##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
    THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    001-33118
 ORBCOMM INC.
 (Exact name of registrant in its
    charter)
  Delaware

41-2118289(State or other jurisdiction
    of
    incorporation of organization)

(I.R.S. Employer 
    Identification Number)2115 Linwood Avenue
    Fort Lee, New Jersey 07024(Address of principal
    executive offices)   Registrants telephone number, including area code:
 (201) 363-4900
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class:

Name of Each Exchange on Which Registered:Common stock, par value
    $0.001 per share

The Nasdaq Stock Market, LLC   Securities registered pursuant to Section 12(g) of the
    Act:
   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ
        DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 



Table of
    Contents
  PagePART IItem 1.

Business


1Item 1A.

Risk
    Factors


22Item 1B.

Unresolved Staff
    Comments


33Item 2.

Properties


33Item 3.

Legal
    Proceedings


34Item 4.

Submission of
    Matters to a Vote of Security Holders


36PART IIItem 5.

Market for
    Registrants  Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities


36Item 6.

Selected Financial
    Data


39Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


40Item 7A.

Quantitative and
    Qualitative Disclosures about Market Risks


60Item 8.

Financial
    Statements and Supplementary Data


61Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


61Item 9A.

Controls and
    Procedures


61Item 9B.

Other
    Information


62PART IIIItem 10.

Directors and
    Executive Officers of the Registrant and Corporate
    Governance


62Item 11.

Executive
    Compensation


63Item 12.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


63Item 13.

Certain
    Relationships and Related Transactions, and Director
    Independence


63Item 14.

Principal
    Accountant Fees and Services


68PART IVItem 15.

Exhibits and
    Financial Statement Schedules


69SIGNATURES


70EX-3.1: RESTATED CERTIFICATE OF INCORPORATIONEX-3.2: AMENDED BYLAWSEX-16: LETTER OF J.H. COHN LLPEX-21: SUBSIDIARIESEX-23.1: CONSENT OF DELOITTE & TOUCHE LLPEX-24: POWER OF ATTORNEYEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




---



##### Table of Contents



Forward-
    Looking Statements
  Form 10-K Form 10-K.
 PART I  Item 1.
    Business  Overview
  machine-to-machine
   1




---



##### Table of Contents



Our
    Business Strengths and Competitive Advantage
    
    Established global network and proven
    technology.  We believe our global network and
    technology enable us to offer superior products and services to
    the end-users of our communications system in terms of
    comprehensive coverage, reliability and compatibility. Our
    global network provides worldwide coverage, including in
    international waters, allowing end-users to access our
    communications system in areas outside the coverage of
    terrestrial networks, such as cellular, paging and other
    wireless networks. Our proven technology offers full two-way M2M
    data communication (with acknowledgement of message receipt)
    with minimal
    line-of-sight
    limitations and no performance issues during adverse weather
    conditions, which distinguishes us from other satellite
    communications systems. Our primary satellite orbital planes
    contain six to eight satellites each, providing built-in system
    redundancies in the event of a single satellite malfunction. In
    addition, our system uses a single global technology standard
    and eliminates the need for multiple network agreements and
    versions of hardware and software.
    Low cost structure.  We have a significant cost
    advantage over any potential new LEO satellite system competitor
    with respect to our current satellite constellation, because we
    acquired the majority of our current network assets from ORBCOMM
    Global L.P., referred to as the Predecessor Company, and its
    subsidiaries out of bankruptcy for a fraction of their original
    cost. In addition, because our LEO satellites are relatively
    small and deployed into low-Earth orbit, the constellation is
    less expensive and easier to launch and maintain than larger LEO
    satellites and large geostationary satellites. We believe that
    we have less complex and less costly ground infrastructure and
    subscriber communication equipment than other satellite
    communications providers. Our low cost satellite system
    architecture enables us to provide global two-way wireless
    narrowband data communication services to end-users at prices
    that we believe are the lowest in the industry for global
    connectivity.
    Sole commercial satellite operator licensed in the VHF
    spectrum.  We are the sole commercial satellite
    operator licensed to operate in the 137-150 MHz VHF
    spectrum by the FCC or, to our knowledge, any other national
    spectrum or radio-telecommunications regulatory agency in the
    world. The spectrum that we use was allocated globally by the
    International Telecommunication Union, or ITU, for use by
    satellite fleets such as ours to provide mobile data
    communications service. We are currently authorized, either
    directly or 2




---



##### Table of Contents



indirectly, to provide our data communications service in over
    75 countries and territories, representing over 60% of the
    worlds GDP, in North America, Europe, South America, Asia,
    Africa and Australia. VHF spectrum has inherent advantages for
    M2M data communications over systems using shorter wavelength
    signals. The VHF signals used to communicate between our
    satellites and subscriber communicators are not affected by
    weather and are less dependent on
    line-of-sight
    access to our satellites than other satellite communications
    systems. In addition, our longer wavelength signals enable our
    satellites to communicate reliably over longer distances at
    lower power levels. Higher power requirements of commercial
    satellite systems in other spectrum bands are a significant
    factor in their higher cost and technical complexity.  
    Significant market lead over satellite-based
    competitors.  We believe that we have a
    significant market lead in providing M2M data communications
    services that meet the coverage and cost requirements in the
    rapidly developing asset management and supply chain markets.
    The process required to establish a competing satellite-based
    system with the advantages of a VHF system includes obtaining
    regulatory permits to launch and operate satellites and to
    provide communications services, and the design, development and
    construction of a communications system. We believe that a
    minimum of five years and significant investments in time and
    resources would be required for another satellite-based M2M data
    communications service provider to develop the capability to
    offer comparable services. Our VARs and IVARs have made
    significant investments in developing ORBCOMM-based
    applications. These applications often require substantial time
    and financial investment to develop for commercial use.
    Key distribution and OEM customer
    relationships.  Our strategic relationships with
    key distributors and OEMs have enabled us to streamline our
    sales and distribution channels and shift much of the risk and
    cost of developing and marketing applications to others. We have
    established strategic relationships with key service providers,
    such as GE Equipment Services, the worlds largest lessor
    of trailers, containers and railcars, and XATA Corporation, a
    leading provider of tracking solutions for the trucking
    industry, including to Penske Corporation, the leading truck
    leasing company in the United States, and major OEMs, such as
    Caterpillar, Komatsu, Hitachi and Volvo. We believe our close
    relationships with these distributors and OEMs allows us to work
    closely with them at all stages of application development, from
    planning and design through implementation of our M2M data
    communications services, and to benefit from their
    industry-specific expertise. By fostering these strong
    relationships with distributors and OEMs, we believe that once
    we have become so integrated into our customers planning,
    development and implementation process, and their equipment, we
    anticipate it will be more difficult to displace us or our
    communication services. In addition, the fixed and mobile assets
    which are tracked, monitored, controlled and communicated with
    by these customers generally have long useful lives and the cost
    of replacing our communications equipment with an alternative
    service providers equipment could be prohibitive for large
    numbers of assets.
    Reliable, low cost subscriber
    communicators.  There are multiple manufacturers
    that build subscriber communicators for our network. Through our
    Stellar Satellite Communications, Ltd. subsidiary, we have an
    arrangement with Delphi Corporation that provides us with
    industrial-scale manufacturing capability for the supply of low
    cost, reliable, ISO-9001 certified, automotive grade subscriber
    communicators. We believe that Delphi possesses the ability to
    scale up its manufacturing rapidly to meet additional demand. We
    also have arrangements with independent third party
    manufacturers who supply our customers and end-users directly
    with low cost subscriber communicators. As a result of these
    manufacturing relationships, technological advances and higher
    volumes, we have significantly reduced the selling price of our
    subscriber communicators from approximately $280 per unit
    in 2003 to as little as $100 per unit in volume in 2006. In
    addition, the cost of communications components necessary for
    our subscriber communicators to operate in the VHF band is
    relatively low as they are based on readily available FM radio
    components.  Our
    Strategy
   3




---



##### Table of Contents




    Expand our low cost, multi-channel marketing and distribution
    network of resellers.  We intend to increase
    further the number of resellers that develop, market and
    implement their applications together with our communications
    services and subscriber communicators to end-users. We are also
    focused on increasing the number of OEM and distributor
    relationships with leading companies that own, manage or operate
    fixed or mobile assets. We are seeking to recruit resellers with
    industry knowledge to develop applications that could be used
    for industries or markets that we do not currently serve.
    Resellers invest their own capital developing applications
    compatible with our system, and they typically act as their own
    agents and systems integrators when marketing these applications
    to end-users, without the need for significant investment by us.
    As a result, we have established a low cost marketing and
    distribution model that is both easily scalable by adding
    additional resellers or large-scale asset deployers, and allows
    us to penetrate markets without incurring substantial research
    and development costs or sales and marketing costs.
    Expand our international markets.  Our
    international growth strategy is to open new markets outside the
    United States by obtaining regulatory authorizations and
    developing markets for our M2M data communications services to
    be sold in regions where the market opportunity for our OEM
    customers and resellers is greatest. We are currently authorized
    to provide our data communications services in over 75 countries
    and territories in North America, Europe, South America, Asia,
    Africa, Mexico and Australia, directly or indirectly through
    seven international licensees and 12 country representatives. We
    are currently working with 52 international value-added
    resellers, or IVARs, who, generally, subject to certain
    regulatory restrictions, have the right to market and sell their
    applications anywhere our communications services are offered.
    We seek to enter into agreements with strong distributors in
    each region. Our regional distributors, which include country
    representatives and international licensees, obtain the
    necessary regulatory authorizations and develop local markets
    directly or by recruiting local VARs. In some international
    markets where distribution channels are in the early stages of
    development, we seek to bring together VARs who have developed
    well-tested applications with local distributors to create
    localized solutions and accelerate the adoption of our M2M data
    communications services. In addition, we have made efforts to
    strengthen the financial positions of certain of our regional
    distributors, including several, such as ORBCOMM Europe LLC, who
    were former licensees of the predecessor company left weakened
    by its bankruptcy, through restructuring transactions whereby we
    obtained greater operating control over such regional
    distributors. We believe that by strengthening the financial
    condition of and our operating control over these established
    regional distributors, they will be better positioned to promote
    and distribute our products and services and enable us to
    achieve our market potential in the relevant regions.
    Further reduce subscriber communicator
    costs.  We are working with our subscriber
    communicator manufacturers to further reduce the cost of our
    subscriber communicators, as well as to develop technological
    advances, including further reductions in size, improvements in
    power management efficiency, increased reliability and enhanced
    capabilities. For example, our subscriber communicator supplier
    Delphi, and independent supplier Mobile Applitech, Inc., are
    developing next-generation subscriber communicators which will
    contain custom integrated circuits combining the functionality
    of several components, which we believe will lead to reduced
    costs. Our ability to offer our customers less expensive
    subscriber communicators that are smaller, more efficient and
    more reliable is key to our ability to provide a complete low
    cost solution to our customers and end-users.
    Reduce network latency.  With the expected
    launch of our quick-launch and next-generation satellites, we
    expect to reduce the time lags in delivering messages and data,
    or network latency, in most regions of the world. We believe
    this will improve the quality and coverage of our system and
    enable us to increase our customer base. 4




---



##### Table of Contents




    Introduce new features and services.  We will
    continue to develop and introduce new features and services to
    expand our customer base and increase our revenues. For example,
    we have recently developed a broadcast capability that allows
    large numbers of subscriber communicators to receive a single
    message simultaneously. This represents an efficient delivery
    mechanism to address large populations of subscribers with a
    single message, such as weather data broadcasts, widespread
    alert notifications and demand response applications for
    electric utilities. In addition, we have been working closely
    with the U.S. Coast Guard to incorporate the ability to
    receive marine vessel identification and position data from the
    Automatic Identification System, or AIS, an internationally
    mandated shipboard broadcast system that aids navigation and
    improves maritime safety. We may be able to leverage this work
    with AIS to resell, subject in certain circumstances to
    U.S. Coast Guard approval, AIS data collected by our
    network to other coast guard services and governmental agencies,
    as well as companies engaged in security or logistics businesses
    for tracking shipping activities or for other navigational
    purposes. We also believe that subscriber communicator
    technology advances, such as dual-mode devices combining our
    subscriber communicators with communications devices for
    cellular networks, will broaden our addressable market by
    allowing our communications services to serve as an effective
    backup system for higher bandwidth terrestrial wireless or
    cellular networks or as a back-channel service for terrestrial
    or satellite-based broadcast-only networks.
    Provide comprehensive technical support, customer service and
    quality control.  We have allocated additional
    resources to provide customer support for training, integration
    and testing in order to assist our VARs and other distributors
    in the roll-out of their applications and to enhance end-user
    acquisition and retention. We provide our VAR and OEM customers
    with access to customer support technicians. We also deploy our
    technicians to our VAR and OEM customers to facilitate the
    integration of our M2M data communications system with their
    applications during the planning, development and implementation
    processes and to certify that these applications are compatible
    with our system. Our support personnel include professionals
    with application development, in-house laboratory and hardware
    design and testing capabilities.  Industry
    Overview
    machine-to-machine
    
    Fixed or mobile assets.  Intelligent or
    trackable assets include devices and sensors that collect,
    measure, record or otherwise gather data about themselves or
    their environment to be used, analyzed or otherwise disseminated
    to other machines, applications or human operators and come in
    many forms, including devices and sensors that:  
    Report the location, speed and fuel economy data from trucks and
    locomotives;
    Monitor the location and condition of trailers, railcars and
    marine shipping containers;
    Report operating data and usage for heavy equipment; 5




---



##### Table of Contents




    Monitor fishing vessels to enforce government regulations
    regarding geographic and seasonal restrictions;
    Report energy consumption from a utility meter;
    Monitor corrosion in a pipeline;
    Monitor fluid levels in oil storage tanks;
    Measure water delivery in agricultural pipelines;
    Detect movement along international borders; and
    Monitor environmental conditions in agricultural facilities.  
    Communications network.  The communications
    network enables a connection to take place between the fixed or
    mobile asset and the back-office systems and users of that
    assets data. The proliferation of terrestrial and
    satellite-based wireless networks has enabled the creation of a
    variety of M2M data communications applications. Networks that
    are being used to deliver M2M data include terrestrial
    communications networks, such as cellular, radio paging and WiFi
    networks, and satellite communications networks, utilizing
    low-Earth-orbit or geosynchronous satellites.
    Back-office application or user.  Data
    collected from a remote asset is used in a variety of ways with
    applications that allow the end-user to track, monitor, control
    and communicate with these assets with a greater degree of
    control and with much less time and expense than would be
    required to do so manually.  Market
    Opportunity
  Commercial
    transportation
      Heavy
    equipment
  time-of-use
 6




---



##### Table of Contents



Fixed
    asset monitoring
  on-site
  Marine
    vessels
  e-mail
  Government
    and homeland security
      Consumer
    transportation
   7




---



##### Table of Contents



back-up
  Products
    And Services
      Satellite
    communications services
     8




---



##### Table of Contents



Market

Select Customers/End-Users

Representative Applications

Key BenefitsCommercial
    transportation

 DriverTech

 GE Equipment Services

 Crossbridge Solution

 Volvo Group

 XATA Corporation

 Fleet Management Services

 Air IQ

 Position reporting

 Units diagnostic monitoring

 Compliance / tax reporting

 Cargo monitoring

 Systems control

 Improve fleet productivity and profitability

 Enable efficient, centralized fleet management

 Ensure safe delivery of shipping cargo

 Allow real-time tracking of unit maintenance requirementsHeavy equipment

 Caterpillar, Inc.

 Hitachi Construction . Machinery Co., Ltd.

 Komatsu Ltd.

 Volvo Group

 Position reporting

 Unit diagnostic monitoring

 Usage tracking

 Emergency notification

 Improve fleet productivity and profitability

 Allow OEMs to better anticipate the maintenance and spare parts needs of their customersFixed asset monitoring

 American Innovations, Ltd.

 Automata, Inc.

 GE Equipment Services

 Electronic Sensors, Inc.

 Metrix Networks, Inc.

 Unit diagnostic monitoring

 Usage tracking

 Systems control

 Automated meter reading

 Provide method for managing, controlling, and collecting data from remote sites

 Improve maintenance services productivity and profitabilityMarine vessels

 Metocean Data Systems Ltd.

 Recreational boaters*

 Sasco Inc.

 Skymate, Inc.

 Volvo Group/Penta*

 Position reporting

 Two-way messaging

 Unit diagnostic monitoring

 Weather reporting

 Ensure vessel compliance with regulations

 Create a low cost information channel to disseminate critical weather and safety informationGovernment and homeland
    security

 National Oceanic and Atmospheric  Administration*

 U.S. Coast Guard

 U.S. Customs and Border Protection*

 U.S. Marine Corps*

 Container tracking

 Environmental monitoring

 Automatic Identification System development

 Border monitoring

 Vehicle tracking

 Provide efficient monitoring of changing environmental conditions

 Address increasing need to monitor vessels in U.S. waters

 Minimize security threats and secure border     *
    
    Represents an end-user from which we directly dervive revenue
    through VARs or other resellers.  Subscriber
    communicators
     9




---



##### Table of Contents



Customers
    Key
    Strategic Relationships
  Delphi
    Automotive Systems LLC
    General
    Electric Company
     10




---



##### Table of Contents



U.S. Coast
    Guard
    Sales,
    Marketing and Distribution
    
  VARs and IVARs.
 11




---



##### Table of Contents



International licensees and country
    representatives.
  sub-licensees
   12




---



##### Table of Contents



Subscriber
    communicators
    Competition
    Terrestrial
    tower-based networks
  back-up
 13




---



##### Table of Contents



Low-Earth
    orbit mobile satellite service providers
    Geostationary
    satellite service providers
    Research
    and Development
      Backlog
     14




---



##### Table of Contents



Orbcomm
    Communications System
  Overview
  store-and-forward
    
    The space segment, which consists of a constellation of 30
    operational satellites in multiple orbital planes between 435
    and 550 miles above the Earth (four primary planes of six
    to eight satellites each operating in the VHF band; and two
    polar planes of one satellite each);
    The ground and control segment, which consists of fourteen
    operational gateway earth stations that send signals to and
    receive signals from the satellites, five gateway control
    centers that process message traffic and forward it through the
    gateway earth stations to the satellites or to appropriate
    terrestrial communications networks for transmission to the
    back-office application or end-user and the network control
    center (including two of the five gateway control centers)
    located in Dulles, Virginia, which monitors and manages the flow
    of information through the system and provides the command,
    control and telemetry functions to optimize satellite
    availability; and
    The subscriber segment, which consists of the subscriber
    communicators used by end-users to transmit and receive messages
    to and from their assets and our satellites.  e-mail
  store-and-forward
  e-mail
  System
    Status
  Satellite
    Health
   15




---



##### Table of Contents



Gateway
    Health
    month-to-month
  Network
    Capacity
    Regulation
    of the System in the United States
  FCC
    authorization
   16




---



##### Table of Contents



License
    renewal
    FCC
    license conditions
  and/or
   17




---



##### Table of Contents



Non-common
    carrier status
  truth-in-billing
  United
    States import and export control regulations
    Regulation
    of our System in Other Countries
  Communications
    services
  and/or and/or
    and/or
 18




---



##### Table of Contents



Non-U.S. gateway
    earth stations
    Equipment
    standards
  and/or and/or
  International
    Regulation of our System
         19




---



##### Table of Contents



Intellectual
    Property
        Employees
    Corporate
    Information
  (201) 363-4900. www.orbcomm.com Form 10-K.
  Executive
    Officers of the Registrant:
    Name

Age

Position(s)Jerome B. Eisenberg


67


Chairman of the Board, Chief
    Executive Officer and PresidentRobert G. Costantini


47


Executive Vice President and Chief
    Financial OfficerMarc Eisenberg


40


Chief Operating OfficerEmmett Hume


53


Executive Vice President,
    InternationalJohn J. Stolte, Jr.


47


Executive Vice
    President  Technology and Operations   Jerome B. Eisenberg
 20




---



##### Table of Contents



Robert G. Costantini
  Marc Eisenberg
  Emmett Hume
  John J. Stolte, Jr.
 21




---



##### Table of Contents



Item 1A.
    Risk
    Factors  Set forth below and elsewhere in this Annual Report on
    Form 10-K
    are risks and uncertainties that could cause actual results to
    differ materially from the results contemplated by the
    forward-looking statements contained in this Annual Report on
    Form 10-K.
    Any of these risks could also materially and adversely affect
    our business, financial condition or the price of our common
    stock. Because of the following factors, as well as other
    variables affecting our operating results, past financial
    performance should not be considered as a reliable indicator of
    future performance and investors should not use historical
    trends to anticipate results or trends in future periods.
  Risks
    Relating to Our Business
  We are
    incurring substantial operating losses and net losses. We
    anticipate additional future losses. We must significantly
    increase our revenues to become profitable.
      We may
    need additional capital, which may not be available to us when
    we need it on favorable terms, or at all.
    We
    incur significant costs as a result of operating as a public
    company, and our management devotes substantial time to new
    compliance initiatives.
   22




---



##### Table of Contents



If
    end-users do not accept our services and the applications
    developed by VARs or we cannot obtain the necessary regulatory
    approvals or licenses for particular countries or territories,
    we will fail to attract new customers and our business will be
    harmed.
    line-of-sight
    We
    face competition from existing and potential competitors in the
    telecommunications industry, including numerous terrestrial and
    satellite-based network systems with greater resources, which
    could reduce our market share and revenues.
     23




---



##### Table of Contents



We
    have a limited operating history, which makes it difficult to
    evaluate your investment in us.
    
    successfully construct, launch, place in commercial service,
    operate and maintain our quick-launch and next-generation
    satellites in a timely and cost-effective manner;
    develop licensing and distribution arrangements in key markets
    within and outside the United States sufficient to capture and
    retain an adequate customer base;
    install the necessary ground infrastructure and obtain and
    maintain the necessary regulatory and other approvals in key
    markets outside the United States through our existing or future
    international licensees to expand our business internationally;
    provide for the timely design, manufacture and distribution of
    subscriber communicators in sufficient quantities, with
    appropriate functional characteristics and at competitive
    prices, for various applications; and    We
    rely on third parties to market and distribute our services to
    end-users. If these parties are unwilling or unable to provide
    applications and services to end-users, our business will be
    harmed.
    Defects
    or errors in applications could result in end-users not being
    able to use our services, which would damage our reputation and
    harm our financial condition.
   24




---



##### Table of Contents



Because
    we depend on a significant customer for a substantial portion of
    our revenues, the loss of this customer could seriously harm our
    business.
    If our
    international licensees and country representatives are not
    successful in establishing their businesses outside of the
    United States, the prospects for our business will be
    limited.
  and/or and/or and/or
  Some
    of our international licensees and country representatives are
    experiencing significant operational and financial difficulties
    and have in the past defaulted on their obligations to
    us.
  and/or
  We
    rely on a limited number of manufacturers for our subscriber
    communicators. If we are unable to, or cannot find third parties
    to, manufacture a sufficient quantity of subscriber
    communicators at a reasonable price, the prospects for our
    business will be negatively impacted.
   25




---



##### Table of Contents



We
    depend on recruiting and retaining qualified personnel and our
    inability to do so would seriously harm our
    business.
    Our
    management team is subject to a variety of demands for its
    attention and rapid growth and litigation could further strain
    our management and other resources and have a material adverse
    effect on our business, financial condition and results of
    operations.
   26




---



##### Table of Contents



We may
    be subject to litigation proceedings that could adversely affect
    our business.
    Our
    business is characterized by rapid technological change and we
    may not be able to compete with new and emerging
    technologies.
    Because
    we operate in a highly regulated industry, we may be subjected
    to increased regulatory restrictions which could disrupt our
    service or increase our operating costs.
    Our
    business would be negatively impacted if the FCC revokes or
    fails to renew or amend our licenses.
  i.e.
 27




---



##### Table of Contents



Our
    business would be harmed if our international licensees and
    country representatives fail to acquire and retain all necessary
    regulatory approvals.
  and/or and/or
  There
    are numerous risks inherent to our international operations that
    are beyond our control.
  country-by-country region-by-region)
  We do
    not currently maintain in-orbit insurance for our
    satellites.
   28




---



##### Table of Contents



Risks
    Related to our Technology
  We do
    not currently have
    back-up
    facilities for our network control center. In the event of a
    general failure at our network control center, our system will
    be disrupted and our operations will be harmed.
  back-up back-up back-up
  New
    satellites are subject to launch failures, the occurrence of
    which can materially and adversely affect our
    operations.
    Our
    satellites have a limited operating life. If we are unable to
    deploy replacement satellites, our services will be
    harmed.
    We are
    dependent on a limited number of suppliers to provide the
    payload, bus and launch vehicle for our quick-launch and
    next-generation satellites and any delay or disruption in the
    supply of these components and related services will adversely
    affect our ability to replenish our satellite constellation and
    adversely impact our business, financial condition and results
    of operations.
   29




---



##### Table of Contents



Once
    launched and properly deployed, our satellites are subject to
    significant operating risks due to various types of potential
    anomalies.
    
    Mechanical failures due to manufacturing error or defect,
    including:  
    Mechanical failures that degrade the functionality of a
    satellite, such as the failure of solar array panel deployment
    mechanisms;
    Antenna failures that degrade the communications capability of
    the satellite;
    Circuit failures that reduce the power output of the solar array
    panels on the satellites;
    Failure of the battery cells that power the payload and
    spacecraft operations during daily solar eclipse
    periods; and
    Communications system failures that affect overall system
    capacity.  
    Equipment degradation during the satellites lifetime,
    including:  
    Degradation of the batteries ability to accept a full
    charge;
    Degradation of solar array panels due to radiation; and
    General degradation resulting from operating in the harsh space
    environment.  
    Deficiencies of control or communications software, including:  
    Failure of the charging algorithm that may damage the
    satellites batteries;
    Problems with the communications and messaging servicing
    functions of the satellite; and
    Limitations on the satellites digital signal processing
    capability that limit satellite communications capacity.  and/or
 30




---



##### Table of Contents



Technical
    or other difficulties with our gateway earth stations could harm
    our business.
    Our
    system could fail to perform or perform at reduced levels of
    service because of technological malfunctions or deficiencies or
    events outside of our control which would seriously harm our
    business and reputation.
  Form 10-K
 31




---



##### Table of Contents



Risks
    Related to an Investment in our Common Stock
  The
    trading price of our common stock maybe adversely affected
    market volatility
  :
  
    liquidity of the market in, and demand for, our common stock;
    changes in expectations as to our future financial performance
    or changes in financial estimates, if any, of market analysts;
    actual or anticipated fluctuations in our results of operations,
    including quarterly results;
    our financial performance failing to meet the expectations of
    market analysts or investors;
    our ability to raise additional funds to meet our capital needs;
    the outcome of any litigation by or against us, including any
    judgments favorable or adverse to us;
    conditions and trends in the end markets we serve and changes in
    the estimation of the size and growth rate of these markets;
    announcements relating to our business or the business of our
    competitors;
    investor perception of our prospects, our industry and the
    markets in which we operate;
    changes in our pricing policies or the pricing policies of our
    competitors;
    loss of one or more of our significant customers;
    changes in governmental regulation;
    changes in market valuation or earnings of our
    competitors; and
    general economic conditions.    class-action
  If
    securities or industry analysts do not publish research or
    publish inaccurate or unfavorable research about our business,
    our stock price and trading volume could decline.
   32




---



##### Table of Contents



A
    significant portion of our outstanding common stock will soon be
    released from restrictions on resales and may be sold in the
    market in the near future. Future sales of shares by existing
    stockholders could cause our stock price to
    decline.
  lock-up lock-up lock-up
  We are
    subject to anti-takeover provisions which could affect the price
    of our common stock.
  2 3
 Item 1B.  Unresolved
    Staff Comments  None
  Item 2.
    Properties    Gateway

Real Property Owned or Leased

Lease ExpirationSt. Johns, Arizona

Owned

n/aArcade, New York

Owned

n/aCuraçao, Netherlands Antilles

Owned

n/aRutherglen Vic, Australia

Owned

n/aOcilla, Georgia

Leased

March 12, 2013East Wenatchee, Washington

Leased

May 4, 2008  33




---



##### Table of Contents



Item 3.
    Legal
    Proceedings  Quake
    Global, Inc.
         34




---



##### Table of Contents



and/or Complaint-In-Intervention Complaint-In-Intervention
  ORBCOMM
    Asia Limited
       35




---



##### Table of Contents



Item 4.
    Submission
    of Matters to Vote of Security Holders  a)
    In October 2006, in connection with our initial public offering,
    stockholders acted by written consent in lieu of a special
    meeting of the stockholders to approve the following matters:  1)
    A 2-for-3
    reverse stock split applicable to all issued and outstanding
    shares of our common stock as well as the conversion ratios of
    our Series A and Series B preferred stock.2)
    The adoption upon completion of our initial public offering of
    the Amended and Restated Certificate of Incorporation, which
    among other things, (i) increases the number of authorized
    shares of our common stock to 250,000,000, (ii) authorizes
    up to 50,000,000 shares of preferred stock, with such
    rights and preferences as may be designated by our Board of
    Directors without further action by our stockholders,
    (iii) provides for a classified board of directors,
    (iv) eliminates the ability of stockholders to take action
    by written consent or call special meetings of stockholders and
    (v) provides for a supermajority requirement for
    stockholders to amend specified provisions of our certificate of
    incorporation and bylaws.  b)
    In October 2006, in connection with our initial public offering,
    our Series B preferred stockholders acted by written
    consent in lieu of a special meeting of the stockholders to
    approve the automatic conversion of the Series B preferred
    stock into shares of common stock, upon the closing of our
    initial public offering at an initial public offering price per
    share of not less than $11.00. PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Price of
    our Common Stock
      High


Low2006:Fourth Quarter (beginning on
    November 3, 2006)

$
11.10


$
7.03     Initial
    Public Offering and Use of Proceeds from Sales of Registered
    Securities
  Form S-1, No. 333-134088),
   36




---



##### Table of Contents



Sales of
    Unregistered Securities
    Dividend
    Payments
  Common stock:
  Series A preferred stock:
  Series B preferred stock:
    Dividend
    Policy
    Securities
    Authorized for Issuance under Equity Compensation
    Plans
   37




---



##### Table of Contents



Stock
    Performance Graph
      COMPARISON
    OF 4 MONTH CUMULATIVE TOTAL RETURN
 Among ORBCOMM Inc., The Russell 2000 Index
 And The NASDAQ Telecommunications Index
  
   11/3/06


12/29/06


2/28/07ORBCOMM
    Inc.


$
100.00



$
113.81



$
166.19Russell 2000



100.00




102.97




103.87NASDAQ
    Telecommunications



100.00




108.78




108.32  38




---



##### Table of Contents



Item 6.
    Selected
    Consolidated Financial Data  Form 10-K. Form 10-K. Form 10-K.
  Years Ended December 31,Consolidated Statement of Operations Data:

2006(1)


2005


2004


2003


2002(In thousands, except per share data)Service revenues

$
11,561


$
7,804


$
6,479


$
5,143


$
3,083Product sales


12,959



7,723



4,387



1,938



185Total revenues


24,520



15,527



10,866



7,081



3,268Costs and expenses:Costs of services


8,714



6,223



5,884



6,102



6,812Costs of product sales


12,092



6,459



4,921



1,833



96Selling, general and administrative


15,731



9,344



8,646



6,577



5,792Product development


1,814



1,341



778



546



439Total costs and expenses


38,351



23,367



20,229



15,058



13,139Loss from operations


(13,831
)


(7,840
)


(9,363
)


(7,977
)


(9,871
)Other income (expense), net


2,616



(1,258
)


(3,026
)


(5,340
)


(913
)Loss before extraordinary gain


(11,215
)


(9,098
)


(12,389
)


(13,317
)


(10,784
)Extraordinary gain on
    extinguishment of debt


















5,927Net loss

$
(11,215
)

$
(9,098
)

$
(12,389
)

$
(13,317
)

$
(4,857
)Net loss applicable to common
    shares(2)

$
(29,646
)

$
(14,248
)

$
(14,535
)Net loss per common share:Basic and diluted

$
(2.80
)

$
(2.51
)

$
(2.57
)Weighted average common shares
    outstanding:Basic and diluted


10,601



5,683



5,658   39




---



##### Table of Contents



As of December 31,Consolidated Balance Sheet Data:

2006(1)


2005


2004


2003


2002(In thousands)Cash and cash equivalents

$
62,139


$
68,663


$
3,316


$
78


$
166Marketable securities


38,850















Working capital (deficit)


100,887



65,285



8,416



(19,389
)


(5,461
)Satellite network and other
    equipment, net


29,131



7,787



5,243



3,263



4,354Intangible assets, net


7,058



4,375



317







Total assets


148,093



89,316



20,888



7,198



6,701Notes payable














12,107



3,699Note payable  related
    party


879



594











Convertible redeemable preferred
    stock






112,221



38,588







Stockholders equity
    (deficit) (membership interests)


128,712



(42,654
)


(28,833
)


(15,547
)


(4,730
)     (1)
    
    On November 8, 2006, we completed our initial public
    offering of 9,230,800 shares of common stock at a price of
    $11.00 per share. After deducting underwriting discounts
    and commissions and offering expenses we received proceeds of
    approximately $89.5 million. From these net proceeds we
    paid accumulated and unpaid dividends totaling $7.5 million
    to the holders of Series B preferred stock, a
    $3.6 million contingent purchase price payment relating to
    the acquisition of our interest in Satcom International Group
    plc and $10.1 million to the holders of Series B
    preferred stock in connection with obtaining consents required
    for the conversion of the Series B preferred stock into
    common stock. All outstanding shares of Series A and B
    preferred stock automatically converted into
    21,383,318 shares of common stock.(2)
    
    The net loss applicable to common shares for the year ended
    December 31, 2004 is based on our net loss for the period
    from February 17, 2004, the date on which the members of
    ORBCOMM LLC contributed all of their outstanding membership
    interests in exchange for shares of our common stock, through
    December 31, 2004. Net loss attributable to the period from
    January 1, 2004 to February 16, 2004 (prior to the
    Company becoming a corporation and issuing its common shares),
    has been excluded from the net loss applicable to common shares.
    As a result, net loss per common share for 2004 is not
    comparable to net loss per common share for 2006 and 2005.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis should be read in
    conjunction with our Consolidated Financial Statements and Notes
    which appear elsewhere in this Annual Report on
    Form 10-K.
    This discussion contains forward- looking statements that
    involve risks, uncertainties and assumptions. Our actual results
    could differ materially from those anticipated in these forward-
    looking statements as a result of various factors, including
    those set forth in Part I, Item 1A. Risk
    Factors and elsewhere in this Annual Report on
    Form 10-K.
  Organization
   40




---



##### Table of Contents



Overview
  machine-to-machine
    2006 Highlights
    
    On November 8, 2006, we closed our initial public offering
    in which we sold 9,230,800 shares of common stock at a
    price of $11.00 per share and all outstanding shares of our
    Series A and Series B preferred stock automatically
    converted into an aggregate of 21,383,318 shares of common
    stock;
    On October 10, 2006, our Stellar subsidiary entered into an
    agreement with GE Asset Intelligence, LLC, or AI, a subsidiary
    of GE Equipment Services, to supply up to 412,000 units of
    in-production and future models of Stellars subscriber
    communicators from August 1, 2006 through December 31,
    2009 to support AIs applications utilizing our M2M data
    communications system. Of the total volume level under the
    agreement, 270,000 units are non-cancelable except under
    specified early termination provisions of the agreement. The
    overall contract value at the full volume level would be
    approximately $57.0 million, subject to adjustment for
    additional engineering work, substitution of subscriber
    communicator models or other modifications pursuant to the terms
    of the agreement, and excludes any service revenues that we may
    derive from the activation and use of these subscriber
    communicators on our M2M data communications system under our
    separate pre-existing reseller agreement with AI;
    On September 20, 2006, Volvo Trucks North America announced
    that it will make its Volvo Link Sentry monitoring application,
    which utilizes our M2M data communications system, standard for
    all Volvo trucks with its US07 engines, which are expected
    to go on sale beginning in the first quarter of 2007; 41




---



##### Table of Contents




    On June 5, 2006, we entered into an agreement with
    OHB-System AG to supply the buses and related integration and
    launch services for our six quick-launch satellites, with
    options for two additional satellite buses and related
    integration services. The price for the six satellite buses and
    related integration and launch services is $20 million, or
    up to a total of $24.2 million if the options for the two
    additional satellite buses and related integration services are
    exercised on or before June 5, 2007, subject to certain
    price adjustments for late penalties and on-time or early
    delivery incentives. In addition, under the agreement,
    OHB-System AG will provide preliminary services relating to the
    development, demonstration and launch of our next-generation
    satellites at a cost of $1.35 million;
    On April 21, 2006, we entered into an agreement with
    Orbital Sciences Corporation to supply us with the payloads for
    our six quick-launch satellites. The price for the payloads is
    $17 million, subject to price adjustments for late
    penalties and on-time or early delivery incentives;
    On April 7, 2006, Hitachi Construction Machinery Co., Ltd.
    entered into an IVAR agreement with us to support Hitachis
    newly launched Global
    e-Service
    Business, making it the fourth major heavy equipment OEM to
    choose us for data communications;
    On March 14, 2006, the Trailer Fleet Services and Asset
    Intelligence divisions of GE Equipment Services announced an
    agreement under which GE Equipment Services will supply Wal-Mart
    Stores, Inc. with trailer tracking technology for its fleet of
    46,000
    over-the-road
    trailers using our M2M data communications system and
    In November and December 2005 and January 2006, we completed our
    Series B preferred stock financing totaling
    $72.5 million led by Pacific Corporate Group (PCG), which
    funded $30 million. New investors, in addition to PCG,
    included investment firms MH Equity Investors and Torch Hill
    Capital. Several existing investors also participated in these
    financings, including Ridgewood Capital, OHB Technology A.G.,
    Northwood Ventures LLC and our senior management. In January
    2006, we paid all accumulated and unpaid dividends on our
    Series A preferred stock, totaling $8.0 million, of
    which $1.3 million was reinvested by holders of our
    Series A preferred stock in shares of our Series B
    preferred stock financing. All of our outstanding preferred
    stock was converted to common stock upon completion of our IPO.  EBITDA
     42




---



##### Table of Contents



The following table reconciles our net loss to EBITDA for the
    periods shown:
  Years ended December 31,(In thousands)2006


2005


2004Net loss

$
(11,215
)

$
(9,098
)

$
(12,389
)Interest income


(2,582
)


(66
)


(49
)Other income










Interest expense(a)


237



308



1,318Depreciation and amortization


2,373



1,982



1,480EBITDA

$
(11,187
)

$
(6,874
)

$
(9,640
)     (a)
    
    Includes amortization of deferred debt issuance costs and debt
    discount of approximately $0, $31, $722, for the years 2006,
    2005 and 2004, respectively.        Revenues
  i.e.
 43




---



##### Table of Contents



Operating
    expenses
        Capital
    expenditures
   44




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
    Revenue
    recognition
     45




---



##### Table of Contents



e.g.
  Out-of-pocket
      Costs
    of revenues
    Accounts
    receivable
   46




---



##### Table of Contents



Satellite
    network and other equipment
        Long-lived
    assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets,
  Capitalized
    development costs
    Debt
    issuance costs and debt discount
  in-the-money No. 98-5 No. 00-27. paid-in-capital
 47




---



##### Table of Contents



Income
    taxes
    Accounting
    for Income Taxes.
  Loss
    contingencies
    Share-based
    compensation
   48




---



##### Table of Contents



Accounting for Stock Issued to
    Employees,
  Share-Based
    Awards Granted Prior to January 1, 2006
    Accounting for Stock-based
    Compensation No. 96-18, Accounting for Equity Instruments Issued to Other Than
    Employees for Acquiring, or in Conjunction with Selling, Goods
    or Services.
        Options


Weighted-Average


Fair Value of


Weighted-AverageGrant Date

Granted


Exercise Price


Common Stock


Intrinsic ValueFebruary 17, 2004


1,361,664


$
2.93


$
4.26


$
1.34July 6, 2004


83,333


$
4.26


$
4.26


$
December 3, 2004


83,333


$
4.26


$
4.26


$
   Share-Based Payment
   49




---



##### Table of Contents



Share-Based
    Awards Granted on or Subsequent to January 1,
    2006
    2-for-3
         50




---



##### Table of Contents



51




---



##### Table of Contents



Results
    of Operations
  Revenues
    Years Ended December 31,2006


2005


2004% of





% of





% ofTotal





Total





TotalService revenues

$
11,561



47.2
%

$
7,804



50.3
%

$
6,479



59.6
%Product sales


12,959



52.8
%


7,723



49.7
%


4,387



40.4
%$
24,520



100.0
%

$
15,527



100.0
%

$
10,866



100.0
%   2006 vs. 2005:
  2005 vs. 2004:
  Service
    revenues
  2006 vs. 2005:
 52




---



##### Table of Contents



2005 vs. 2004:
    Product
    sales
  2006 vs. 2005:
  2005 vs. 2004:
  Costs
    of services
   53




---



##### Table of Contents



2006 vs. 2005:
  2005 vs. 2004:
  Costs
    of product sales
    2006 vs. 2005:
  2005 vs. 2004:
  Selling,
    general and administrative expenses
   54




---



##### Table of Contents



2006 vs. 2005:
  2005 vs. 2004:
      Product
    development expenses
    2006 vs. 2005:
  2005 vs. 2004:
  Other
    income (expense)
  available-for-sale
  2006 vs. 2005:
 55




---



##### Table of Contents



2005 vs. 2004:
  Net
    loss and net loss applicable to common shares
  2006 vs. 2005:
  2005 vs. 2004:
  Liquidity
    and Capital Resources
  Overview
    Initial
    Public Offering
   56




---



##### Table of Contents



Operating
    activities
        Investing
    activities
       57




---



##### Table of Contents



Financing
    activities
        Future
    Liquidity and Capital Resource Requirements
    Contractual
    Obligations
    Payment due by PeriodLess than


1 to


AfterTotal


1 Year


3 Years


3 Years(In thousands)Quick-launch procurement agreements

$
20,500


$
18,400


$
2,100


$
Operating leases


1,853



995



858



Gateway earth station purchase
    obligation


944



944







Total

$
23,297


$
20,339


$
2,958


$
  58




---



##### Table of Contents



Quick-launch
    procurement agreements
      Related
    parties
    Off-
    Balance sheet Arrangements
    Recent
    Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Fair Value Measurements
  Considering the Effects of Prior
    Year Misstatements When Quantifying Misstatements in Current
    Year Financial Statements
  The Fair
    Value Option for Financial Assets and Financial Liabilities
 59




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest
    rate risk
    Effects
    of inflation risk
    Foreign
    currency risk
      Concentration
    of credit risk
    Vendor
    risk
    Market
    rate risk
  available-for-sale.
 60




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  page F-1 Form 10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.   Item 9A.  Controls
    and Procedures  Disclosure
    Controls and Procedures
  10-K, Rules 13a-15(e)
    Internal
    Control over Financial Reporting
  Form 10-K
  Changes
    in Internal Control over Financial Reporting
    Remediation
    of Material Weaknesses in Internal Control identified in
    2005
    
    Inadequate internal communication procedures between our
    management and the internal accounting staff on significant
    and/or complex transactions;
    A lack of thorough and rigorous review of contractual documents
    supporting complex transactions; 61




---



##### Table of Contents




    A significant number of adjustments to our 2005 and 2004
    financial statements, the recording of which resulted in
    material changes to our results of operations for each year;
    The absence of formal internal control procedures and the
    attendant control framework required to enforce those
    procedures; and
    An insufficient number of qualified accounting personnel,
    specifically within the external financial reporting area.    
    Hired a new Chief Financial Officer and key senior accounting
    and finance employees;
    Established weekly updates from our technical operations team to
    provide enhanced communications throughout the Company;
    Established weekly finance meetings, which include all key
    finance employees, to address significant and/or complex
    transactions;
    Established procedures to ensure that all relevant documents and
    contracts relating to business transactions are sent to the
    accounting department for thorough review to provide improved
    reporting capability;
    Formalized the monthly closing process, which includes and
    account reconciliation process for all balance sheet and income
    statement accounts and a review of reconciliations by accounting
    management; and
    Engaged a national consulting firm to assist us with complying
    with the Sarbanes-Oxley Act. We are also in the process of
    implementing an integrated accounting and financial system
    infrastructure, which we believe will allow management to report
    on, and our independent registered public accounting firm to
    attest to, our internal controls, as required by the management
    certification and auditor attestation requirements mandated by
    the Sarbanes-Oxley Act. We are performing system and process
    evaluation and are in the process of remediation and
    re-documentation of our internal control system.    Item 9B.
    Other
    information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Identification
    of Directors
    Identification
    of Executive Officers
  Form 10-K.
  Identification
    of Audit Committee and Audit Committee Financial
    Expert
   62




---



##### Table of Contents



Material
    Changes to Procedures for Recommending Directors
    Compliance
    with Section 16(a) of the Exchange Act
    Code of
    Ethics
    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Beneficial
    Ownership
    Equity
    Compensation Plan Information
    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  ORBCOMM
    EUROPE
     63




---



##### Table of Contents



SATCOM
    INTERNATIONAL GROUP PLC.
         64




---



##### Table of Contents



OHB
    TECHNOLOGY A.G.
            ORBCOMM
    ASIA LIMITED
   65




---



##### Table of Contents



and/or
  ORBCOMM
    JAPAN LIMITED
    KOREA
    ORBCOMM LIMITED
   66




---



##### Table of Contents



SISTRON
    INTERNATIONAL LLC
    SES
    GLOBAL S.A.
  Direct-to-Home
  SERIES A
    AND SERIES B PREFERRED STOCK FINANCINGS
         67




---



##### Table of Contents



REGISTRATION
    RIGHTS AGREEMENT
      Form S-3 Form S-3 Form S-3 Form S-3 Form S-3, Form S-3; Form S-3
      Item 14.
    Principal
    Accountant Fees and Services   68




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statements Schedules  (a)(1) Financial
    Statements
  page F-1.
  (a)(2) Financial
    Statement Schedules
  Schedule II- page F-1
    (a)(3) Exhibits
   69




---



##### Table of Contents



SIGNATURES      By:
    /s/  Jerome
    B. Eisenberg       Signature

Title/s/  Jerome
    B. EisenbergJerome
    B. Eisenberg

Chairman of the Board and Chief
    Executive Officer, and Director (principal executive officer)/s/  Marco
    Fuchs*Marco
    Fuchs

Director/s/  Ronald
    Gerwig*Ronald
    Gerwig

Director/s/  Timothy
    Kelleher*Timothy
    Kelleher

Director/s/  Hans
    E.W. Hoffmann*Hans
    E.W. Hoffmann

Director/s/  Gary
    H. Ritondaro*Gary
    H. Ritondaro

Director/s/  Robert
    G. CostantiniRobert
    G. Costantini

Executive Vice President and Chief
    Financial Officer
    (principal financial and accounting officer)*By:

/s/  Christian
    G. LeBrunChristian
    G. LeBrun, Attorney-in-Fact****By authority of the power of
    attorney filed as Exhibit 24 hereto.  70




---



##### Table of Contents



INDEX TO
    CONSOLIDATED FINANCIAL STATEMEMENTS
  PageReports of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets as of December 31, 2006 and 2005


F-3Consolidated
    Statements of Operations for the years ended December 31,
    2006, 2005 and 2004


F-4Consolidated
    Statements of Changes in Membership Interests and
    Stockholders Equity (Deficit) for the years ended
    December 31, 2006, 2005 and 2004


F-5Consolidated
    Statements of Cash Flows for the years ended December 31,
    2006, 2005 and 2004


F-6Notes to
    Consolidated Financial Statements


F-7Schedule II 
    Valuation and Qualifying Accounts


F-41  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
  page F-1.
      Share-Based
    Payment,
  
  
 F-2




---



##### Table of Contents



ORBCOMM
    Inc.



Consolidated
    Balance Sheets

(in
    thousands, except share data)  December 31,2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
62,139


$
68,663Marketable securities


38,850



Accounts receivable, net of
    allowances for doubtful accounts of $297 and $671 as of
    December 31, 2006 and December 31, 2005 (includes
    amounts due from related parties of $459 as of December 31,
    2006 and $543 as of December 31, 2005)


5,185



3,550Inventories


3,528



2,747Advances to contract manufacturer


177



701Prepaid expenses and other current
    assets


1,354



727Total current assets


111,233



76,388Long-term receivable 
    related party


372



472Satellite network and other
    equipment, net


29,131



7,787Intangible assets, net


7,058



4,375Other assets


299



294Total assets

$
148,093


$
89,316LIABILITIES, CONVERTIBLE
    REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS EQUITY
    (DEFICIT)Current liabilities:Accounts payable

$
3,438


$
2,330Accrued liabilities


4,915



8,198Current portion of deferred revenue


2,083



575Total current liabilities


10,436



11,103Note payable  related
    party


879



594Deferred revenue, net of current
    portion


8,066



8,052Total liabilities


19,381



19,749Commitments and
    contingenciesConvertible redeemable preferred
    stock:Series A, par value $0.001;
    15,000,000 shares authorized as of December 31, 2005;
    none and 14,053,611 shares issued and outstanding as of
    December 31, 2006 and 2005 (liquidation preference value of
    $8,027 as of December 31, 2005)






45,500Series B, par value $0.001;
    30,000,000 shares authorized as of December 31, 2005;
    none and 17,629,999 shares issued and outstanding as of
    December 31, 2006 and 2005 (liquidation preference value of
    $71,049 as of December 31, 2005)






66,721Stockholders equity
    (deficit):Common stock, par value $0.001;
    250,000,000 shares authorized as of December 31, 2006;
    36,923,715 and 5,690,017 shares issued and outstanding as
    of December 31, 2006 and 2005


37



6Additional paid-in capital


188,917



5,882Accumulated other comprehensive
    (loss) income


(395
)


90Accumulated deficit


(59,847
)


(48,632
)Total stockholders equity
    (deficit)


128,712



(42,654
)Total liabilities, convertible
    redeemable preferred stock and stockholders equity
    (deficit)

$
148,093


$
89,316    F-3




---



##### Table of Contents



ORBCOMM
    Inc.



Consolidated
    Statements of Operations

(in
    thousands, except share and per share data)  Years ended December 31,2006


2005


2004Revenues(1):Service revenues

$
11,561


$
7,804


$
6,479Product sales


12,959



7,723



4,387Total revenues


24,520



15,527



10,866Costs and
    expenses(2):Costs of services


8,714



6,223



5,884Costs of product sales


12,092



6,459



4,921Selling, general and administrative


15,731



9,344



8,646Product development


1,814



1,341



778Total cost and expenses


38,351



23,367



20,229Loss from operations


(13,831
)


(7,840
)


(9,363
)Other income
    (expense):Interest income


2,582



66



49Other income


271







Interest expense, including
    amortization of deferred debt issuance costs and debt discount
    of $31 and $722 in 2005 and 2004


(237
)


(308
)


(1,318
)Loss on extinguishment of debt






(1,016
)


(1,757
)Total other income (expense)


2,616



(1,258
)


(3,026
)Net loss

$
(11,215
)

$
(9,098
)

$
(12,389
)Net loss applicable to common
    shares (Note 5)

$
(29,646
)

$
(14,248
)

$
(14,535
)Net loss per common
    share:Basic and diluted

$
(2.80
)

$
(2.51
)

$
(2.57
)Weighted average common shares
    outstanding:Basic and diluted


10,601



5,683



5,658(1) Related party
    revenues:Service revenues

$
374


$
566


$
517Product sales

$
62


$
66


$
123(2) Stock-based
    compensation included in costs and expenses:Costs of services

$
425


$
7


$
31Costs of product sales


71







Selling, general and administrative


3,355



183



1,436Product development


94



11



49$
3,945


$
201


$
1,516    F-4




---



##### Table of Contents



ORBCOMM
    Inc.Consolidated Statements of Changes in Membership
    Interests and Stockholders Equity (Deficit)Years ended December 31, 2006, 2005 and 2004
    (in thousands, except membership interest units and share
    data)
  TotalAccumulated





membershipAdditional


other





interests andMembership interest units


Common Stock


paid-in


comprehensive


Accumulated


stockholders


ComprehensiveUnits


Amount


Shares


Amount


capital


income


deficit


equity (deficit)


lossBalances, January 1,
    2004


8,486,901


$
11,495






$



$



$



$
(27,042
)

$
(15,547
)Fair value of warrants and
    beneficial conversion rights related to convertible bridge notes






836























836Contribution of ORBCOMM LLC
    membership interest units into common stock of ORBCOMM Inc.


(8,486,901
)


(12,331
)


5,657,934



6



12,325











Warrants issued in connection with
    the sale of Series A redeemable convertible preferred stock


















606











606Issuance of Series A
    convertible redeemable preferred stock in connection with the
    acquisition of Sistron International LLC


















(362
)






(103
)


(465
)Accrued Series A preferred stock
    dividends


















(3,318
)










(3,318
)Accretion of preferred stock
    issuance costs


















(320
)










(320
)Stock-based compensation


















1,516











1,516Warrants issued in exchange for
    services rendered


















248











248Net loss


























(12,389
)


(12,389
)

$
(12,389
)Balances, December 31,
    2004










5,657,934



6



10,695







(39,534
)


(28,833
)Common stock issued










32,083







136











136Accrued Series A preferred stock
    dividends


















(4,709
)










(4,709
)Accretion of preferred stock
    issuance costs


















(441
)










(441
)Stock-based compensation


















201











201Net loss


























(9,098
)


(9,098
)

$
(9,098
)Cumulative translation adjustment






















90







90



90$
(9,008
)Balances, December 31,
    2005










5,690,017



6



5,882



90



(48,632
)


(42,654
)Accretion of preferred stock
    issuance costs


















(854
)










(854
)Series B preferred stock
    dividend


















(7,467
)










(7,467
)Initial public offering of common
    stock, net of underwriters discounts and commissions and
    offering costs










9,230,800



9



89,473











89,482Conversion of convertible
    reedemable Series A and B preferred stock into common stock










21,383,318



21



106,492











106,513Consent payment to holders of
    Series B preferred stock for the automatic conversion into
    common stock in connection with IPO


















(10,111
)










(10,111
)Exercise of warrants










619,580



1



1,557











1,558Stock-based compensation


















3,945











3,945Net loss


























(11,215
)


(11,215
)

$
(11,215
)Cumulative translation adjustment






















(485
)






(485
)


(485
)$
(11,700
)Balances, December 31,
    2006





$




36,923,715


$
37


$
188,917


$
(395
)

$
(59,847
)

$
128,712    F-5




---



##### Table of Contents



ORBCOMM
    Inc.



Consolidated
    Statements of Cash Flows

(in
    thousands)  Years ended December 31,2006


2005


2004Cash flows from operating
    activities:Net loss

$
(11,215
)

$
(9,098
)

$
(12,389
)Adjustments to reconcile net loss
    to net cash (used in) provided by operating activities:Change in allowance for doubtful
    accounts


(374
)


82



427Inventory impairments


361



115



56Depreciation and amortization


2,373



1,982



1,480Amortization of deferred debt
    issuance costs and debt discount






31



722Accretion on notes
    payable  related party


131



33



Loss on extinguishment of debt






1,016



1,757Stock-based compensation


3,945



201



1,516Warrants issued in exchange for
    services










248Changes in operating assets and
    liabilities, net of acquisitions:Accounts receivable


(1,161
)


1,014



(4,437
)Inventories


(1,964
)


(642
)


(1,528
)Advances to contract manufacturer


524



3,046



(3,572
)Prepaid expenses and other current
    assets


(95
)


(366
)


(896
)Accounts payable and accrued
    liabilities


(2,913
)


2,902



(2,612
)Deferred revenue


1,522



3,325



3,177Net cash (used in) provided by
    operating activities


(8,866
)


3,641



(16,051
)Cash flows from investing
    activities:Capital expenditures


(22,357
)


(4,066
)


(2,491
)Purchase of marketable securities


(43,850
)






Sale of marketable securities


5,000







Contingent purchase price payment
    made in connection with the acquisition of Satcom International
    Group plc.


(3,631
)






Acquisitions of businesses, net of
    cash acquired






33



2Net cash used in investing
    activities


(64,838
)


(4,033
)


(2,489
)Cash flows from financing
    activities:Payments of bank debt










(104
)Proceeds from issuance of
    Series A preferred stock net of issuance costs of $2,595










24,227Proceeds from issuance of
    Series B preferred stock net of issuance costs of $113 and
    $4,328


1,465



41,702



Proceeds from issuance of common
    stock in connection with initial public offering, net of
    underwriters discounts and commissions and offering costs
    of $11,447


90,092







Payment made to holders of
    Series B preferred stock for consent to the automatic
    conversion into common stock in connection with the initial
    public offering


(10,111
)






Proceeds from issuance of
    10% convertible bridge notes






25,019



1,250Proceeds from exercise of common
    stock warrants


1,558







Payment of Series A preferred
    stock dividends


(8,027
)






Payment of Series B preferred
    stock dividends


(7,467
)






Repayment of 10% convertible
    bridge notes










(922
)Repayment of 18% convertible
    bridge notes










(2,341
)Repayment of note payable to
    Eurovest Holdings Ltd.










(250
)Payments for deferred financing
    costs






(1,047
)


(82
)Net cash provided by financing
    activities


67,510



65,674



21,778Effect of exchange rate changes
    on cash and cash equivalents


(330
)


65



Net (decrease) increase in cash
    and cash equivalents


(6,524
)


65,347



3,238Cash and cash
    equivalents:Beginning of year


68,663



3,316



78End of year

$
62,139


$
68,663


$
3,316Supplemental cash flow
    disclosures (Note 18):Interest paid

$



$
187


$
649    F-6




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
  Note 1.
    Organization
    and Business        
    ORBCOMM issued 5,392,606 shares of Series A
    convertible redeemable voting preferred stock
    (Series A preferred stock) to new investors at
    a price of $2.84 per share, and received gross proceeds
    totaling $15,315.
    Certain note holders of ORBCOMM LLC entered into agreements to
    contribute the principal balances and accrued interest of their
    notes, totaling $10,967, to ORBCOMM in exchange for
    3,861,703 shares of Series A preferred stock at a
    price of $2.84 per share.
    Holders of warrants to purchase 2,736,997 membership interest
    units of ORBCOMM LLC, representing all of the issued and
    outstanding warrants of ORBCOMM LLC, entered into agreements to
    contribute such warrants to ORBCOMM in exchange for warrants,
    with substantially the same terms and conditions, to purchase
    1,824,665 shares of common stock of ORBCOMM. The warrants
    have exercise prices ranging from $2.33 per share to
    $4.26 per share and expire starting November 2007 through
    February 2009.
    In August 2004, ORBCOMM issued an additional
    4,051,888 shares of Series A preferred stock to new
    and existing investors at $2.84 per share, pursuant to the
    Stock Purchase Agreement and received gross proceeds of $11,507.
    In connection with the sales of the Series A preferred
    stock in February and August 2004, ORBCOMM incurred aggregate
    issuance costs of $2,595.  Note 2.
    Initial
    Public Offering   F-7




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
      Note 3.
    Summary
    of Significant Accounting Policies  Principles
    of consolidation
      Use of
    estimates
    Revenue
    recognition
  i.e.
 F-8




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
        e.g.
  Out-of-pocket
    Costs
    of revenues
   F-9




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   Foreign
    currency translation
  end-of-period
  Fair
    value of financial instruments
    Cash
    and cash equivalents
    Marketable
    securities
  available-for-sale. Available-for-sale available-for-sale
  Concentration
    of risk
           F-10




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
      Inventories
  first-in,
  Satellite
    network and other equipment
          Capitalized
    development costs
   F-11




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   Intangible
    assets
      Impairment
    of long-lived assets
    Debt
    issuance costs and debt discount
    in-the-money No. 98-5 No. 00-27. paid-in-capital
      Convertible
    redeemable preferred stock
   F-12




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   Income
    taxes
    Accounting for Income Taxes
    Loss
    contingencies
    Stock-based
    compensation
  Share-Based Payment
  Accounting for Stock-Based
    Compensation
    Accounting for Stock Issued to
    Employees
 F-13




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
  Accounting for Stock-Based
    Compensation Transition and Disclosure. No. 96-18, Accounting for Equity Instruments Issued to Other Than
    Employees for Acquiring, or in Conjunction with Selling, Goods
    or Services.
  Recent
    accounting pronouncements
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Fair Value Measurements
  Considering the Effects of Prior
    Year Misstatements When Quantifying Misstatements in Current
    Year Financial Statements
  The Fair
    Value Option for Financial Assets and Financial Liabilities
    (SFAS 159)
  Note 4.
    Stock-based
    Compensation   F-14




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
           For the Years Ended December 31,2006


2005


2004Stock options

$
651


$
201


$
1,516Restricted stock units


2,904







Stock appreciation rights


390







Total

$
3,945


$
201


$
1,516   Stock-
    based compensation  stock options granted under the
    2004 Stock Option Plan
    Years Ended December 31,2006


2005(1)


2004Risk-free interest rate


4.64
%






2.33
%Expected life (years)


4.00







3.00 to 4.00Expected volatility factor


44.50
%






61.50
%Expected dividends


None







None     (1)
    
    There were no options granted in 2005.   F-15




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
        Years EndedDecember 31,2005


2004Net loss applicable to common
    shares, as reported

$
(14,248
)

$
(14,535
)Add: Stock-based employee
    compensation determined under APB No. 25 and
    included in reported net loss


201



1,516Deduct: Employee stock-based
    compensation determined under the fair value method for all
    awards, net of related tax effects


(530
)


(2,387
)Pro forma net loss applicable to
    common shares

$
(14,577
)

$
(15,406
)Net loss per common share, basic
    and diluted:As reported

$
(2.51
)

$
(2.57
)Pro forma

$
(2.57
)

$
(2.72
)     Weighted-AverageRemaining


AggregateNumber of


Weighted-Average


Contractual


Intrinsic ValueShares


Exercise Price


Term (years)


(in thousands)Outstanding at January 1, 2006


1,461,753


$
3.06Granted (February 2006)


50,000



4.88Exercised






Forfeited or expired


(47,333
)


3.86Outstanding at December 31,
    2006


1,464,420


$
3.09



6.87


$
8,388Exercisable at December 31,
    2006


1,371,615


$
3.00



6.82


$
7,976Vested and expected to vest at
    December 31, 2006


1,449,861


$
3.08



6.87


$
8,318  F-16




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
      Weighted-Average GrantShares


Date Fair ValueBalance at January 1, 2006


252,566


$
2.10Granted


50,000



11.16Vested


(176,926
)


3.79Forfeited


(32,835
)


2.09Balance at December 31, 2006


92,805


$
4.03     2006
    LTIP
          Time-Based


Performance-BasedRSUs


RSUsOutstanding at January 1, 2006






Granted


532,880



258,044Vested






Forfeited or cancelled


(4,793
)


(560
)Unvested at December 31, 2006


528,087



257,484  F-17




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
                       F-18




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
        Note 5.
    Net Loss
    per Common Share    Years Ended December 31,2006


2005


2004Common stock warrants


1,617,296



1,917,998



1,917,998Stock options


1,464,420



1,461,707



1,476,457RSUs


785,571







SARs


182,223







Series A convertible
    preferred stock






9,369,074



8,955,741Series B convertible
    preferred stock






11,753,333Series A preferred stock
    warrants






318,928



318,9284,049,510



24,821,040



12,669,124    F-19




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
     Years Ended December 31,2006


2005


2004Net loss

$
(11,215
)

$
(9,098
)

$
(12,389
)Less: Net loss attributable to
    period prior to the Reorganization










1,492Add: Preferred stock dividends and
    accretion of preferred stock carrying value


(8,320
)


(5,150
)


(3,638
)Add: Consent payment to holders of
    Series B preferred stock for the automatic conversion of
    the Series B preferred stock into common stock. (See
    Note 12)


(10,111
)






Net loss applicable to common
    shares

$
(29,646
)

$
(14,248
)

$
(14,535
)   Note 6.
    Acquisitions  Acquisition
    of Sistron International LLC.
      Acquisition
    of interest in Satcom International Group plc.
     F-20




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
    Acquired licenses

$
4,484Other assets


171Liabilities (including note
    payable to related party of $586)


(2,386
)Acquisition cost

$
2,269       Note 7.
    Satellite
    Network and Other Equipment    Useful Life


December 31,(Years)


2006


2005Land





$
379


$
Satellite network


5-7



7,373



7,421Capitalized software


3-5



516



268Computer hardware


5



867



318Other


5-7



411



345Assets under construction






26,905



5,33136,451



13,683Less accumulated depreciation and
    amortization






(7,320
)


(5,896
)$
29,131


$
7,787        F-21




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   Note 8.
    Intangibles
    Assets    December 31,2006


2005Useful Life





Accumulated








Accumulated(Years)


Cost


Amortization


Net


Cost


Amortization


NetAcquired licenses


6


$
8,115


$
(1,057
)

$
7,058


$
4,484


$
(187
)

$
4,297Intellectual property


3



715



(715
)






715



(637
)


78$
8,830


$
(1,772
)

$
7,058


$
5,199


$
(824
)

$
4,375       Years Ending December 31,2007

$
1,4862008


1,4862009


1,4862010


1,4862011


1,114$
7,058   Note 9.
    Accrued
    Liabilities    December 31,2006


2005Accrued Series B preferred
    stock issuance costs

$



$
2,911Gateway settlement obligation (see
    Note 16)


945



1,645Accrued compensation and benefits


2,094



960Payroll taxes and withholdings,
    interest and penalties






117Accrued warranty obligations


45



236Accrued interest


622



560Accrued professional services


361



596Other accrued expenses


848



1,173$
4,915


$
8,198  F-22




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
    December 31,2006


2005Balance at January 1

$
236


$
493Payments


(210
)


(584
)Accruals for obligations


19



327Balance at December 31

$
45


$
236   Note 10.
    Deferred
    Revenue    December 312006


2005Professional services

$
7,236


$
6,674Service activation fees


1,326



1,040Manufacturing license fees


89



105Prepaid services


1,498



80810,149



8,627Less current portion


(2,083
)


(575
)Long-term portion

$
8,066


$
8,052      F-23




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   Note 11.
    Notes Payable  OHB
    Technology A.G.
    2005
    bridge notes
    10% convertible
    bridge notes
      18% convertible
    bridge notes issued to investors and related
    parties
   F-24




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
    12% convertible
    bridge note
      Conversion
    of notes
    Interest
    expense and amortization
    Interest Expense


Amortization of Debt


Amortization of Debtfor the Years


Issuance Costs for the


Discount for the YearsEnded December 31,


Years Ended December 31,


Ended December 31,2006


2005


2004


2006


2005


2004


2006


2005


2004Series C Notes

$



$



$
9


$



$



$
2


$



$



$
1518% Notes










253











246











45912% Notes










38























Eurovest loan










200























2005 Bridge Notes






187











31















Payroll taxes










53























OHB Technology A.G


131



33



























Other


106



57



43























$
237


$
277


$
596


$



$
31


$
248


$



$



$
474  F-25




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
  Note 12.
    Stockholders
    Equity and Convertible Redeemable Preferred Stock  Reverse
    stock split
  2-for-3
  Initial
    Public Offering
      Convertible
    Redeemable Preferred Stock
   F-26




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
    Series A


Series BPreferred Stock


Preferred StockDecember 31,


December 31,2006


2005


2006


2005Redemption value

$



$
39,912


$



$
71,049Accrued dividends






8,027







Issuance costs, net of accretion






(2,439
)






(4,328
)Carrying value

$



$
45,500


$



$
66,721       Dividends
    Conversion
         F-27




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   Voting
    rights
    Liquidation
    preference
    Redemption
  and/or
  Series B
    Commitment
    Common
    Stock
    Voting
    rights
    Dividends
    Warrants
   F-28




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
      Shares SubjectExercise Price

to Warrants$2.33


1,040,452$2.78


23,332$3.38


143,607$4.26


409,9051,617,296       SharesEmployee stock compensation plans


6,122,627Warrants to purchase common stock


1,617,2967,739,923     Note 13.
    Geographical
    Information    Years EndedDecember 31,2006


2005


2004United States


90
%


74
%


75
%Central Asia(1)






14
%


Other(2)


10
%


12
%


25
%100
%


100
%


100
%     (1)
    
    Represents a gateway earth station sale.(2)
    
    No other geographic areas are more than 10% for the years ended
    December 31, 2006, 2005 and 2004. F-29




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   Note 14.
    Income
    Taxes    December 31,2006


2005


2004Current:Federal

$



$



$
State










Total

$



$



$
Deferred:Federal

$
(4,635
)

$
(2,512
)

$
(2,012
)State


(604
)


(160
)


(377
)International


(51
)






Subtotal


(5,290
)


(2,672
)


(2,389
)Valuation allowance


5,290



2,672



2,389Total

$



$



$
     December 31,2006


2005Current deferred tax assets:Deferred revenues

$
3,706


$
3,271Allowance for doubtful accounts


216



332Inventory reserves


155



61Deferred compensation


1,546



216Bonus accruals


274Warranty


17Vacation accrual


210



146Gross deferred tax assets


6,124



4,026Less valuation allowance


(6,124
)


(4,026
)Net current deferred tax asset

$



$
Non-current deferred tax assets:Satellite network and other
    property

$
241



127Tax loss carryforwards


7,859



4,631Gross deferred tax assets


8,100



4,758Less valuation allowance


(8,100
)


(4,758
)Net non-current deferred tax asset

$



$
  F-30




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
    Years EndedDecember 31,2006


2005


2004Income tax benefit at
    U.S. statutory rate of 34%

$
(3,813
)

$
(3,093
)

$
(4,212
)State income taxes, net of federal
    benefit


(392
)


(279
)


(256
)Effect of foreign subsidiaries


(1,251
)


669



443Pre-reorganization LLC loss










1,591Other permanent items


166



31



45Change in valuation allowance


5,290



2,672



2,389$



$



$
           Note 15.
    Related
    Party Transactions    Revenues for the Years


Receivables atEnded December 31,


December 31,2006


2005


2004


2006


2005ORBCOMM Europe LLC(1)

$



$
191


$
270


$



$
ORBCOMM Asia Limited(2)


















9ORBCOMM Japan Limited


327



299



259



343



385Korea ORBCOMM Limited


109



134



109



116



149Satcom International Group plc.(1)






8



2







$
436


$
632


$
640


$
459


$
543     (1)
    
    In 2006, no revenue was generated from Satcom because the
    Company acquired Satcom on October 7, 2005. (see
    Satcom Reorganization and Acquisition below). F-31




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   (2)
    
    Receivables from ORBCOMM Asia Limited relate to reimbursements
    of storage costs for gateway earth stations owned by ORBCOMM
    Asia Limited that are warehoused by the Company.  ORBCOMM
    Europe
        ORBCOMM
    Asia Limited
   F-32




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
  and/or
  ORBCOMM
    Japan Limited
    Korea
    ORBCOMM Limited
   F-33




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
    Satcom
    International Group plc.
  General.
    Satcom Transaction.
  Satcom Reorganization and Acquisition.
   F-34




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   OHB
    Technology A.G.
    SES.
  Direct-to-Home
  Note 16.
    Commitments
    and Contingencies  Procurement
    agreements in connection with U.S. Coast Guard
    contract
        Gateway
    settlement obligation
   F-35




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   Procurement
    agreements in connection with quick-launch
    satellites
      Operating
    leases
    Years Ending December 31,2007

$
9952008


7302009


128$
1,853     Litigation
  Quake.
 F-36




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
             F-37




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
   and/or Complaint-In-Intervention Complaint-In-Intervention
  ORBCOMM Asia.
      Note 17.
    Employee
    Incentive Plans   F-38




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
    Note 18.
    Supplemental
    Disclosure of Cash Flow Noncash Investing and Financing
    Activities  Years Ended December 31,2006


2005


2004Investing activities:Issuance of Series A
    preferred stock in connection with the acquisition of Sistron

$



$



$
465Gateway received in consideration
    for payment for accounts receivable






157



730Gateway acquired and recorded in
    inventory in 2005 and used for construction under satellite and
    property and equipment in 2006


411Issuance of Series A
    preferred stock in connection with the acquisition of Satcom






1,761



Financing activities:Conversion of notes payable and
    accrued interest for Series A preferred stock










10,967Conversion of notes payable for
    Series B preferred stock






25,019



Debt discount attributable to
    issued warrants and beneficial conversion rights in connection
    with 12% convertible bridge notes










426Debt discount attributable to
    issued warrants and beneficial conversion rights in connection
    with 10% convertible bridge notes










354Deferred financing costs
    attributable to issued warrants and beneficial conversion rights
    in connection with 10% convertible bridge notes










56Warrants issued in connection with
    Series A preferred stock issuance










606Warrants issued in exchange for
    services rendered










248Preferred stock dividends accrued






4,709



3,318Conversion of Series A
    preferred stock into common stock


37,882







Conversion of Series B
    preferred stock into common stock


68,629







  F-39




---



##### Table of Contents



Notes to
    consolidated financial statements
    (In thousands, except share, unit, per share and per unit
    amounts)
  Note 19.
    Quarterly
    Financial Data (Unaudited)    First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter2006Revenues

$
6,380


$
6,261


$
5,554


$
6,325Loss from operations


(3,579
)


(2,866
)


(2,458
)


(4,928
)Net loss


(3,141
)


(2,250
)


(1,867
)


(3,957
)Net loss applicable to common
    shares


(5,448
)


(4,806
)


(4,305
)


(15,087
)Net loss per common share, Basic
    and diluted


(0.96
)


(0.84
)


(0.71
)


(0.61
)Weighted average common shares
    outstanding


5,690,017



5,690,017



6,085,376



24,779,0072005Revenues

$
2,751


$
3,657


$
3,665


$
5,454Loss from operations


(1,642
)


(2,126
)


(2,104
)


(1,968
)Net loss


(1,633
)


(2,111
)


(2,099
)


(3,255
)Net loss applicable to common
    shares


(2,895
)


(3,418
)


(3,361
)


(4,574
)Net loss per common share, Basic
    and diluted


(0.51
)


(0.60
)


(0.59
)


(0.81
)Weighted average common shares
    outstanding


5,658,655



5,690,017



5,690,017



5,690,017  F-40




---



##### Table of Contents



Schedule II 
    Valuation and Qualifying Accounts  ORBCOMM Inc.
 December 31, 2006, 2005 and 2004
  Col. A

Col. B


Col. C


Col. D


Col. EBalance at


Charged to


Charged to





Balance atBeginning of


Costs and


Other





End of theDescription

the Period


Expenses


Accounts


Deductions


Period(Amounts in thousands)Year ended December 31,
    2006Allowance for doubtful receivables

$
671



30



(404
)





$
297Deferred tax asset valuation
    allowance

$
8,784



5,290



150






$
14,224Year ended December 31,
    2005Allowance for doubtful receivables

$
564



291



(184
)





$
671Deferred tax asset valuation
    allowance

$
4,701



4,083










$
8,784Year ended December 31,
    2004Allowance for doubtful receivables

$
137



1,280



(853
)





$
564Deferred tax asset valuation
    allowance

$




4,701










$
4,701  F-41




---



##### Table of Contents



Exhibit Index
  ExhibitNo.

Description

Page No.3
.1

Restated Certificate of
    Incorporation of the Company.3
.2

Amended Bylaws of the Company.10
.1

Validation Services Agreement,
    dated May 20, 2004, between the Company and the United
    States Coast Guard, filed as Exhibit 10.1 to the
    Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.2.1

Cooperation Agreement, dated
    May 18, 2004, among the Company, Stellar Satellite
    Communications Ltd. and Delphi Corporation, filed as
    Exhibit 10.2.1 to the Companys Registration Statement
    on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.2.2

Amendment Number One to
    Cooperation Agreement, dated December 27, 2005, among the
    Company, Stellar Satellite Communications Ltd. and Delphi
    Corporation, filed as Exhibit 10.2.2 to the Companys
    Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.2.3

Pricing Letter Agreement, dated
    May 6, 2004, between the Company and Delphi Corporation,
    filed as Exhibit 10.2.3 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.3.1

ORBCOMM Concept Demonstration
    Satellite Bus, Integration Test and Launch Services Procurement
    Agreement, dated March 10, 2005, between the Company and
    OHB-System AG, filed as Exhibit 10.3.1 to the
    Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.3.2

Amendment to the Procurement
    Agreement, dated June 5, 2006, between the Company and
    OHB-System AG, filed as Exhibit 10.3.2 to the
    Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.4

ORBCOMM Concept Demonstration
    Communication Payload Procurement Agreement, dated
    November 3, 2004, between the Company and Orbital Sciences
    Corporation, filed as Exhibit 10.4 to the Companys
    Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.5

Amendment to the Procurement
    Agreement, dated April 21, 2006, between the Company and
    Orbital Sciences Corporation, filed as Exhibit 10.5 to the
    Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.6

Second Amended and Restated
    Registration Rights Agreement, dated as of December 30,
    2005, by and among the Company and certain preferred
    stockholders of the Company, filed as Exhibit 10.6 to the
    Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.7.1

International Value Added Reseller
    Agreement, dated March 14, 2003, between the Company and
    Transport International Pool, filed as Exhibit 10.9.1 to
    the Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.7.2

Amendment to International Value
    Added Reseller Agreement, dated January 26, 2006, between
    the Company and Transport International Pool, filed as
    Exhibit 10.9.2 to the Companys Registration Statement
    on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.7.3

Assignment and Assumption
    Agreement, dated February 28, 2006, between ORBCOMM LLC,
    Transport International Pool and GE Asset Intelligence, LLC,
    filed as Exhibit 10.9.3 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.7.4

Amendment to International Value
    Added Reseller Agreement dated July 11, 2006 between
    ORBCOMM LLC and GE Asset Intelligence, filed as
    Exhibit 10.9.4 to the Companys Registration Statement
    on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.




---



##### Table of Contents



ExhibitNo.

Description

Page No.10
.7.5

Amendment to International Value
    Added Resellers Agreement, dated August 3, 2006, between
    ORBCOMM LLC and GE Asset Intelligence, LLC, filed as
    Exhibit 10.9.5 to the Companys Registration Statement
    on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.8

Form of Common Stock Warrants,
    filed as Exhibit 10.10 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.9

Form of Series A Preferred
    Stock Warrants, filed as Exhibit 10.11 to the
    Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.10

Form of Ridgewood Preferred Stock
    Warrants, filed as Exhibit 10.12 to the Companys
    Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.11

Form of Indemnification Agreement
    between the Company and the executive officers and directors of
    the Company, filed as Exhibit 10.13 to the Companys
    Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.12

Schedule identifying agreements
    substantially identical to the Form of Indemnification Agreement
    constituting Exhibit 10.11 hereto, filed as
    Exhibit 10.14 to the Companys Registration Statement
    on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.13

2004 Stock Option Plan, filed as
    Exhibit 10.15 to the Companys Registration Statement
    on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.14

2006 Long-Term Incentives Plan,
    filed as Exhibit 10.16 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.15

Form of Incentive Stock Option
    Agreement under the 2004 Stock Option Plan, filed as
    Exhibit 10.17 to the Companys Registration Statement
    on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference, filed as Exhibit 10.17
    to the Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.16

Form of Non Statutory Stock Option
    Agreement under the 2004 Stock Option Plan, filed as
    Exhibit 10.18 to the Companys Registration Statement
    on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.17

Employment Agreement, effective as
    of June 1, 2006, between Jerome B. Eisenberg and the
    Company, filed as Exhibit 10.19 to the Companys
    Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.18

Employment Agreement, effective as
    of June 1, 2006, between Marc Eisenberg and the Company,
    filed as Exhibit 10.20 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.19.1

Employment Agreement, dated as of
    May 5, 2006, between John P. Brady and the Company, filed
    as Exhibit 10.21.1 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.19.2

Amendment to Stock Option
    Agreement, dated as of May 5, 2006, between John P. Brady
    and the Company, filed as Exhibit 10.21.2 to the
    Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.19.3

Retention and Separation
    Agreement, effective as of October 11, 2006, between John
    P. Brady and the Company, filed as Exhibit 10.21.3 to the
    Companys Registration. Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.20

Employment Agreement, effective as
    of June 1, 2006, between John J. Stolte, Jr. and the
    Company, filed as Exhibit 10.22 to the Companys
    Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.21

Employment Agreement, effective as
    of August 2, 2004, between Emmett Hume and the Company,
    filed as Exhibit 10.23 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.




---



##### Table of Contents



ExhibitNo.

Description

Page No.*10
.22

Form of Restricted Stock Unit
    Award Agreement under the 2006 Long-Term Incentives Plan, filed
    as Exhibit 10.24 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.23

Form of Stock Appreciation Rights
    Award Agreement under the 2006 Long-Term Incentives Plan, filed
    as Exhibit 10.25 to the Companys Registration
    Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.*10
.24

Employment Agreement, effective as
    of October 1, 2006, between Robert G. Costantini and the
    Company, filed as Exhibit 10.26 to the Companys
    Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.10
.25

Letter agreement, dated
    October 10, 2006, between Stellar Satellite Communications
    Ltd. and GE Asset Intelligence, LLC, filed as Exhibit 10.27
    to the Companys Registration Statement on
    Form S-1
    (Registration
    No. 333-134088),
    is incorporated herein by reference.16


Letter of J.H. Cohn LLP regarding
    change in certifying accountant.21


Subsidiaries of the Company.23
.1

Consent of Deloitte &
    Touche LLP, an independent registered public accounting firm.24


Power of Attorney authorizing
    certain persons to sign this Annual Report on behalf of certain
    directors and executive officers of the Company.31
.1

Certification of the Chairman of
    the Board and Chief Executive Officer.31
.2

Certification of the Executive
    Vice President and Chief Financial Officer.32
.1

Certification of the Chairman of
    the Board and Chief Executive Officer pursuant to Section 906 of
    the Sarbanes-Oxley Act.32
.2

Certification of the Executive
    Vice President and Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act.     *
    
    Management contract or compensatory plan or arrangement.
    
    Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment. The omitted portions have been
    separately filed with the Securities and Exchange Commission.