   |      |   |         |  
|(Increase) Decrease in restricted cash                                                                                   |  |                                 | (206    | ) |      |   | 8,633    |  
|                                                                                                                         |  |                                 |         |   |      |   |          |  
|Net cash used in investing activities                                                                                    |  |                                 | (8,801  | ) |      |   | (12,839  | )
|                                                                                                                         |  |                                 |         |   |      |   |          |  
|Cash flows from financing activities:                                                                                    |  |                                 |         |   |      |   |          |  
|Proceeds from the issuance of common stock, net of costs                                                                 |  |                                 | 14,884  |   |      |   |         |  
|Proceeds from sale of non-controlling interest in consolidated subsidiary                                                |  |                                 | 10,000  |   |      |   |         |  
|Proceeds from merger with Polaris Acquisition Corp.                                                                      |  |                                 |        |   |      |   | 97,242   |  
|Proceeds from the issuance of Series B Convertible Preferred Stock, net of costs                                         |  |                                 |        |   |      |   | 35,220   |  
|Repayment of capital lease obligations                                                                                   |  |                                 | (3,231  | ) |      |   | (5,961   | )
|Repayment of long-term debt                                                                                              |  |                                 | (1,684  | ) |      |   |         |  
|Repurchase of common stock                                                                                               |  |                                 |        |   |      |   | (74,356  | )
|Payment of fees related to warrant exchange                                                                              |  |                                 |        |   |      |   | (200     | )
|Proceeds from the exercise of warrants                                                                                   |  |                                 |        |   |      |   | 54       |  
|                                                                                                                         |  |                                 |         |   |      |   |          |  
|Net cash provided by financing activities                                                                                |  |                                 | 19,969  |   |      |   | 51,999   |  
|                                                                                                                         |  |                                 |         |   |      |   |          |  
|Net (decrease) increase in cash and cash equivalents                                                                     |  |                                 | (11,021 | ) |      |   | 4,005    |  
|Cash and cash equivalents, beginning of period                                                                           |  |                                 | 28,368  |   |      |   | 17,837   |  
|                                                                                                                         |  |                                 |         |   |      |   |          |  
|Cash and cash equivalents, end of period                                                                                 |  | $                               | 17,347  |   |      | $ | 21,842   |  
|                                                                                                                         |  |                                 |         |   |      |   |          |  
|Supplemental noncash disclosure:                                                                                         |  |                                 |         |   |      |   |          |  
|Property and equipment acquired by capital lease obligations                                                             |  | $                               | 277     |   |      | $ | 6,302    |  
|Issuance of Series B Convertible Preferred Stock in exchange for a trade payable                                         |  | $                               |        |   |      | $ | 13,000   |  
|Issuance of common stock in connection with the exercise of warrants using shares of Series A Redeemable Preferred
Stock |  | $                               |        |   |      | $ | 207,218  |  
|Issuance of common stock in exchange for Series A Redeemable Preferred Stock                                             |  | $                               |        |   |      | $ | 20,000   |  
|Issuance of common stock in exchange for Series B Convertible Preferred Stock                                            |  | $                               |        |   |      | $ | 109,750  |  

The accompanying notes
are an integral part of these consolidated financial statements.



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HUGHES TELEMATICS,
INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT

(Unaudited)

(In thousands, except share data)



|                                                                            |  |              |            |  |                    |   |   |             |  |   |                                            |  |  |                     |          |   |         |   |        |   |  |   |         |  
|--------------------------------------------------------------------------- |  | ------------ | ---------- |  | ------------------ | - | - | ----------- |  | - | ------------------------------------------ |  |  | ------------------- | -------- | - | ------- | - | ------ | - |  | - | ------- | -
|                                                                            |  | Common Stock |            |  | Additional Paid-In |   |   | Accumulated |  |   | Non- Controlling Interests in
Consolidated |  |  | Total Stockholders |         
|                                                                            |  | Shares       |            |  | Amount             |   |   | Capital     |  |   | Deficit                                    |  |  | Subsidiary          |          |   | Deficit |  
|Balance, December 31, 2009                                                  |  |              | 87,087,624 |  |                    | $ | 9 |             |  | $ | 352,159                                    |  |  | $                   | (357,544 | ) |         | $ |       |   |  | $ | (5,376  | )
|Issuance of common stock in connection with private placement, net of costs |  |              | 5,130,500  |  |                    |   |  |             |  |   | 14,996                                     |  |  |                     |         |   |         |   |       |   |  |   | 14,996  |  
|Share-based compensation expense                                            |  |              | 409,113    |  |                    |   |  |             |  |   | 2,126                                      |  |  |                     |         |   |         |   |       |   |  |   | 2,126   |  
|Contributions in connection with the formation of Lifecomm LLC              |  |              |           |  |                    |   |  |             |  |   |                                           |  |  |                     |         |   |         |   | 13,000 |   |  |   | 13,000  |  
|Contribution of non-cash services to Lifecomm LLC                           |  |              |           |  |                    |   |  |             |  |   |                                           |  |  |                     |         |   |         |   | 448    |   |  |   | 448     |  
|Net loss                                                                    |  |              |           |  |                    |   |  |             |  |   |                                           |  |  |                     | (66,701  | ) |         |   | (632   | ) |  |   | (67,333 | )
|                                                                            |  |              |            |  |                    |   |   |             |  |   |                                            |  |  |                     |          |   |         |   |        |   |  |   |         |  
|Balance, September 30, 2010                                                 |  |              | 92,627,237 |  |                    | $ | 9 |             |  | $ | 369,281                                    |  |  | $                   | (424,245 | ) |         | $ | 12,816 |   |  | $ | (42,139 | )
|                                                                            |  |              |            |  |                    |   |   |             |  |   |                                            |  |  |                     |          |   |         |   |        |   |  |   |         |  



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HUGHES TELEMATICS,
INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|(1) | Description of Business
|--- | -----------------------

HUGHES Telematics, Inc. (together with our consolidated subsidiaries, we, us and our) is a telematics
services company that provides a suite of real-time voice and data communications services and applications for use in vehicles and is developing additional applications for use within and outside of the automotive industry. These services and
applications are enabled through a state-of-the-art communications center designed with flexibility to connect various mobile devices with content, services and call centers. Our system architecture enables us to manage the integration of these
components and the associated service delivery in an efficient manner, allowing us to quickly adopt and implement new technologies and services.

Within the automotive industry, our communications center allows for two way voice and data communications to vehicles and supports, among other things, critical safety and security services as well as
location-based services and remote diagnostics. Since November 16, 2009, we have been the exclusive telematics service provider in the United States for new vehicles sold by Mercedes-Benz USA, LLC (Mercedes-Benz), as well as the
preferred provider of telematics services for Mercedes-Benz vehicles purchased prior to November 16, 2008. These services are marketed under the mbrace brand and are enabled through a factory-installed hardware device on Mercedes-Benz
vehicles. In addition, our in-Drive product offers services to consumers or other third parties through an aftermarket hardware device that we have developed and which we intend to distribute through relationships with companies and
organizations with large customer bases for installation in existing vehicles. Additionally, through Networkfleet, Inc. (Networkfleet), our wholly-owned subsidiary, we currently offer remote vehicle monitoring and other data services to
support owners and operators of fleets of vehicles.

On May 12, 2010, we entered into a limited liability company
agreement (the LLC Agreement) with QUALCOMM Incorporated (Qualcomm), a leader in developing and delivering innovative digital wireless communications products and services, and American Medical Alert Corp. (AMAC),
a healthcare communications company dedicated to the provision of support services to the healthcare community, forming Lifecomm LLC (Lifecomm). Lifecomm intends to design, develop, finance and operate a mobile personal emergency
response service which will permit subscribers to initiate requests for emergency assistance services through a wearable device that is able to communicate information to and support voice interactions between the subscriber and an emergency
assistance call center for purposes of dispatching first responders to the subscribers location. Lifecomm expects to launch its service offerings in the fourth quarter of 2011.



|(2) | Basis of Presentation
|--- | ---------------------

We
have prepared the accompanying consolidated financial statements in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X and include our accounts and the accounts of our wholly-owned subsidiary, Networkfleet, and our majority-owned subsidiary, Lifecomm, following the formation of Lifecomm. The accompanying consolidated financial statements do not
include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying consolidated financial statements contain all adjustments, consisting only of those of a normal recurring
nature, necessary for a fair presentation of our financial position, results of operations and cash flows at the dates and for the periods indicated. While we believe that the disclosures presented are adequate to make the information not
misleading, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2009 and the related notes thereto which have been included in our annual
report on Form 10-K filed with the Securities and Exchange Commission (the SEC) on March 16, 2010. The results of the three and nine months ended September 30, 2010 are not necessarily indicative of the results to be expected
for the full year. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to current presentation.

During the nine months ended September 30, 2010 and the years ended December 31, 2009, 2008 and 2007, we incurred a net loss of approximately $66.7 million, $163.7 million, $57.5 million and
$32.3 million, respectively, and used cash in operations of approximately $22.2 million, $47.2 million, $39.1 million and $23.6 million, respectively. As of September 30, 2010, we had unrestricted cash, cash equivalents and short-term
investments of approximately $22.8 million and an accumulated deficit of approximately $424.2 million. As a result of our historical net losses and our limited capital resources, our independent registered public accounting firms report on our
financial statements as of and for the year ended December 31, 2009 includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. We cannot provide assurance that our net losses and negative
cash flow will not surpass our expectations, and thus, we may be required to raise additional capital in the future or to reduce our operating expenditures. This additional financing may take the form of loans under a new credit facility, the
issuance of bonds or other types of debt securities, the issuance of equity securities or a combination of the foregoing. Any such financing must either comply with the covenants of our existing



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credit facilities, or we will need to obtain waivers from the lenders. Our credit facilities contain covenants that restrict our ability to incur debt and require mandatory prepayments from the
proceeds of an equity financing. Any debt financing obtained may impose various restrictions and additional covenants on us which could limit our ability to respond to market conditions, provide for unanticipated capital investments or take
advantage of business opportunities and may subject us to significant interest expense. Additional equity financing may be obtained on terms that are dilutive to the interests of existing stockholders. We have been successful in the past raising
capital to address our liquidity needs; however, debt or additional equity financing may not be available when needed in the future on terms favorable to us or at all, and the failure to attract a sufficient amount of additional debt or equity
capital may impair our ability to execute on our business plan. Such additional capital may be provided by, among other things, the cash proceeds from the exercise of the outstanding warrants to purchase shares of our common stock. There is no
assurance that we will be successful in obtaining additional financing, if needed, or that we will be able to reduce our operating expenditures. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.



|(3) | Merger with Polaris Acquisition Corp.
|--- | -------------------------------------

On March 31, 2009, pursuant to the terms of the Agreement and Plan of Merger dated June 13, 2008 (as amended and restated on November 10, 2008 and March 12, 2009, the Merger
Agreement), Hughes Telematics, Inc. (Old HTI), a privately held company, and Polaris Acquisition Corp. (Polaris), a publicly held blank check company, consummated the merger (the Merger) whereby Old HTI
merged with and into a wholly owned direct subsidiary of Polaris with Old HTI as the surviving corporation, and immediately thereafter, Old HTI merged with and into Polaris, with Polaris as the surviving corporation. In connection with the Merger,
Polaris changed its name from Polaris Acquisition Corp. to HUGHES Telematics, Inc. Upon closing of the Merger, the outstanding equity securities of Old HTI were exchanged for an aggregate of 77,102,149 shares of our common
stock, comprised of 19,854,018 initial shares and 57,248,131 earn-out shares. In addition, all options exercisable for Old HTI common stock issued and outstanding immediately prior to the Merger were exchanged for options exercisable for an
aggregate of 2,274,935 shares of our common stock, which includes 1,751,859 earn-out options. The earn-out shares, which were issued into escrow, will be released to the Old HTI stockholders and the earn-out options will be eligible to be exercised,
according to their terms, by the optionholders, each in three tranches, upon the trading share price of our common stock reaching at least $20.00, $24.50 and $30.50 (as may be adjusted or amended in accordance with the escrow agreement) within
certain measurement periods over the five-year period following the closing of the Merger.

The Old HTI stockholders placed
5,782,661 shares of our common stock, comprised of 1,489,053 initial shares and 4,293,608 earn-out shares, in escrow until June 30, 2010 to indemnify us for the payment of indemnification claims that may be made as a result of breaches of Old
HTIs covenants, representations and warranties in the Merger Agreement. As there were no indemnification claims, in July 2010, the 1,489,053 initial shares were released to the Old HTI stockholders from escrow. The 4,293,608 earn-out shares
remain in escrow and will be released in accordance with the escrow agreement upon the achievement of the trading share price targets stated above.

Pursuant to the Merger Agreement, the Polaris founders agreed to deposit an aggregate of 1,250,000 shares of our common stock into escrow at closing with such shares being released upon the achievement of
the first share price target between the first and fifth anniversary of closing. Upon consummation of the Merger, the Polaris founders also transferred an aggregate of 168,000 shares of common stock to us with such shares immediately cancelled.

In order to consummate the Merger, we agreed to purchase an aggregate of 7,439,978 shares of our common stock from a limited
number of institutional shareholders in separate and privately negotiated transactions which were executed prior to the conclusion of the special meeting in which Polaris shareholders voted on the Merger. On April 2, 2009, we consummated
these purchases using approximately $74.4 million of the approximately $97.2 million of cash received from Polaris in connection with the Merger.

Notwithstanding the legal form of the transaction, the Merger has been accounted for under the purchase method of accounting as a reverse acquisition, equivalent to a recapitalization, through the
issuance of stock by Old HTI for the net monetary assets of Polaris. The determination of Old HTI as the accounting acquirer was made based on consideration of all quantitative and qualitative factors of the Merger, including significant
consideration given to the fact that following consummation of the Merger (i) the stockholders of Old HTI controlled a majority of our voting power, (ii) the controlling stockholder of Old HTI prior to the Merger, together with its
affiliates, controlled approximately 70% of our voting power after the merger and had the right to select a majority of the members of our board of directors and (iii) the management of Old HTI continued in all executive officer and other
senior management positions and, accordingly, had day-to-day authority to carry out the business plan after the Merger. Accordingly, our historical financial statements prior to March 31, 2009 are the historical financial statements of Old HTI.
The consolidated financial statements of Old HTI have been retroactively restated to reflect the recapitalization of Old HTI with the 77,102,149 shares of common stock issued to Old HTI equity holders in connection with the Merger.



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|(4) | Formation of Lifecomm LLC
|--- | -------------------------

On May 12, 2010, we entered into the LLC Agreement with Qualcomm and AMAC forming Lifecomm. Under the terms of the LLC Agreement,
each of the parties provided cash and/or immediate and future in-kind contributions to Lifecomm. Specifically, in exchange for approximately 54% of the membership interests of Lifecomm, we entered into (i) an Infrastructure Access Agreement
with Lifecomm pursuant to which we will provide access to our telematics platform and infrastructure which will enable Lifecomm to provide service to its customers and (ii) a Services Agreement with Lifecomm pursuant to which we will provide,
over no more than six years, $10.9 million of in-kind selling, general and administrative services (based on agreed upon billing rates set forth in the Services Agreement) to support the venture. In addition, we agreed to enter into a
Telematics Services Agreement that will include, among other things, a per-user per-month fee for wireless connectivity, billing, portal access and other associated services. In exchange for approximately 36% of the membership interests,
Qualcomm (i) provided $6.0 million of cash, (ii) entered into a Know-How License Agreement pursuant to which Lifecomm licensed certain know-how previously developed by Qualcomm and also provided Lifecomm access to the Lifecomm
name and (iii) a Services Agreement with Lifecomm pursuant to which Qualcomm will contribute a portion of the value of certain future engineering and project management services, up to an aggregate value of $5.0 million. In exchange for
approximately 10% of the membership interests, AMAC (i) provided $4.0 million of cash and (ii) entered into a Value Added Reseller Agreement pursuant to which AMAC will be a preferred distributor of Lifecomms products and
services. In addition, pursuant to the LLC Agreement, each member has agreed to fund its pro rata share of a $2.0 million stand-by equity commitment for Lifecomms benefit. Assuming Lifecomm draws the entire commitment, we will be
required to provide approximately $1.1 million of cash. During the three and nine months ended September 30, 2010, we provided approximately $0.3 million and $0.5 million, respectively, of in-kind services to Lifecomm.

Each of the initial members have preemptive rights with respect to future issuances of securities by Lifecomm, as well as rights of first
offer, drag-along and tag-along rights on transfers of securities by the other members. In addition, for a two year period beginning on May 12, 2014, any member (or group of members) holding at least 25% of the membership interests in
Lifecomm will have the right to demand either an auction for the sale of Lifecomm or an initial public offering of Lifecomm. Should Lifecomm fail to achieve either of these liquidity events within 180 days of the demand, then to the extent at
such time we hold at least 50% of the outstanding membership interests of Lifecomm and our common stock is publicly traded, each other member will be entitled on a one-time basis to exchange all of its membership interests in Lifecomm for shares of
our common stock with equivalent fair market value. While we determined that such right to exchange is a freestanding derivative instrument, as the fair market value of our common stock to be issued in the exchange will be equal to the fair market
value of the membership interests of Lifecomm received, the value of the derivative instrument is not material as of September 30, 2010.

In accordance with the applicable accounting guidance governing consolidation, we have determined that Lifecomm is a variable interest entity (VIE) for which we are the primary beneficiary.
Accordingly, we have included Lifecomms financial position, results of operations and cash flows in our consolidated financial statements as of September 30, 2010 and for the three months ended September 30, 2010 and such period
following the formation of Lifecomm during the nine months ended September 30, 2010. As of September 30, 2010, Lifecomms assets consisted of approximately $5.7 million of cash and cash equivalents, approximately $4.2 million of
short-term investments that are held-to-maturity and $3.0 million of intangible assets, and its liabilities consisted of approximately $0.4 million of accounts payable.



|(5) | Recent Accounting Pronouncements
|--- | --------------------------------

Recently Adopted Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued new accounting guidance which amends the evaluation criteria to identify the primary beneficiary of a VIE and requires
ongoing reassessment of whether an enterprise is the primary beneficiary of the VIE. The new guidance significantly changes the consolidation rules for VIEs including the consolidation of common structures, such as joint ventures, equity method
investments and collaboration arrangements. The guidance is applicable to all new and existing VIEs and became effective for us on January 1, 2010. As we have determined that Lifecomm is a VIE for which we are the primary beneficiary, we have
included Lifecomms financial position, results of operations and cash flows in our consolidated financial statements as of September 30, 2010 and for the three months ended September 30, 2010 and such period following the formation
of Lifecomm during the nine months ended September 30, 2010.

Recently Issued Pronouncements

In September 2009, the Emerging Issues Task Force (EITF) issued revised guidance governing revenue arrangements with multiple
deliverables, which provides a greater ability to separate and allocate arrangement consideration in a multiple element revenue arrangement. The revised guidance requires the use of an estimated selling price to allocate arrangement consideration,
and eliminates the residual method of allocation. This guidance will be effective for us on January 1, 2011 and is not expected have a material effect on our financial position, results of operations or cash flows.



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In September 2009, the EITF issued revised guidance governing certain revenue arrangements
that include software elements, which amends the scope of existing guidance to exclude tangible products that include software and non-software components that function together to deliver the products essential functionality. This guidance
will be effective for us on January 1, 2011 and is not expected have a material effect on our financial position, results of operations or cash flows.



|(6) | Long-Term Debt
|--- | --------------

The
components of long-term debt were as follows:



|                                               |  |                   |         |   |                  |   |        |  
|---------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------ | -
|                                               |  | September 30,2010 |         |   | December 31,2009 |  
|                                               |  | (in thousands)    |        
|Senior secured term indebtedness               |  | $                 | 69,571  |   |                  | $ | 65,181 |  
|Second lien secured term indebtedness          |  |                   | 11,561  |   |                  |   | 9,608  |  
|Senior unsecured promissory note               |  |                   | 6,632   |   |                  |   | 8,316  |  
|Senior subordinated unsecured promissory notes |  |                   | 19,175  |   |                  |   | 16,351 |  
|                                               |  |                   |         |   |                  |   |        |  
|Total indebtedness                             |  |                   | 106,939 |   |                  |   | 99,456 |  
|Less current portion                           |  |                   | (2,250  | ) |                  |   | (8,316 | )
|                                               |  |                   |         |   |                  |   |        |  
|Total long-term debt, net of current portion   |  | $                 | 104,689 |   |                  | $ | 91,140 |  
|                                               |  |                   |         |   |                  |   |        |  

Senior Secured Term Indebtedness

On March 31, 2008, we entered into a credit agreement (as amended and restated, the First Lien Credit Agreement) pursuant to which we issued in multiple tranches during the year ended
December 31, 2008 for aggregate consideration of $60.0 million, senior secured term indebtedness due March 31, 2013 with an original principal amount of $60.0 million and warrants to purchase the equivalent of 4,801,112 shares of our
common stock, comprised of 1,103,922 initial shares and 3,697,190 earn-out shares, at an equivalent exercise price of less than $0.01 per share.

As of each issuance date, we ascribed value to the senior secured term indebtedness and the related warrants based on their relative fair values. As such, an aggregate of $46.9 million was allocated to
the senior secured term indebtedness and an aggregate of $12.1 million was allocated to the warrants. The resulting discount from the face value of the senior secured term indebtedness resulting from the ascribed value to the warrants is being
amortized as additional interest expense over the term of the senior secured term indebtedness using the effective interest rate method. As of September 30, 2010, the fair value of the senior secured indebtedness approximated carrying value.

Second Lien Term Indebtedness

On December 17, 2009, we entered into a credit agreement (the Second Lien Credit Agreement) with PLASE HT, LLC (PLASE HT), as administrative agent, collateral agent and
original lender, pursuant to which we issued indebtedness due October 1, 2013 with an original principal amount of $15.0 million and warrants to purchase 3,000,000 shares of common stock at an exercise price of $6.00 per share. PLASE HT is an
affiliate of Apollo Global Management LLC (Apollo) and of our controlling stockholder, Communications Investors, LLC (Communications LLC). The loans under the Second Lien Credit Agreement bear interest at 9.00% per
annum, payable-in-kind, and are guaranteed by all of our existing and future domestic subsidiaries. The loans are secured by a second priority lien on substantially all of our tangible and intangible assets, including the equity interests of our
subsidiaries. The liens granted in connection with the Second Lien Credit Agreement are expressly subject and subordinated to the liens securing our obligations under the First Lien Credit Agreement.

We ascribed value to the indebtedness issued in connection with the Second Lien Credit Agreement and the related warrants based on their
relative fair values. As such, approximately $9.6 million of the proceeds was allocated to the indebtedness and the remaining approximately $5.4 million was allocated to the warrants. The resulting discount from the face value of the indebtedness
resulting from the ascribed value to the warrants will be amortized as additional interest expense over the term of the indebtedness using the effective interest rate method. As of September 30, 2010, the fair value of the indebtedness
approximated carrying value.

Senior Unsecured Promissory Note

On December 18, 2009, we issued to Hughes Network Systems, LLC (HNS), a wholly-owned subsidiary of HUGHES Communications, Inc. (HCI), a senior unsecured promissory note with a
principal amount of approximately $8.3 million through the conversion of a trade accounts payable balance of approximately $6.0 million and the approximately $2.3 million outstanding balance on the equipment financing arrangement owed to HNS. The
promissory note accrues interest at a



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rate of 12.00% per annum, compounded annually, and was due and payable on December 31, 2010. Pursuant to the terms of the promissory note, we were required to make scheduled principal
payments of approximately $0.8 million on April 15, 2010 and $1.5 million on each of July 15, 2010 and October 15, 2010. In addition, subject to all restrictions in the First Lien Credit Agreement and Second Lien Credit Agreement and
certain other limitations, to the extent we sell any capital equipment purchased by us (or purchased by HNS on our behalf) for use in connection with the Telematics Agreement between the parties, but no longer needed by us, we are required to make
payments on the promissory note equal to the proceeds from the sale of such capital equipment (net of any selling costs). As of September 30, 2010, we had repaid principal of approximately $1.7 million on the senior unsecured promissory note,
including scheduled payments and proceeds from the sale of the capital equipment.

On November 5, 2010, we and HNS agreed
to amend the promissory note to (i) extend the maturity date to December 31, 2011, (ii) revise the schedule of principal payments and (iii) provide that the approximately $1.0 million of accrued and unpaid interest shall be paid
on December 31, 2010 with all future accrued interest on the promissory note paid quarterly in arrears. Pursuant to the terms of the amended promissory note, we are required to make scheduled principal payments of $0.5 million on each of
October 15, 2010, December 31, 2010 and April 15, 2011, approximately $0.8 million on July 15, 2011 and $1.5 million on October 15, 2011. In connection with the amendment to the promissory note, we agreed to issue
50,000 shares of common stock to HNS as an amendment fee.

Senior Subordinated Unsecured Promissory Notes

On March 31, 2008, we issued to Communications LLC a senior subordinated unsecured promissory note with a principal amount of $12.5
million and a maturity date of October 1, 2013. The note bears interest at a rate of 15.00% per annum which is compounded and added to the principal amount annually and is payable at maturity. In connection with the issuance of the note,
we recorded a deemed capital contribution of approximately $2.4 million related to the difference between (i) the fair value of the note using an estimated interest rate we would have paid an unrelated third party on a similar note and
(ii) the fair value of the note using the 15.00% stated interest rate. The discount from the face value of the note resulting from the deemed capital contribution will be amortized as additional interest expense over the term of the note using
the effective interest rate method.

On December 12, 2008, we issued to Apollo Investment Fund V (PLASE) LP (AIF V
PLASE) an additional senior subordinated unsecured promissory note with a principal amount of $3.5 million and a maturity date of October 1, 2013. The note bears interest at 15.00% per annum which is compounded and added to the
principal amount annually and is payable at maturity. In connection with the issuance of the note, we recorded an additional deemed capital contribution of approximately $2.4 million related to the difference between (i) the fair value of the
note using an estimated interest rate we would have paid an unrelated third party on a similar note and (ii) the fair value of the note using the 15.00% stated interest rate. The discount from the face value of the note resulting from the
deemed capital contribution will be amortized as additional interest expense over the term of the note using the effective interest rate method.

At the time of issuance of each promissory note, we determined the estimated fair value amount by using available market information and commonly accepted valuation methodologies. However, considerable
judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the fair value estimates presented herein is not necessarily indicative of the amount that we or holders of the instruments could realize in a current
market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair value. As of September 30, 2010, the fair value of the senior subordinated unsecured promissory notes
approximated carrying value.



|(7) | Capital Lease Obligations
|--- | -------------------------

We lease certain assets under capital lease arrangements expiring at various times through 2014. The assets and liabilities under capital
leases are recorded at the lower of the present values of the minimum lease payments or the fair values of the assets. The interest rates pertaining to these capital leases range from 8.7% to 15.3% (weighted average is 12.2%).

Minimum future lease payments under the capital leases are:



|                                       |  |                   |        |   |                  |   |        |  
|-------------------------------------- |  | ----------------- | ------ | - | ---------------- | - | ------ | -
|                                       |  | September 30,2010 |        |   | December 31,2009 |  
|                                       |  | (in thousands)    |       
|Total future minimum lease payments    |  | $                 | 2,170  |   |                  | $ | 5,090  |  
|Less: Amounts attributable to interest |  |                   | (179   | ) |                  |   | (366   | )
|                                       |  |                   |        |   |                  |   |        |  
|Net minimum lease payments             |  |                   | 1,991  |   |                  |   | 4,724  |  
|Current portion                        |  |                   | (1,825 | ) |                  |   | (3,125 | )
|                                       |  |                   |        |   |                  |   |        |  
|Long-term portion                      |  | $                 | 166    |   |                  | $ | 1,599  |  
|                                       |  |                   |        |   |                  |   |        |  



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|(8) | Stockholders Equity
|--- | --------------------

On May 13, 2010, we sold 5,130,500 shares of our common stock for gross proceeds of $15.4 million (net proceeds of $14.9 million) in
a private placement to a group of institutional investors. In connection with the private placement, we entered into an amendment to the First Lien Credit Agreement providing for the waiver of the requirement to use 25% of the net cash proceeds from
the private placement for the repayment of senior secured term indebtedness and paid the senior secured lenders an amendment fee of approximately $0.1 million. In addition, as a result of the private placement, the exercise price of the warrant
issued in connection with the second lien term indebtedness was adjusted from $6.00 per share to $5.99 per share.



|(9) | Share-Based Compensation
|--- | ------------------------

In accordance with the applicable accounting guidance governing share-based payments, we record compensation expense for all share-based
awards issued. For the three months ended September 30, 2010 and 2009, we recorded approximately $0.8 million and $0.5 million of compensation expense, respectively, related to share-based grants. For the nine months ended September 30,
2010 and 2009, we recorded approximately $2.1 million and $1.0 million of compensation expense, respectively, related to share-based grants. Such compensation expense is included in research and development, sales and marketing and general and
administrative expense in the accompanying consolidated statements of operations.

Stock Options

The following table reflects stock option activity:



|                                  |  |                 |           |   |                              |   |      |                         |  |   |   | 
|--------------------------------- |  | --------------- | --------- | - | ---------------------------- | - | ---- | ----------------------- |  | - | - | 
|                                  |  | Number ofShares |           |   | WeightedAverageExercisePrice |   |      | AggregateIntrinsicValue | 
|Outstanding at December 31, 2009  |  |                 | 3,520,629 |   |                              | $ | 3.33 |                         |  |   |   | 
|Granted                           |  |                 | 462,000   |   |                              | $ | 2.81 |                         |  |   |   | 
|Forfeited                         |  |                 | (177,672  | ) |                              | $ | 2.13 |                         |  |   |   | 
|                                  |  |                 |           |   |                              |   |      |                         |  |   |   | 
|Outstanding at September 30, 2010 |  |                 | 3,804,957 |   |                              | $ | 3.33 |                         |  | $ |  | 
|                                  |  |                 |           |   |                              |   |      |                         |  |   |   | 
|Exercisable at September 30, 2010 |  |                 | 319,130   |   |                              |   |      |                         |  | $ |  | 
|                                  |  |                 |           |   |                              |   |      |                         |  |   |   | 

The following table provides information about stock options that are outstanding and exercisable
as of September 30, 2010:



|              |  |                           |           |  |                              |   |      |                                    |  |  |                 |  |  |                              |         |  |                                    |   |      |  |  |  |     | 
|------------- |  | ------------------------- | --------- |  | ---------------------------- | - | ---- | ---------------------------------- |  |  | --------------- |  |  | ---------------------------- | ------- |  | ---------------------------------- | - | ---- |  |  |  | --- | 
|              |  | Stock Options Outstanding |           |  | Stock Options Exercisable    |  
|ExercisePrice |  | Number ofShares           |           |  | WeightedAverageExercisePrice |   |      | WeightedAverageRemainingLife (Yrs) |  |  | Numberof Shares |  |  | WeightedAverageExercisePrice |         |  | WeightedAverageRemainingLife (Yrs) |  
|$1.65         |  |                           | 524,241   |  |                              | $ | 1.65 |                                    |  |  | 6.6             |  |  |                              | 85,212  |  |                                    | $ | 1.65 |  |  |  | 6.6 | 
|$2.05         |  |                           | 195,000   |  |                              | $ | 2.05 |                                    |  |  | 9.9             |  |  |                              |        |  |                                    |   |     |  |  |  |    | 
|$2.47         |  |                           | 1,453,230 |  |                              | $ | 2.47 |                                    |  |  | 7.2             |  |  |                              | 168,504 |  |                                    | $ | 2.47 |  |  |  | 7.2 | 
|$3.15         |  |                           | 100,000   |  |                              | $ | 3.15 |                                    |  |  | 9.0             |  |  |                              | 20,000  |  |                                    | $ | 3.15 |  |  |  | 9.0 | 
|$3.40         |  |                           | 260,000   |  |                              | $ | 3.40 |                                    |  |  | 9.6             |  |  |                              |        |  |                                    |   |     |  |  |  |    | 
|$5.19         |  |                           | 1,272,486 |  |                              | $ | 5.19 |                                    |  |  | 8.7             |  |  |                              | 45,414  |  |                                    | $ | 5.19 |  |  |  | 8.7 | 

For stock option
awards outstanding as of September 30, 2010, we expect to recognize approximately $4.3 million of additional compensation expense over the remaining average service period of approximately 1.7 years.

Restricted Stock

The
following table reflects restricted stock activity:



|                                  |  |                 |         |   |                                     |   |      | 
|--------------------------------- |  | --------------- | ------- | - | ----------------------------------- | - | ---- | 
|                                  |  | Number ofShares |         |   | WeightedAverageGrant DateFair Value |  
|Outstanding at December 31, 2009  |  |                 | 528,000 |   |                                     | $ | 4.55 | 
|Granted                           |  |                 | 413,063 |   |                                     | $ | 3.40 | 
|Vested                            |  |                 | (96,000 | ) |                                     | $ | 4.01 | 
|Forfeited                         |  |                 | (3,950  | ) |                                     | $ | 3.40 | 
|                                  |  |                 |         |   |                                     |   |      | 
|Outstanding at September 30, 2010 |  |                 | 841,113 |   |                                     | $ | 4.05 | 
|                                  |  |                 |         |   |                                     |   |      | 



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For restricted stock
awards outstanding as of September 30, 2010, we expect to record approximately $2.6 million of additional compensation expense over the remaining average service period of approximately 1.2 years.



|(10) | Loss Per Common Share
|---- | ---------------------

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common
shares outstanding for the period. Diluted loss per common share reflects the potential dilution from the exercise or conversion of securities into common stock. During all periods presented, we had potential common shares, including shares issuable
upon the exercise of outstanding stock options and warrants and shares held in escrow pending satisfaction of a contingency, which could potentially dilute basic loss per common share in the future but have been excluded from the computation of
diluted loss per common share as the effect would have been anti-dilutive. For the three and nine months ended September 30, 2010 and 2009, there were 82,887,381 and 82,537,985 potential common shares, respectively, excluded from the
computation of diluted loss per share, consisting of shares of common stock (i) issuable upon the exercise of outstanding stock options and warrants, (ii) held in escrow to be released to the Old HTI stockholders upon achievement of the
specified price targets and (iii) for the three and nine months ended September 30, 2009, held in escrow until June 30, 2010 to indemnify us for the payment of indemnification claims that may be made as a result of breaches of Old
HTIs covenants, representations and warranties in the Merger Agreement. In addition, for the nine months ended September 30, 2009, we excluded the 7,439,978 shares of common stock, which we repurchased following consummation of the Merger
from the calculation of the weighted average number of common shares outstanding during such period.



|(11) | Comprehensive Loss
|---- | ------------------

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from nonowner
sources. Our comprehensive loss for each of the three and nine month periods ended September 30, 2010 and 2009 equaled our net loss.



|(12) | Related Party Transactions
|---- | --------------------------

Apollo
Global Management, LLC

Communications LLC, AIF V PLASE and PLASE HT are each affiliated with Apollo. As of
September 30, 2010, Apollo, through these entities, owned approximately 62% of our outstanding common stock. HCI, also an affiliate of Apollo, owned an additional approximately 4% of our outstanding common stock. In December 2009, AIF V PLASE
transferred its ownership in all of its equity and debt interests of us, including its holding of senior secured term indebtedness, the senior subordinated unsecured promissory note and common stock, to PLASE HT.

As of September 30, 2010, the affiliates of Apollo, not including HNS which is discussed below, collectively held an aggregate face
value and accrued interest of $6.3 million of senior secured term indebtedness, $16.1 million of second lien secured term indebtedness and $22.3 million of senior subordinated unsecured promissory notes.

Hughes Network Systems, LLC

For the three months ended September 30, 2010 and 2009, HNS, a wholly-owned subsidiary of HCI and an affiliate of Apollo, provided approximately $0.0 million and $4.0 million of services,
respectively, to us. For the nine months ended September 30, 2010 and 2009, HNS provided approximately $0.5 million and $20.3 million of services, respectively, to us. As of September 30, 2010 and December 31, 2009, we had an
outstanding balance, not including the promissory note discussed below, of $0 and approximately $0.2 million, respectively, payable to HNS.

In December 2009, we issued to HNS a senior unsecured promissory note with a principal amount of approximately $8.3 million through the conversion of a trade accounts payable balance of approximately $6.0
million and the approximately $2.3 million outstanding balance on an equipment financing arrangement owed to HNS. The promissory note accrues interest at a rate of 12.00% per annum, compounded annually, and was due and payable on
December 31, 2010. Pursuant to the terms of the promissory note, we were required to make scheduled principal payments of approximately $0.8 million on April 15, 2010 and $1.5 million on each of July 15, 2010 and October 15,
2010. In addition, subject to all restrictions in the First Lien Credit Agreement and Second Lien Credit Agreement and certain other limitations, to the extent we sell any capital equipment purchased by us (or purchased by HNS on our behalf) for use
in connection with the Telematics Agreement between the parties, but no longer needed by us, we are required to make payments on the promissory note equal to the proceeds from the sale of such capital equipment (net of any selling costs). As of
September 30, 2010, we had repaid principal of approximately $1.7 million on the senior unsecured promissory note, including scheduled payments and proceeds from the sale of the capital equipment.



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On November 5,
2010, we and HNS agreed to amend the promissory note to (i) extend the maturity date to December 31, 2011, (ii) revise the schedule of principal payments and (iii) provide that the approximately $1.0 million of accrued and unpaid
interest shall be paid on December 31, 2010 with all future accrued interest on the promissory note paid quarterly in arrears. Pursuant to the terms of the amended promissory note, we are required to make scheduled principal payments of $0.5
million on each of October 15, 2010, December 31, 2010 and April 15, 2011, approximately $0.8 million on July 15, 2011 and $1.5 million on October 15, 2011. In connection with the amendment to the promissory note, we
agreed to issue 50,000 shares of common stock to HNS as an amendment fee.

Trivergance Business Resources, LLC

For each of the three months ended September 30, 2010 and 2009, Trivergance Business Resources, LLC (TBR), an affiliate
of a member of our board of directors, provided approximately $0.4 million and $0.3 million of services to us, respectively. For each of the nine months ended September 30, 2010 and 2009, TBR provided approximately $1.1 million and $1.2
million, respectively, of services to us.



|(13) | Commitments and Contingencies
|---- | -----------------------------

Contractual Payment Obligations

We have a long-term contract with an automaker pursuant to which the automaker agreed to install telematics devices in its vehicles and permit us to exclusively provide telematics services to its new
customers. This contract also required us to pay the automaker for certain non-recurring costs associated with the initiation of telematics services. Pursuant to the contract, we are currently committed to pay $4.0 million to the automaker in 2010.

Litigation and Claims

From time to time, we are subject to litigation in the normal course of business. We are of the opinion that, based on information presently available, the resolution of any such legal matters will not
have a material adverse effect on our financial position, results of operations or its cash flows.



|(14) | Segment Information
|---- | -------------------

We
present our segment information along the same lines that our chief executive officer reviews our operating results in assessing performance and allocating resources. Accordingly, our operations have been classified into three business segments:
(i) the HUGHES Telematics segment, which provides and is further developing the telematics solution which is being marketed to automakers and other parties and includes the operations relating to the contract with Mercedes-Benz and our
in-Drive product offering; (ii) the Networkfleet segment, which provides an aftermarket wireless fleet management solution targeted to the local fleet market, and (iii) the Lifecomm segment, which is developing and will operate a
mobile personal emergency response service which will permit subscribers to initiate requests for emergency assistance services through a wearable device.

The following table presents certain financial information on our reportable segments:



|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|------------------------------ |  | -------------------------------- | ------- | - | ------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                               |  | Three Months Ended September 30, |         |   | Nine Months Ended September 30, |  
|                               |  | 2010                             |         |   | 2009                            |   |         | 2010 |  |   | 2009    |  
|                               |  | (in thousands)                   |        
|Revenues:                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|HUGHES Telematics              |  | $                                | 1,616   |   |                                 | $ |        |      |  | $ | 1,847   |   |  | $ |        |  
|Networkfleet                   |  |                                  | 9,158   |   |                                 |   | 8,713   |      |  |   | 26,521  |   |  |   | 24,568  |  
|Lifecomm                       |  |                                  |        |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Total                          |  | $                                | 10,774  |   |                                 | $ | 8,713   |      |  | $ | 28,368  |   |  | $ | 24,568  |  
|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|(Loss) Income from operations: |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|HUGHES Telematics              |  | $                                | (16,600 | ) |                                 | $ | (38,687 | )    |  | $ | (51,771 | ) |  | $ | (71,309 | )
|Networkfleet                   |  |                                  | 900     |   |                                 |   | 733     |      |  |   | 2,130   |   |  |   | 1,491   |  
|Lifecomm                       |  |                                  | (1,091  | ) |                                 |   |        |      |  |   | (1,388  | ) |  |   |        |  
|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Total                          |  | $                                | (16,791 | ) |                                 | $ | (37,954 | )    |  | $ | (51,029 | ) |  | $ | (69,818 | )
|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  



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|                  |  |                   |         |  |                  |   |         | 
|----------------- |  | ----------------- | ------- |  | ---------------- | - | ------- | 
|                  |  | September 30,2010 |         |  | December 31,2009 |  
|                  |  | (in thousands)    |        
|Total assets:     |  |                   |         |  |                  |   |         | 
|HUGHES Telematics |  | $                 | 79,330  |  |                  | $ | 98,627  | 
|Networkfleet      |  |                   | 19,228  |  |                  |   | 19,454  | 
|Lifecomm          |  |                   | 12,887  |  |                  |   |        | 
|                  |  |                   |         |  |                  |   |         | 
|Total             |  | $                 | 111,445 |  |                  | $ | 118,081 | 
|                  |  |                   |         |  |                  |   |         | 

Substantially all of our assets are located within the United States. As of September 30, 2010 and
December 31, 2009, we included the approximately $5.2 million of goodwill in the total assets of the Networkfleet segment.



|(15) | Subsequent Events
|---- | -----------------

On
November 5, 2010, we and HNS agreed to amend the promissory note to (i) extend the maturity date to December 31, 2011, (ii) revise the schedule of principal payments and (iii) provide that the approximately $1.0 million of
accrued and unpaid interest shall be paid on December 31, 2010 with all future accrued interest on the promissory note paid quarterly in arrears. Pursuant to the terms of the amended promissory note, we are required to make scheduled principal
payments of $0.5 million on each of October 15, 2010, December 31, 2010 and April 15, 2011, approximately $0.8 million on July 15, 2011 and $1.5 million on October 15, 2011. In connection with the amendment to the
promissory note, we agreed to issue 50,000 shares of common stock to HNS as an amendment fee.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis of our financial condition and results of operations are based upon financial statements which
have been prepared in accordance with GAAP and should each be read together with our consolidated financial statements and the notes to those consolidated financial statements included elsewhere in this report. This report contains forward-looking
statements that involve risks and uncertainties, including statements regarding our capital needs, business strategy, expectations and intentions within the meaning of Private Securities Litigation Reform Act of 1995 which represent our expectations
or beliefs concerning future events. We urge you to consider statements that use the terms believe, do not believe, anticipate, expect, plan, may, estimate,
strive, intend, will, should, and variations of these words or 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, and uncertainties, 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. All forward-looking statements speak only as of the date of this report. Actual results will most likely differ from those
reflected in these forward-looking statements and the differences could be substantial. We disclaim any obligation to update these forward-looking statements or disclose any difference, except as may be required by securities laws, between our
actual results and those reflected in these statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this report are reasonable, we can give no assurance that such
plans, intentions or expectations will be achieved. The terms HUGHES Telematics, we, us and our refer to the business, operations and financial results of (i) Old HTI prior to the closing of the
Merger and (ii) HUGHES Telematics, Inc. subsequent to the closing of the Merger, as the context requires.

Overview

We are a telematics services company that provides a suite of real-time voice and data communications services and
applications for use in vehicles and are developing additional applications for use within and outside of the automotive industry. These services are enabled through a state-of-the-art communications center designed and built to connect various
mobile devices with content, services and call centers. Our system architecture enables us to manage the integration of these components and the associated service delivery in an efficient manner, allowing us to quickly adopt and implement new
technologies and services.

Within the automotive industry, our communications center allows for two way voice and data
communications to the vehicle and supports, among other things, critical safety and security services as well as location-based services and remote diagnostics. Since November 16, 2009, we have been the exclusive telematics services provider in
the United States for all new vehicles sold by Mercedes-Benz, as well as the preferred provider of telematics services for all Mercedes-Benz vehicles purchased prior to November 16, 2008. These services are marketed under the mbrace
brand and are enabled through a factory-installed hardware device installed on Mercedes-Benz vehicles. In addition, our in-Drive product offers services to consumers and other third parties through an aftermarket hardware device that we have
developed and which we intend to distribute through relationships with companies and organizations with large customer bases for installation in existing vehicles. Through Networkfleet, Inc., our wholly-owned subsidiary, we currently offer remote
vehicle monitoring and other data services to support owners and operators of fleets of vehicles.



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Although Networkfleet
has been our primary source of revenue to date, we expect to derive our revenue increasingly from the telematics services provided to Mercedes-Benz vehicles, vehicles manufactured by automakers to whom we are currently marketing our services and
vehicles which will have our in-Drive aftermarket hardware device installed. We expect a significant portion of our future revenues to be generated from subscriptions for consumer service offerings, as well as from transaction or pre-paid
package fees, automaker and dealer service offerings and from strategic relationships with third parties who are expected to develop applications for our services and product offerings.

On May 12, 2010, we entered into the LLC Agreement with Qualcomm, a leader in developing and delivering innovative digital wireless
communications products and services, and AMAC, a healthcare communications company dedicated to the provision of support services to the healthcare community, forming Lifecomm. Lifecomm intends to design, develop, finance and operate a mobile
personal emergency response service which will permit subscribers to initiate requests for emergency assistance services through a wearable device that is able to communicate information to and support voice interactions between the subscriber and
an emergency assistance call center for purposes of dispatching first responders to the subscribers location. Lifecomm expects to launch its service offerings in the fourth quarter of 2011.

On August 30, 2010, we executed an agreement with an unaffiliated distribution partner to provide our in-Drive telematics
services to certain customers of the partner. Pursuant to the agreement, we will configure our telematics platform to support the program and provide our aftermarket hardware device to the partners customers to enable the delivery of
telematics services to the partner and the partners customers. In addition, we will be responsible for, among other things, certain website development to allow the partners customers to access program information and maintenance
and support of the hardware devices, including warranty.

Pursuant to the agreement and subject to fulfillment of our
obligations thereunder, we will receive minimum aggregate payments from the partner of approximately $24.1 million over the next two years for, among other things, the configuration of our telematics platform to support the program, development of
the program website, the final testing and deployment of the hardware device, other program launch activities and the procurement by us of an agreed upon minimum number of hardware devices which we will provide to the partners
customers. We received approximately $5.2 million of such amounts in October 2010 and expect to receive an additional $15.0 million in 2011 and the remaining balance in 2012. In addition, we expect to receive recurring payments from the
partners customers subject to and in connection with their subscription to the offered telematics services.

Merger with Polaris
Acquisition Corp.

On March 31, 2009, pursuant to the terms of the Merger Agreement, Old HTI, a privately held
company, and Polaris, a publicly held blank check company, consummated the Merger. In connection with the Merger, Polaris changed its name from Polaris Acquisition Corp. to HUGHES Telematics, Inc. Upon closing of the Merger,
the outstanding equity securities of Old HTI were exchanged for an aggregate of 77,102,149 shares of our common stock, comprised of 19,854,018 initial shares and 57,248,131 earn-out shares. In addition, all options exercisable for Old HTI common
stock issued and outstanding immediately prior to the Merger were exchanged for options exercisable for an aggregate of 2,274,935 shares of our common stock, which includes 1,751,859 earn-out options. The earn-out shares, which were issued into
escrow, will be released to the Old HTI stockholders and the earn-out options will be eligible to be exercised, according to their terms, by the optionholders, each in three tranches, upon the trading share price of our common stock reaching at
least $20.00, $24.50 and $30.50 (as may be adjusted or amended in accordance with the escrow agreement) within certain measurement periods over the five-year period following the closing of the Merger. Pursuant to the Merger Agreement, the Polaris
founders agreed to deposit an aggregate of 1,250,000 shares of their common stock into escrow at closing with such shares being released upon the achievement of the first share price target between the first and fifth anniversary of closing. Upon
consummation of the Merger, the Polaris founders also transferred an aggregate of 168,000 shares of common stock to us with such shares cancelled upon receipt.

In order to consummate the Merger, we agreed to purchase an aggregate of 7,439,978 shares of our common stock from a limited number of institutional shareholders in separate and privately negotiated
transactions which were executed prior to the conclusion of the special meeting in which our shareholders voted on the Merger. In order to consummate these private purchases following the Merger, we used funds released from the trust account and
funds received from the sale of Series B Preferred Stock. In addition, stockholders holding an aggregate of 4,499,337 shares of common stock exercised their right to convert their stock into a pro rata share of the funds held in the Polaris trust
account.

Immediately prior to the consummation of the Merger, Old HTI extinguished its outstanding shares of Series A
Preferred Stock through (i) the exercise by Communications LLC of outstanding warrants to purchase Old HTI common stock using shares of Series A Preferred Stock with an aggregate face value of $55.0 million and (ii) the exchange of shares
of Series A Preferred Stock with an aggregate face value of $20.0 million for shares of Old HTI common stock. In connection with the Merger, all outstanding shares of Series B Preferred Stock were exchanged for an aggregate of 12,500,000 shares of
our common stock, comprised of 5,000,000 initial shares and 7,500,000 earn-out shares.



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Notwithstanding the
legal form of the transaction, the Merger has been accounted for under the purchase method of accounting as a reverse acquisition, equivalent to a recapitalization, through the issuance of stock by Old HTI for the net monetary assets of Polaris. The
determination of Old HTI as the accounting acquirer was made based on consideration of all quantitative and qualitative factors of the Merger, including significant consideration given to the fact that following consummation of the Merger
(i) the stockholders of Old HTI controlled a majority of our voting power, (ii) the controlling stockholder of Old HTI prior to the Merger, together with its affiliates, controlled approximately 72% of our voting power and had the right to
select a majority of the members of our board of directors and (iii) the management of Old HTI continued in all executive officer and other senior management positions and, accordingly, had day-to-day authority to carry out the business plan
after the Merger. Accordingly, our historical financial statements prior to March 31, 2009 are the historical financial statements of Old HTI. The consolidated financial statements of Old HTI have been retroactively restated to reflect the
recapitalization of Old HTI with the 77,102,149 shares of common stock issued to Old HTI equity holders in connection with the Merger.

Selected Segment Data

We classify our operations into three principal business segments: (i) the HUGHES Telematics segment, which provides and is further
developing the telematics solution which is being marketed to automakers and other parties and includes the operations relating to the contract with Mercedes-Benz and our in-Drive product offering; (ii) the Networkfleet segment, which
provides a wireless aftermarket fleet management solution targeted to the local fleet market; and (iii) the Lifecomm segment, which is developing and will operate a mobile personal emergency response service which will permit subscribers to
initiate requests for emergency assistance services through a wearable device. The following tables set forth revenues and operating (loss) income by operating segments:



|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|------------------------------ |  | -------------------------------- | ------- | - | ------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                               |  | Three Months Ended September 30, |         |   | Nine Months Ended September 30, |  
|                               |  | 2010                             |         |   | 2009                            |   |         | 2010 |  |   | 2009    |  
|                               |  | (in thousands)                   |        
|Revenues:                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|HUGHES Telematics              |  | $                                | 1,616   |   |                                 | $ |        |      |  | $ | 1,847   |   |  | $ |        |  
|Networkfleet                   |  |                                  | 9,158   |   |                                 |   | 8,713   |      |  |   | 26,521  |   |  |   | 24,568  |  
|Lifecomm                       |  |                                  |        |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Total                          |  | $                                | 10,774  |   |                                 | $ | 8,713   |      |  | $ | 28,368  |   |  | $ | 24,568  |  
|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|(Loss) Income from operations: |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|HUGHES Telematics              |  | $                                | (16,600 | ) |                                 | $ | (38,687 | )    |  | $ | (51,771 | ) |  | $ | (71,309 | )
|Networkfleet                   |  |                                  | 900     |   |                                 |   | 733     |      |  |   | 2,130   |   |  |   | 1,491   |  
|Lifecomm                       |  |                                  | (1,091  | ) |                                 |   |        |      |  |   | (1,388  | ) |  |   |        |  
|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Total                          |  | $                                | (16,791 | ) |                                 | $ | (37,954 | )    |  | $ | (51,029 | ) |  | $ | (69,818 | )
|                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  

Results of Operations for the Three Months Ended September 30, 2010 Compared to the Three Months Ended
September 30, 2009

Revenues

Hardware revenues consist principally of the sale of Networkfleets telematics device. Service revenues reflect the consideration received for monitoring and tracking services, which are recognized
as revenue when earned. The following table sets forth information related to revenue for the three months ended September 30, 2010 and 2009:



|               |  |                                  |        |  |      |   |       | 
|-------------- |  | -------------------------------- | ------ |  | ---- | - | ----- | 
|               |  | Three Months Ended September 30, |       
|               |  | 2010                             |        |  | 2009 |  
|               |  | (in thousands)                   |       
|Services       |  | $                                | 8,215  |  |      | $ | 5,845 | 
|Hardware       |  |                                  | 2,559  |  |      |   | 2,868 | 
|               |  |                                  |        |  |      |   |       | 
|Total revenues |  | $                                | 10,774 |  |      | $ | 8,713 | 
|               |  |                                  |        |  |      |   |       | 

Total revenues for the three months ended September 30, 2010 increased to approximately $10.8 million,
a 23.7% increase from the approximately $8.7 million for the three months ended September 30, 2009. This increase was primarily due to the approximately $1.6 million of service revenues recognized by the HUGHES Telematics segment in the three



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months ended September 30 2010 compared to no revenues recognized in the three months ended September 30, 2009, and to the increase in Networkfleets service revenues, which
increased by approximately $0.8 million or 13% in the three months ended September 30 2010 compared to the three months ended September 30, 2009. Units active on Networkfleets network increased to approximately 112,000 as of
September 30, 2010, a 15% increase from the approximately 97,000 units active as of September 30, 2009. As Networkfleet continues to sell additional hardware devices, service revenues are expected to continue to increase in future periods.
In addition, service revenues generated by the HUGHES Telematics segment are expected to significantly increase in future periods as (i) we continue to transition paying subscribers to the Mercedes-Benz service formerly marketed under the Tele
Aid brand to the mbrace service offering and (ii) we convert subscribers to the mbrace service from a trial to a paid subscription.

Networkfleets hardware unit sales decreased to approximately 7,500 units in the three months ended September 30, 2010, an 11% decrease from the approximately 8,400 units sold in the three
months ended September 30, 2009, but was relatively flat at 23,000 units in each of the nine months ended September 30, 2010 and 2009. The decrease in units sold in the three months ended September 30, 2010 compared to the three
months ended September 30, 2009 was due primarily to the timing of hardware sales to several large customers occurring earlier in 2010 than in 2009.

Cost of Revenues

Cost of services includes per-unit monthly charges from
various wireless, mapping, and roadside assistance providers, the salaries and related benefits for employees who support the call centers and manage the data centers and depreciation of the software and equipment which support the provision of
services. Cost of hardware sold consists primarily of the cost of direct materials required to produce Networkfleets telematics device, the cost of shipping and installing devices, the amortization of certain software development costs and the
amortization of certain intangibles acquired in connection with the acquisition of Networkfleet. The following table sets forth information related to cost of revenues for the three months ended September 30, 2010 and 2009:



|                       |  |                                  |       |  |      |   |       | 
|---------------------- |  | -------------------------------- | ----- |  | ---- | - | ----- | 
|                       |  | Three Months Ended September 30, |      
|                       |  | 2010                             |       |  | 2009 |  
|                       |  | (in thousands)                   |      
|Cost of services       |  | $                                | 6,427 |  |      | $ | 1,755 | 
|Cost of hardware sold  |  |                                  | 2,210 |  |      |   | 2,136 | 
|                       |  |                                  |       |  |      |   |       | 
|Total cost of revenues |  | $                                | 8,637 |  |      | $ | 3,891 | 
|                       |  |                                  |       |  |      |   |       | 

Total cost of revenues increased to approximately $8.6 million for the three months ended September 30,
2010 from $3.9 million for the three months ended September 30, 2009, an increase of $4.7 million or 121.9%. Cost of services for the three months ended September 30, 2010 consisted of approximately $3.7 million of costs related to the
provision of the mbrace service to owners and lessees of Mercedes-Benz vehicles, approximately $1.9 million of costs related to the provision of Networkfleets service offerings and approximately $0.8 million related to the anticipated
shortfall below a contractual minimum payment. Cost of services related to the provision of Networkfleets service offerings increased approximately $0.2 million in the three months ended September 30, 2010 compared to the three months
ended September 30, 2009 due to the increased number of active units on the network. Networkfleets cost of hardware increased in the three months ended September 30, 2010 compared to the three months ended September 30, 2009 due
to a higher per-unit cost of manufacturing and additional amortization of software costs partially offset by lower unit sales volume. Networkfleets cost of revenues as a percentage of total revenues was approximately 45% in each of the three
months ended September 30, 2010 and September 30, 2009.

Research and Development Expense

Research and development expense consists primarily of salaries and related benefits for employees and fees paid to third parties
associated with engineering and product development activities, depreciation of property and equipment used in engineering and product development efforts and amortization of certain intangible assets acquired in connection with the acquisition of
Networkfleet. Research and development expense for the three months ended September 30, 2010 decreased to $3.4 million from $8.1 million for the three months ended September 30, 2009, a decrease of $4.7 million or 58%. This decrease was
due to an approximately $4.2 million decrease in amounts paid to third parties related to development activities that were completed in the second half of 2009 and an approximately $0.6 million decrease in depreciation expense due to the impairment
or disposal of certain assets used in development efforts that occurred in the three months ended September 30, 2009, partially offset by a $0.1 million increase in labor costs as we dedicated additional internal resources to the further
development and testing of our telematics system, including the development of our in-Driveand Lifecomm products and services.



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Sales and Marketing Expense

Sales and marketing expense consists primarily of (i) salaries, commissions and related benefits for employees
engaged in sales initiatives and other marketing activities, (ii) certain amounts paid to Mercedes-Benz and its dealers, (iii) the costs associated with direct marketing campaigns, (iv) trade shows and other forms of advertising,
(v) depreciation of software applications used in marketing activities and (vi) the amortization of certain intangible assets acquired in connection with the acquisition of Networkfleet. Sales and marketing expense for the three months
ended September 30, 2010 increased to $6.0 million from $2.8 million for the three months ended September 30, 2009, an increase of $3.2 million or 116%. This increase related primarily to a $2.6 million increase in marketing costs incurred
relating to the mbrace service offering, which was launched in November 2009, including certain amounts paid to Mercedes-Benz and its dealers, and an increase of $0.4 million in depreciation expense.

General and Administrative Expense

General and administrative expense consists primarily of facilities costs, accounting, legal, information technology, human resources and other corporate costs, as well as the salaries and related
employee benefits for those employees that support such functions. General and administrative expenses for the three months ended September 30, 2010 decreased to $9.6 million from $11.2 million for the three months ended September 30,
2009, a decrease of $1.6 million or 14%. This decrease was due primarily to $2.3 million of expenses incurred during the three months ended September 30, 2009 related to the implementation of systems and software which support our billing and
other administrative functions and a $0.1 million decrease in depreciation and amortization expenses, partially offset by a $0.8 million increase in employee compensation and benefits as we increased our operational support staff following the
launch of the mbraceservice offering in November 2009.

Interest Expense, Net

Interest expense, net for the three months ended September 30, 2010 increased to $5.5 million from $3.1 million for the three months
ended September 30, 2009, an increase of $2.4 million. Interest expense, net for the three months ended September 30, 2010 consisted of $3.6 million of accrued interest, discount amortization and debt issuance cost amortization related to
senior secured term indebtedness, $0.7 million of accrued interest, discount amortization and debt issuance cost amortization related to our second lien term indebtedness, $1.0 million of accrued interest and discount amortization related to the
senior subordinated unsecured term promissory notes, $0.2 million of accrued interest related to our senior unsecured promissory note and $0.1 million of accrued interest related to capital leases and vendor financing, partially offset by $0.1
million of interest income. Interest expense, net for the three months ended September 30, 2009 consisted of $3.3 million of accrued interest, discount amortization and debt issuance cost amortization related to senior secured term
indebtedness, $0.8 million of interest and discount amortization related to the senior subordinated unsecured term promissory notes and $0.3 million of interest on capital lease obligations and vendor financing, partially offset by approximately
$1.3 million of interest that was capitalized.

Results of Operations for the Nine Months Ended September 30, 2010 Compared to the
Nine Months Ended September 30, 2009

Revenues

The following table sets forth information related to revenue for the nine months ended September 30, 2010 and 2009:



|               |  |                                 |        |  |      |   |        | 
|-------------- |  | ------------------------------- | ------ |  | ---- | - | ------ | 
|               |  | Nine Months Ended September 30, |       
|               |  | 2010                            |        |  | 2009 |  
|               |  | (in thousands)                  |       
|Services       |  | $                               | 20,739 |  |      | $ | 16,750 | 
|Hardware       |  |                                 | 7,629  |  |      |   | 7,818  | 
|               |  |                                 |        |  |      |   |        | 
|Total revenues |  | $                               | 28,368 |  |      | $ | 24,568 | 
|               |  |                                 |        |  |      |   |        | 

Total revenues for the nine months ended September 30, 2010 increased to approximately $28.4 million, a
15% increase from the approximately $24.6 million of revenues in the nine months ended September 30, 2009. This increase was primarily due to the increase in Networkfleets service revenues, which increased by approximately $2.1 million or
13% in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009, and to the approximately $1.8 million of service revenues recognized by the HUGHES Telematics segment in the nine months ended
September 30, 2010 compared to no revenues recognized in the nine months ended September 30, 2009. Units active on Networkfleets network increased to approximately 112,000 as of September 30, 2010, a 15% increase from the
approximately 97,000 units active as of September 30, 2009.

Hardware revenues decreased by approximately $0.2 million
due to a nominal decrease in the number of units sold and a nominal decrease in the average revenue per unit sold in the nine months ended September 30, 2010 compared the nine months ended September 30, 2009. There were approximately
23,000 units sold in each of the nine month periods ended September 30, 2010 and 2009.



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Cost of Revenues

The following table sets forth information related to costs of revenue for the nine months ended September 30, 2010 and 2009:



|                       |  |                                 |        |  |      |   |        | 
|---------------------- |  | ------------------------------- | ------ |  | ---- | - | ------ | 
|                       |  | Nine Months Ended September 30, |       
|                       |  | 2010                            |        |  | 2009 |  
|                       |  | (in thousands)                  |       
|Cost of services       |  | $                               | 18,075 |  |      | $ | 5,023  | 
|Cost of hardware       |  |                                 | 6,623  |  |      |   | 6,104  | 
|                       |  |                                 |        |  |      |   |        | 
|Total cost of revenues |  | $                               | 24,698 |  |      | $ | 11,127 | 
|                       |  |                                 |        |  |      |   |        | 

Total cost of revenues increased to approximately $24.7 million for the nine months ended September 30,
2010 from $11.1 million for the nine months ended September 30, 2009. Cost of services for the nine months ended September 30, 2010 consisted of approximately $10.5 million of costs related to the provision of the mbrace service to
owners and lessees of Mercedes-Benz vehicles, approximately $5.5 million of costs related to the provision of Networkfleets service offerings and approximately $2.1 million related to the anticipated shortfall below a contractual minimum
payment. Cost of services related to the provision of Networkfleets service offerings increased approximately $0.5 million in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 due to the
increased number of active units on the network. Networkfleets cost of revenues as a percentage of total revenues was approximately 46% in the nine months ended September 30, 2010 and 45% in the nine months ended September 30, 2009.

Research and Development Expense

Research and development expense for the nine months ended September 30, 2010 decreased to $8.8 million from $26.6 million for the nine months ended September 30, 2009, a decrease of $17.8
million or 67%. This decrease was due to an approximately $17.4 million decrease in amounts paid to third parties related to development activities that were completed in the second half of 2009 and an approximately $1.2 million decrease in
depreciation expense due to the impairment or disposal of certain assets used in the development effort that in the nine months ended September 30, 2009, partially offset by a $0.9 million increase in labor costs as we dedicated additional
internal resources to the further development and testing of our telematics system, including the development of our in-Drive and Lifecomm products and services.

Sales and Marketing Expense

Sales and marketing expense for the
nine months ended September 30, 2010 increased to $17.2 million from $7.8 million for the nine months ended September 30, 2009, an increase of $9.4 million or 120%. This increase related primarily to a $7.5 million increase in marketing
costs incurred relating to our mbrace service offering, which was launched in November 2009, including certain amounts paid to Mercedes-Benz and its dealers; an increase of $1.3 million in depreciation expense; and an increase of
approximately $0.5 million in salaries and related benefits as the number of employees dedicated to sales and marketing activities grew in the nine months ended September 30, 2010 as we continued to develop our relationship with Mercedes-Benz
and its dealers and pursued relationships with other customers.

General and Administrative Expense

General and administrative expenses for the nine months ended September 30, 2010 increased to $28.7 million from $28.1 million for
the nine months ended September 30, 2009, an increase of $0.6 million or 2%. This increase was due primarily to a $3.3 million increase in salaries and related benefits as we increased our operational support staff following the launch of the
mbrace service offering in November 2009, a $1.0 million increase in depreciation and amortization expense related to the systems and software which were deployed during the second half of 2009 to support our billing and other administrative
functions, partially offset by $1.9 million in consulting costs related to the implementation and setup of our customer call centers prior to operations and the implementation of systems and software which support our billing and other
administrative functions which were incurred in the nine months ended September 30, 2009 and a $1.8 million decrease in professional fees due to Merger-related costs which were incurred in the nine months ended September 30, 2009.



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Interest Expense, Net

Interest expense, net for the nine months ended September 30, 2010 increased to $16.3 million from $9.3 million for
the nine months ended September 30, 2009, an increase of $7.0 million. Interest expense, net for the nine months ended September 30, 2010 consisted of $10.6 million of accrued interest, discount amortization and debt issuance cost
amortization related to the senior secured term indebtedness, $2.0 million of accrued interest, discount amortization and debt issuance cost amortization related to the second lien indebtedness, $2.8 million of accrued interest and discount
amortization related to the senior subordinated unsecured term promissory notes, $0.7 million of accrued interest related to the senior unsecured promissory note and $0.4 million of accrued interest related to capital leases and vendor financing,
partially offset by $0.1 million of interest income and $0.1 million of interest that was capitalized. Interest expense, net for the nine months ended September 30, 2009 consisted of $9.5 million of accrued interest, discount amortization and
debt issuance cost amortization related to the senior secured term indebtedness, $2.5 million of interest and discount amortization related to the senior subordinated unsecured term promissory notes, $0.6 million of accretion related to the Series A
Preferred Stock and $0.7 million of interest on capital lease obligations and vendor financing, partially offset by approximately $3.9 million of interest that was capitalized and $0.1 million of interest income.

Liquidity and Capital Resources

As of September 30, 2010, we had cash, cash equivalents and short-term investments of approximately $22.8 million. In addition, we received approximately $5.2 million of cash in October 2010 in
connection with the agreement with the distribution partner to provide in-Drivetelematics services. Of our consolidated cash, cash equivalents and short-term investments, approximately $9.9 million is held by our Lifecomm subsidiary for use
in that business. As a result of our historical net losses and our limited capital resources, our independent registered public accounting firms report on our financial statements as of and for the year ended December 31, 2009 includes an
explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. We cannot provide assurance that our net losses and negative cash flow will not surpass our expectations, and thus, we may be required to raise
additional capital or reduce our operating expenditures in the future. Additional financing may take the form of loans under a new credit facility, the issuance of bonds or other types of debt securities, the issuance of equity securities or a
combination of the foregoing. Any such financing must either comply with the covenants of our existing credit facilities, or we will need to obtain waivers from the lenders. Our credit facilities contain covenants that restrict our ability to incur
debt and will require mandatory prepayments from the proceeds of an equity financing. Any debt financing obtained may impose various restrictions and additional covenants on us which could limit our ability to respond to market conditions, provide
for unanticipated capital investments or take advantage of business opportunities and may subject us to significant interest expense. Additional equity financing may be obtained on terms that are dilutive to the interests of existing stockholders.
We have been successful in the past raising capital to address our liquidity needs; however, debt or additional equity financing may not be available when needed in the future on terms favorable to us or at all, and the failure to attract a
sufficient amount of additional debt or equity capital may impair our ability to execute on our business plan. Such additional capital may be provided by, among other things, the cash proceeds from the exercise of the outstanding warrants to
purchase shares of our common stock. There is no assurance that we will be successful in obtaining additional financing, if needed, or that we will be able to reduce our operating expenditures. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Operating Activities

For the nine months ended September 30, 2010, cash used in operating activities was approximately $22.2 million, consisting primarily
of a net loss of $67.3 million partially offset by $21.7 million of net changes in operating assets and liabilities, $10.3 million of depreciation and amortization, $6.0 million of interest accrued on long-term indebtedness that was paid in-kind
with such accrued interest being added to the outstanding principal balance of the debt, $4.6 million of discount and debt issuance cost amortization, $2.1 million of share-based compensation expense and $0.4 million of in-kind contributions from
non-controlling interests in a consolidated subsidiary. For the nine months ended September 30, 2009, cash used in operating activities was approximately $35.2 million, consisting primarily of a net loss of $141.4 million, partially offset by a
$62.3 million non-cash change in the market value of derivative instruments, the $19.1 million non-cash portion of the impairment charges, $7.5 million of depreciation and amortization, $7.0 million of net changes in operating assets and
liabilities, $5.5 million of interest accrued on long-term debt which will be paid in kind with such accrued interest being added to the outstanding principal balance of the long-term debt, $3.3 million of amortization of debt issuance costs and
other discounts on the long-term debt, $1.0 million of share-based compensation expense and $0.5 million of non-cash interest expense related to the Series A Preferred Stock.

Investing Activities

For the nine months ended September 30, 2010,
cash used in investing activities, excluding purchases and maturities of short-term investments, was approximately $3.4 million, consisting primarily of $2.7 million of capitalized software costs related to Networkfleets operations, $1.0
million of capital expenditures related primarily to infrastructure necessary for our



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operations and an increase in restricted cash of $0.2 million, partially offset by $0.5 million of proceeds received from the disposal of certain available-for-sale assets. For the nine months
ended September 30, 2009, cash used in investing activities was approximately$12.8 million, consisting primarily of $11.2 million of capital expenditures related to infrastructure necessary for our operations, $10.2 million of capitalized
software costs and $0.2 million deposited into a restricted cash account to collateralize a letter of credit, partially offset by the release of $5.3 million of restricted cash that was previously held for the benefit of the lenders of the senior
secured term indebtedness and the release of $3.5 million of restricted cash previously held to collateralize a letter of credit that secured certain lease obligations.

Financing Activities

For the nine months ended September 30, 2010,
cash provided by financing activities was approximately $20.0 million, consisting of $14.9 million of net proceeds in connection with the issuance of common stock and $10.0 million of proceeds from the sale of non-controlling interests in Lifecomm,
partially offset by $3.2 million of payments on capital lease obligations and $1.7 million of repayments on long-term debt. For the nine months ended September 30, 2009, cash provided by financing activities was approximately $52.0 million,
consisting of $97.2 million of net proceeds provided by the Merger and $35.2 million of net proceeds from the issuance and sale of Series B Preferred Stock, partially offset by $74.4 million paid to repurchase common shares in connection with the
closing of the Merger and $6.0 million of payments on capital lease obligations.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. These
accounting principles require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expense during the
periods presented. Although these estimates are based on managements knowledge of current events and actions we may undertake in the future, actual results may differ from estimates. For a complete description of our critical accounting
policies, refer to Managements Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K filed with the SEC on March 16, 2010.

Recent Accounting Pronouncements

See Item 1 of Part I of this Quarterly Report on Form 10-Q, Financial Statements  Note 5  Recent Accounting Pronouncements.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Interest Rate Risk

As of September 30, 2010, we had approximately
$23.6 million of cash, cash equivalents, short-term investments and restricted cash. This cash, cash equivalents, short-term investments and restricted cash is 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.

We may suffer from fluctuating interest rates, which may adversely impact our
consolidated results of operations and cash flows. As of September 30, 2010, we had outstanding debt with an aggregate face amount, including interest which has been paid in kind, of approximately $120.2 million, which included variable rate
borrowings of approximately $76.9 million. As of September 30, 2010, the hypothetical impact of a one percentage point increase in interest rates related to our outstanding variable rate debt would be to increase annual interest expense by
approximately $0.8 million.



|Item 4. | Controls and Procedures
|------- | -----------------------

Disclosure
Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Senior Vice President
Finance and Treasurer, 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 Senior Vice President Finance and Treasurer, 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.



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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, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

None.



|Item 1A. | Risk Factors
|-------- | ------------

In
evaluating our common stock, you should carefully consider, in connection with other information in this report, the risks described in Item1A of Part I in our Annual Report on Form 10-K for the year ended December 31, 2009 filed with the SEC
on March 16, 2010. The risks and uncertainties described therein are not the only ones we face. Additional risks and uncertainties not presently known to us may also impair our operations and business. If we do not successfully address any of
these risks, there could be a material adverse effect on our financial condition, operating results and business, and the trading price of our common stock may decline. We cannot assure you that we will successfully address these risks.



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

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Reserved
|------- | --------



|Item 5. | Other Information
|------- | -----------------

None.



|Item 6. | Exhibits
|------- | --------

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



|              |  |   |  |                                                                                                                                                                                                                                                     
|------------- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  |   |  | Description                                                                                                                                                                                                                                         
|              |  |  
|10.1          |  |  |  | Amended and Restated Senior Unsecured Promissory Note, dated November 5, 2010, issued to Hughes Network Systems, LLC                                                                                                                                
|              |  |  
|10.2          |  |  |  | Amendment Agreement, dated November 5, 2010, by and between HUGHES Telematics, Inc. and Hughes Network Systems, LLC                                                                                                                                 
|              |  |  
|31.1          |  |  |  | Certification of Jeffrey A. Leddy, Chief Executive Officer of HUGHES Telematics, 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, Senior Vice President Finance and Treasurer of HUGHES Telematics, 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 of HUGHES Telematics, 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, Senior Vice President Finance and Treasurer of HUGHES Telematics, Inc., Pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.                                



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SIGNATURES

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



|                       |  |     |  |                              
|---------------------- |  | --- |  | -----------------------------
|Date: November 8, 2010 |  | By: |  | /s/ JEFFREY A. LEDDY         
|                       |  |     |  | Jeffrey A. Leddy             
|                       |  |     |  | Chief Executive Officer      
|                       |  |     |  | (Principal Executive Officer)



|                       |  |     |  |                                             
|---------------------- |  | --- |  | --------------------------------------------
|Date: November 8, 2010 |  | By: |  | /s/ CRAIG J. KAUFMANN                       
|                       |  |     |  | Craig J. Kaufmann                           
|                       |  |     |  | Senior Vice President Finance and Treasurer 
|                       |  |     |  | (Principal Financial and Accounting Officer)



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