##### Table of Contents



United States Securities and Exchange Commission
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 001-33118
 ORBCOMM INC.
  Delaware
    
    41-2118289(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)
 
 
 
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



ORBCOMM Inc.
Index
 Part I  Financial InformationItem 1. Condensed Consolidated Financial Statements (Unaudited):Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Operations
    
    
    4Condensed Consolidated Statements of Cash Flows
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures about Market Risks
    
    
    29Item 4. Controls and Procedures
    
    
    29Part II  Other InformationItem 1. Legal Proceedings
    
    
    29Item 1A. Risk Factors
    
    
    29Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3. Defaults Upon Senior Securities
    
    
    30Item 4. Submission of Matters to a Vote of Security Holders
    
    
    30Item 5. Other Information
    
    
    30Item 6. Exhibits
    
    
    30Signatures
    
    
    31Exhibit Index
    
    
    31Exhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 10.4Exhibit 10.5Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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ORBCOMM Inc.
 
 Condensed Consolidated Balance Sheets
 (in thousands, except share data)
 (Unaudited)
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    88,471
    
    
    $
    115,587Accounts receivable, net of allowances for doubtful
accounts of $228 and $388
    
    
    3,898
    
    
    
    5,284Inventories
    
    
    1,775
    
    
    
    2,722Advances to contract manufacturers
    
    
    158
    
    
    
    158Prepaid expenses and other current assets
    
    
    1,336
    
    
    
    1,078Total current assets
    
    
    95,638
    
    
    
    124,829Long-term receivable
    
    
    
    
    
    
    542Satellite network and other equipment, net
    
    
    86,345
    
    
    
    49,704Intangible assets, net
    
    
    4,457
    
    
    
    5,572Restricted cash
    
    
    5,680
    
    
    
    Inventories
    
    
    1,900
    
    
    
    Other assets
    
    
    1,455
    
    
    
    992Deferred tax assets
    
    
    184
    
    
    
    184Total assets
    
    $
    195,659
    
    
    $
    181,823LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    3,522
    
    
    $
    4,373Accrued liabilities
    
    
    16,843
    
    
    
    12,305Current portion of deferred revenue
    
    
    3,320
    
    
    
    1,435Total current liabilities
    
    
    23,685
    
    
    
    18,113Note payable  related party
    
    
    1,251
    
    
    
    1,170Deferred revenue, net of current portion
    
    
    7,790
    
    
    
    1,507Other liability
    
    
    184
    
    
    
    184Total liabilities
    
    
    32,910
    
    
    
    20,974Minority interest
    
    
    1,205
    
    
    
    Commitments and contingenciesStockholders equity:Common stock, par value $0.001; 250,000,000 shares
authorized;
42,091,318 and 41,658,066 shares issued and outstanding
    
    
    42
    
    
    
    42Additional paid-in capital
    
    
    227,979
    
    
    
    224,899Accumulated other comprehensive loss
    
    
    (527
    )
    
    
    (656
    )Accumulated deficit
    
    
    (65,950
    )
    
    
    (63,436
    )Total stockholders equity
    
    
    161,544
    
    
    
    160,849Total liabilities and stockholders equity
    
    $
    195,659
    
    
    $
    181,823
 See notes to condensed consolidated financial statements.
  3




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ORBCOMM Inc.
 
 Condensed Consolidated Statements of Operations
 (in thousands, except per share data)
 (Unaudited)
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:Service revenues
    
    $
    6,336
    
    
    $
    4,551
    
    
    $
    16,948
    
    
    $
    12,718Product sales
    
    
    1,633
    
    
    
    2,361
    
    
    
    4,624
    
    
    
    6,782Total revenues
    
    
    7,969
    
    
    
    6,912
    
    
    
    21,572
    
    
    
    19,500Costs and expenses(1):Costs of services
    
    
    2,624
    
    
    
    1,989
    
    
    
    6,786
    
    
    
    6,308Costs of product sales
    
    
    1,557
    
    
    
    2,446
    
    
    
    4,551
    
    
    
    7,084Selling, general and administrative
    
    
    4,586
    
    
    
    4,238
    
    
    
    14,205
    
    
    
    14,034Product development
    
    
    207
    
    
    
    217
    
    
    
    669
    
    
    
    834Gain on customer claims settlements
    
    
    (125
    )
    
    
    
    
    
    
    (1,368
    )
    
    
    Total costs and expenses
    
    
    8,849
    
    
    
    8,890
    
    
    
    24,843
    
    
    
    28,260Loss from operations
    
    
    (880
    )
    
    
    (1,978
    )
    
    
    (3,271
    )
    
    
    (8,760
    )Other income (expense):Interest income
    
    
    375
    
    
    
    1,600
    
    
    
    1,497
    
    
    
    4,218Other income (expense)
    
    
    (259
    )
    
    
    8
    
    
    
    (236
    )
    
    
    41Interest expense
    
    
    (48
    )
    
    
    (52
    )
    
    
    (146
    )
    
    
    (157
    )Total other income
    
    
    68
    
    
    
    1,556
    
    
    
    1,115
    
    
    
    4,102Loss before pre-control earnings of consolidated
subsidiary and minority interest
    
    
    (812
    )
    
    
    (422
    )
    
    
    (2,156
    )
    
    
    (4,658
    )Pre-control earnings of consolidated subsidiary
    
    
    
    
    
    
    
    
    
    
    (128
    )
    
    
    Minority interest
    
    
    (189
    )
    
    
    
    
    
    
    (230
    )
    
    
    Net loss
    
    $
    (1,001
    )
    
    $
    (422
    )
    
    $
    (2,514
    )
    
    $
    (4,658
    )Net loss per common share:Basic and diluted
    
    $
    (0.02
    )
    
    $
    (0.01
    )
    
    $
    (0.06
    )
    
    $
    (0.12
    )Weighted average common shares outstanding:Basic and diluted
    
    
    42,070
    
    
    
    41,444
    
    
    
    41,945
    
    
    
    39,066(1) Stock-based compensation included in costs
and expenses:Costs of services
    
    $
    22
    
    
    $
    65
    
    
    $
    71
    
    
    $
    375Costs of product sales
    
    
    7
    
    
    
    29
    
    
    
    48
    
    
    
    116Selling, general and administrative
    
    
    852
    
    
    
    791
    
    
    
    2,557
    
    
    
    3,333Product development
    
    
    12
    
    
    
    (10
    )
    
    
    42
    
    
    
    62$
    893
    
    
    $
    875
    
    
    $
    2,718
    
    
    $
    3,886
 See notes to condensed consolidated financial statements.
  4




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ORBCOMM Inc.
 
 Condensed Consolidated Statements of Cash Flows
 (in thousands)
 (Unaudited)
 Nine months endedSeptember 30,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (2,514
    )
    
    $
    (4,658
    )Adjustments to reconcile net loss to net cash provided by
operating activities:Change in allowance for doubtful accounts
    
    
    (160
    )
    
    
    133Depreciation and amortization
    
    
    2,203
    
    
    
    1,757Accretion on note payable  related party
    
    
    98
    
    
    
    98Stock-based compensation
    
    
    2,718
    
    
    
    3,886Foreign
exchange losses
    
    
    243
    
    
    
    Pre-control earnings of consolidated subsidiary and minority interest
    
    
    358
    
    
    
    Non cash portion of gain on customer claims settlement
    
    
    (882
    )
    
    
    Expiration of gateway purchase option
    
    
    (325
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    2,451
    
    
    
    289Inventories
    
    
    (632
    )
    
    
    35Advances to contract manufacturers
    
    
    366
    
    
    
    19Prepaid expenses and other current assets
    
    
    (219
    )
    
    
    365Accounts payable and accrued liabilities
    
    
    (78
    )
    
    
    515Deferred revenue
    
    
    924
    
    
    
    318Net cash provided by operating activities
    
    
    4,551
    
    
    
    2,757Cash flows from investing activities:Capital expenditures
    
    
    (26,747
    )
    
    
    (15,417
    )Purchases of marketable securities
    
    
    
    
    
    
    (57,325
    )Sales of marketable securities
    
    
    
    
    
    
    87,025Change in restricted cash
    
    
    (5,680
    )
    
    
    Cash
acquired in step acquisition of subsidiary
    
    
    366
    
    
    
    Net cash provided by (used in) investing activities
    
    
    (32,061
    )
    
    
    14,283Cash flows from financing activities:Proceeds from issuance of common stock in connection with secondary
public offering, net of underwriters discounts and commissions and
offering costs of $2,523
    
    
    
    
    
    
    31,804Proceeds from exercise of warrants and options
    
    
    322
    
    
    
    397Payment of offering costs in connection with initial public offering
    
    
    
    
    
    
    (609
    )Payment of offering costs in connection with secondary public offering
    
    
    (40
    )
    
    
    Net cash provided by financing activities
    
    
    282
    
    
    
    31,592Effect of exchange rate changes on cash and cash equivalents
    
    
    112
    
    
    
    (76
    )Net increase (decrease) in cash and cash equivalents
    
    
    (27,116
    )
    
    
    48,556Cash and cash equivalents:Beginning of period
    
    
    115,587
    
    
    
    62,139End of period
    
    $
    88,471
    
    
    $
    110,695Supplemental cash flow disclosures:Non cash investing activities:Capital expenditures incurred not yet paid
    
    $
    12,562
    
    
    $
    2,692Stock-based compensation included in capital expenditures
    
    $
    40
    
    
    $
    Net assets from step acquisition of subsidiary
    
    $
    1,363
    
    
    $
    Asset basis adjustment due to expiration of gateway purchase option
    
    $
    161
    
    
    $
    Gateway
received in settlement of long-term receivable
    
    $
    230
    
    
    $
    Non cash financing activities Secondary public offering expenses incurred not yet paid
    
    $
    
    
    
    $
    834
 See notes to condensed consolidated financial statements.
  5




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1. Business
  2. Basis of Presentation
       6




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##### Table of Contents



Concentration of credit risk
   Inventories
    Income taxes
    Recent accounting pronouncements
 Fair Value Measurements non-financial
 The Fair Value Option for Financial Assets and
Financial Liabilities
  7




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Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Business Combinations
 , Disclosures about Derivative Instruments and
Hedging Activities an Amendment of FASB Statement No. 133 Disclosure About Fair Value
of Financial Instruments
 The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly
in Conformity With Generally Accepted Accounting Principles
 3. ORBCOMM Japan
      8




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Consolidated Financial Statements ).
  4. Comprehensive Loss
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    

September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net loss
    
    $
    (1,001
    )
    
    $
    (422
    )
    
    $
    (2,514
    )
    
    $
    (4,658
    )Foreign currency
translation
adjustment
    
    
    280
    
    
    
    (95
    )
    
    
    129
    
    
    
    (163
    )Comprehensive loss
    
    $
    (721
    )
    
    $
    (517
    )
    
    $
    (2,385
    )
    
    $
    (4,821
    )
 5. Stock-based Compensation
    9




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Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Stock options
    
    $
    24
    
    
    $
    93
    
    
    $
    72
    
    
    $
    207Restricted stock units
    
    
    601
    
    
    
    705
    
    
    
    2,017
    
    
    
    3,128Stock appreciation
rights
    
    
    268
    
    
    
    77
    
    
    
    629
    
    
    
    551Total
    
    $
    893
    
    
    $
    875
    
    
    $
    2,718
    
    
    $
    3,886
  Time-Based Restricted Stock Units
   Weighted-Average GrantShares
    
    
    Date Fair ValueBalance at January 1, 2008
    
    
    356,538
    
    
    $
    11.20Granted
    
    
    169,551
    
    
    
    5.81Vested
    
    
    (185,008
    )
    
    
    11.09Forfeited or expired
    
    
    (219
    )
    
    
    9.58Balance at September 30, 2008
    
    
    340,862
    
    
    $
    8.58
   10




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Performance-Based Restricted Stock Units
   Weighted-Average GrantShares
    
    

Date Fair ValueBalance at January 1, 2008
    
    
    179,404
    
    
    $
    12.58Granted
    
    
    129,784
    
    
    
    4.81Vested
    
    
    (61,079
    )
    
    
    12.85Forfeited or expired
    
    
    (110,980
    )
    
    
    12.46Balance at September 30, 2008
    
    
    137,129
    
    
    $
    5.20
   Time-Based Stock Appreciation Rights
   Weighted-AverageRemaining
    
    
    AggregateNumber of
    
    
    Weighted-Average
    
    
    Contractual
    
    
    Intrinsic ValueShares
    
    
    Exercise Price
    
    
    Term (years)
    
    
    (In thousands)Outstanding at
January 1, 2008
    
    
    66,667
    
    
    $
    11.00Granted
    
    
    1,075,000
    
    
    
    4.96Forfeited or expired
    
    
    
    
    
    
    Outstanding at
September 30, 2008
    
    
    1,141,667
    
    
    $
    5.31
    
    
    
    9.41
    
    
    $
    Exercisable at
September 30, 2008
    
    
    44,444
    
    
    $
    11.00
    
    
    
    8.00
    
    
    $
    Vested and expected
to vest at
September 30, 2008
    
    
    1,141,667
    
    
    $
    5.31
    
    
    
    9.41
    
    
    $
    
   11




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Performance-Based Stock Appreciation Rights
   Weighted-AverageRemaining
    
    
    AggregateNumber of
    
    
    Weighted-Average
    
    
    Contractual
    
    
    Intrinsic ValueShares
    
    
    Exercise Price
    
    
    Term (years)
    
    
    (In thousands)Outstanding at
January 1, 2008
    
    
    217,289
    
    
    $
    11.00Granted
    
    
    130,555
    
    
    
    10.43Forfeited or expired
    
    
    (70,945
    )
    
    
    11.00Outstanding at
September 30, 2008
    
    
    276,899
    
    
    $
    10.73
    
    
    
    8.76
    
    
    $
    Exercisable at
September 30, 2008
    
    
    146,344
    
    
    $
    11.00
    
    
    
    8.13
    
    
    $
    Vested and expected
to vest at
September 30, 2008
    
    
    242,760
    
    
    $
    11.00
    
    
    
    8.66
    
    
    $
    
    Nine months endedSeptember 30,2008
    
    
    2007Risk-free interest rate
    
    2.50% to 3.20%
    
    
    
    4.93%Expected life (years)
    
    
    5.50 and 6.00
    
    
    
    5.50Estimated volatility factor
    
    
    43.98% and 46.08%
    
    
    
    43.93%Expected dividends
    
    None
    
    
    None
  12




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2004 Stock Option Plan
  Weighted-AverageRemaining
    
    
    AggregateNumber of
    
    
    Weighted-Average
    
    
    Contractual
    
    
    Intrinsic ValueShares
    
    
    Exercise Price
    
    
    Term (years)
    
    
    (In thousands)Outstanding at January 1, 2008
    
    
    832,957
    
    
    $
    3.02Granted
    
    
    
    
    
    
    Exercised
    
    
    (50,878
    )
    
    
    3.73Forfeited or expired
    
    
    
    
    
    
    Outstanding at September 30,
2008
    
    
    782,079
    
    
    $
    2.98
    
    
    
    5.40
    
    
    $
    1,526Exercisable at September 30,
2008
    
    
    777,911
    
    
    $
    2.97
    
    
    
    5.40
    
    
    $
    1,526Vested and expected to vest at
September 30, 2008
    
    
    782,079
    
    
    $
    2.98
    
    
    
    5.40
    
    
    $
    1,526
   6. Net Loss per Common Share
   Nine months endedSeptember 30,2008
    
    
    2007Common stock warrants
    
    
    285,410
    
    
    
    712,500Stock options
    
    
    782,079
    
    
    
    850,790RSUs
    
    
    477,991
    
    
    
    550,858SARs
    
    
    1,418,566
    
    
    
    283,9562,964,046
    
    
    
    2,398,104
 7. Satellite Network and Other Equipment
  Useful life
    
    
    September 30,
    
    
    December 31,(years)
    
    
    2008
    
    
    2007Land
    
    
    
    
    
    $
    381
    
    
    $
    381Satellite network
    
    
    5-10
    
    
    
    19,080
    
    
    
    9,463Capitalized software
    
    
    3-5
    
    
    
    1,148
    
    
    
    887Computer hardware
    
    
    5
    
    
    
    1,019
    
    
    
    920Other
    
    
    5-7
    
    
    
    804
    
    
    
    565Assets under construction
    
    
    
    
    
    
    73,219
    
    
    
    45,70695,651
    
    
    
    57,922Less: accumulated depreciation and amortization
    
    
    
    
    
    
    (9,306
    )
    
    
    (8,218
    )$
    86,345
    
    
    $
    49,704
  13




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##### Table of Contents



internal-use
 OHB-System
 On June 19, 2008, the Coast Guard demonstration satellite and five quick-launch satellites were successfully launched.
Each of the satellites successfully separated from the launch vehicle in the proper orbit and is undergoing in-orbit
testing and positioning. The majority of in-orbit testing of the payload subsystems has been completed to verify proper
operation of the subscriber links, gateway links and AIS payload functionality. All satellites are providing AIS data
and three satellites are assisting with the regular messaging service as in-orbit testing is completed. As a result of
on-going in-orbit testing of these satellites, the Companys satellite providers are investigating the lower than
nominal gateway transmission power on one satellite and outages to the reaction wheel components of the attitude
control system on each of the satellites. One of the new satellites has experienced an unrecovered outage to both a
redundant and a non-redundant reaction wheel which could reduce its communication capabilities. In addition, two of
the new satellites have experienced outages to redundant reaction wheels that remain unrecovered. Software has been
developed by the bus manufacturer and uploaded to five of the satellites to mitigate the effect of any future reaction
wheel outages. One satellite that received this software patch has experienced an additional outage to its remaining
redundant reaction wheel that remains unrecovered. While the satellite bus provider has informed the Company that they
expect to be able to resolve or develop operational procedures to satisfactorily mitigate the affect of these
anomalies, there can be no assurance in this regard. The Company is unable to quantify the impact, if any, that these
anomalies will have on the expected useful life and communication capabilities of the satellites until the in-orbit
testing is completed and more information about the root cause of the anomalies becomes available.   8. Restricted Cash
     14




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9. Intangible Assets
  September 30, 2008
    
    
    December 31, 2007Useful life
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    Accumulated(years)
    
    
    Cost
    
    
    amortization
    
    
    Net
    
    
    Cost
    
    
    amortization
    
    
    NetAcquired licenses
    
    
    6
    
    
    $
    8,115
    
    
    $
    (3,658
    )
    
    $
    4,457
    
    
    $
    8,115
    
    
    $
    (2,543
    )
    
    $
    5,572
   Years ending December 31,Remainder of 2008
    
    $
    3712009
    
    
    1,4862010
    
    
    1,4862011
    
    
    1,114$
    4,457
 10. Accrued Liabilities
  September 30,
    
    
    December 31,2008
    
    
    2007Advances from USCG (See Notes 11 and 15)
    
    $
    
    
    
    $
    7,228Gateway settlement obligation (See Note 15)
    
    
    
    
    
    
    644Accrued compensation and benefits
    
    
    2,197
    
    
    
    1,821Accrued interest
    
    
    725
    
    
    
    712Accrued professional services
    
    
    625
    
    
    
    425Accrued satellite network and other equipment (including milestone payments
for satellites)
    
    
    11,903
    
    
    
    Other accrued expenses
    
    
    1,393
    
    
    
    1,475$
    16,843
    
    
    $
    12,305
  15




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##### Table of Contents



11. Deferred Revenues
  September 30,
    
    
    December 31,2008
    
    
    2007Professional services
    
    $
    7,146
    
    
    $
    Service activation fees
    
    
    2,853
    
    
    
    1,796Manufacturing license fees
    
    
    63
    
    
    
    75Prepaid services
    
    
    1,048
    
    
    
    1,07111,110
    
    
    
    2,942Less current portion
    
    
    (3,320
    )
    
    
    (1,435
    )Long-term portion
    
    $
    7,790
    
    
    $
    1,507
      12. Note Payable
  
  16




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##### Table of Contents



13. Stockholders Equity
  Shares subjecttoExercise price
    
    Warrants$ 2.33
    
    
    12,522$ 3.38
    
    
    14,902$ 4.26
    
    
    257,986285,410
    SharesEmployee stock compensation plans
    
    
    4,868,510Warrants to purchase common stock
    
    
    285,4105,153,920
 14. Geographic Information
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Unites States
    
    
    74
    %
    
    
    91
    %
    
    
    79
    %
    
    
    91
    %Japan
    
    
    21
    %
    
    
    
    
    
    
    16
    %
    
    
    Other
    
    
    5
    %
    
    
    9
    %
    
    
    5
    %
    
    
    9
    %100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
   17




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##### Table of Contents



15. Commitments and Contingencies
 Procurement agreements in connection with quick-launch satellites
      Procurement agreements in connection with U.S. Coast Guard contract
     18




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##### Table of Contents



90-day
  Procurement agreement in connection with next-generation satellites
 next-generation
     19




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##### Table of Contents



Gateway settlement obligation
  Airtime credits
  Purchase
commitment
  Litigation
  Class Action Litigation
 co-lead
  20




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Safe Harbor Statement Under the Private Securities Litigation Reform of Act 1995.
  Overview
  On June 19, 2008, the Coast Guard demonstration satellite and five quick-launch satellites were successfully launched.
Each of the satellites successfully separated from the launch vehicle in the proper orbit and is undergoing in-orbit
testing and positioning. The majority of in-orbit testing of the payload subsystems has been completed to verify proper
operation of the subscriber links, gateway links and AIS payload functionality. All satellites are providing AIS data
and three satellites are assisting with the regular messaging service as in-orbit testing is completed. As a result of
on-going in-orbit testing of these satellites, our satellite providers are investigating the lower than nominal gateway
transmission power on one satellite and outages to the reaction wheel components of the attitude control system on each
of the satellites. One of the new satellites has experienced an unrecovered outage to both a redundant and a
non-redundant reaction wheel which could reduce its communication capabilities. In addition, two of the new satellites
have experienced outages to redundant reaction wheels that remain unrecovered. Software has been developed by the bus
manufacturer and uploaded to five of the satellites to mitigate the effect of any future reaction wheel outages. One
satellite that received this software patch has experienced an additional outage to its remaining redundant reaction
wheel that remains unrecovered. While the satellite bus provider has informed us that they expect to be able to resolve
or develop operational procedures to satisfactorily mitigate the affect of these anomalies, there can be no assurance
in this regard. We are unable to quantify the impact, if any, that these anomalies will have on the expected useful
life and communication capabilities of the satellites until the in-orbit testing is completed and more information
about the root cause of the anomalies becomes available. These satellites
will be positioned to augment our existing constellation, which, upon
successful completion of in-orbit testing, would increase our
satellites in service to 33 and provide additional capacity and improved
message delivery speeds for current and future users. In addition, these
satellites are equipped with AIS payloads enabling them to receive and
report AIS transmissions to be used for ship tracking and other navigational
activities.    21




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##### Table of Contents



end-users end-users
    i.e
 ORBCOMM Japan
    22




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Critical Accounting Policies
  EBITDA
    Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net loss
    
    $
    (1,001
    )
    
    $
    (422
    )
    
    $
    (2,514
    )
    
    $
    (4,658
    )Interest income
    
    
    (375
    )
    
    
    (1,600
    )
    
    
    (1,497
    )
    
    
    (4,218
    )Interest expense
    
    
    48
    
    
    
    52
    
    
    
    146
    
    
    
    157Depreciation and
amortization
    
    
    892
    
    
    
    619
    
    
    
    2,203
    
    
    
    1,757EBITDA
    
    $
    (436
    )
    
    $
    (1,351
    )
    
    $
    (1,662
    )
    
    $
    (6,962
    )
    23




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##### Table of Contents



Results of Operations
 Revenues
   Three months ended September 30,
    
    

Nine
months ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofTotal
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    TotalService revenues
    
    $
    6,336
    
    
    
    79.5
    %
    
    $
    4,551
    
    
    
    65.8
    %
    
    $
    16,948
    
    
    
    78.6
    %
    
    $
    12,718
    
    
    
    65.2
    %Product sales
    
    
    1,633
    
    
    
    20.5
    %
    
    
    2,361
    
    
    
    34.2
    %
    
    
    4,624
    
    
    
    21.4
    %
    
    
    6,782
    
    
    
    34.8
    %Total
    
    $
    7,969
    
    
    
    100.0
    %
    
    $
    6,912
    
    
    
    100.0
    %
    
    $
    21,572
    
    
    
    100.0
    %
    
    $
    19,500
    
    
    
    100.00
    %
   Service revenues
    Product sales
     24




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##### Table of Contents



Costs of services
      Costs of product sales
     Selling, general and administrative expenses
   stock-based
  25




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##### Table of Contents



Product development expenses
     Gain on customer claims settlements
    Other income (expense)
     Pre-control earnings in subsidiary and minority interest
   Net losses
    26




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##### Table of Contents



Liquidity and Capital Resources
 Overview
  Operating activities
   Investing activities
   Financing activities
   Future Liquidity and Capital Resource Requirements
  Contractual Obligations
 Form
10-K
 next-generation
  27




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##### Table of Contents



quick-launch
  Off-Balance Sheet Arrangements
  Recent accounting pronouncements
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Business Combinations
  28




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##### Table of Contents



Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133 Disclosure About Fair
Value of Financial Instruments
 The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly
in Conformity With Generally Accepted Accounting Principles
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risks
  Impact of Foreign Currency Rates Certain liabilities in one of our foreign subsidiaries are denominated in U.S. dollars. Foreign currency transactions
gains and losses, arising from the remeasurement of these liabilities, are included in our consolidated statements of
operations. As a result, we are exposed to foreign exchange risk. Concentration
of credit risk
   
 Item 4. Disclosure Controls and Procedures
 Evaluation of the Companys disclosure controls and procedures.
 Internal Control over Financial Reporting.
 
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  A global recession and continued worldwide credit and capital constraints could adversely affect us. Recent global economic conditions, including concerns about a potential global recession, tightening of credit and
capital markets and failures or material business deteriorations of financial institutions and other entities, have
resulted in unprecedented government intervention in the U.S., Europe and other regions of the world. In addition, the
current market turmoil and tightening of credit have led to lack of customer confidence, increased market volatility
and a reduction of generall business activity. If these conditions continue or worsen, risks to us include:  
    
    potential declines in revenues, profitability and cash flow due to reduced orders for our products and
services, payment delays or other factors caused by economic challenges faced by our customers, end-users and
prospective customers and end-users;  
    
    potential adverse impacts on our ability and our customers and vendors ability to access credit and capital
sources; and  
    
    potential reprioritization by our customers, end-users and prospective customers and end-users of resources
away from investments in capital improvements, equipment, vehicles or vessels which use our products and services
including in the transportation market among other markets which use our products and services. Any such impacts could have a material adverse effect on our business, financial condition, operating results and cash
flow.  29




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Use of Proceeds from Initial Public Offering
  Exercise of Warrants
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
 in-production
  
 Item 6. Exhibits
 10.1
    
    Amendment of
Solicitation/Modification of Contract dated August 28, 2008 amending the
Validation Services Agreement dated as of May 20, 2004 between the Company and the U.S. Coast Guard.10.2
    
    Amendment of
Solicitation/Modification of Contract dated September 30, 2008
amending the Validation Services Agreement dated as of May 20,
2004 between the Company and the U.S. Coast Guard.10.3
    
    Amendment of
Solicitation/Modification of Contract dated September 30, 2008
amending the Validation Services Agreement dated as of May 20,
2004 between the Company and the U.S. Coast Guard.*10.4
    
    Amendment Number Two to Cooperation Agreement dated as of November 3, 2008 by and among the Company, Stellar Satellite Communications Ltd. and the Delphi Electronics & Safety Division of Delphi Incorporated.*10.5
    
    Pricing Agreement dated as of September 8, 2008 by and between Stellar Satellite Communications Ltd. and Delphi Automotive Systems, LLC, acting through its Delphi Electronics & Safety Division.31.1
    
    Certification of Chief Executive Officer required by Rule 13a-14(a).31.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(a).32.1
    
    Certification of Chief Executive Officer required by Rule 13a-14(b) and 18 U.S.C. Section 1350.32.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(b) and 18 U.S.C. Section 1350.
 *
    
    Portions of this exhibit have been omitted and filed separately with the Office of the
Secretary of the Securities and Exchange Commission pursuant to a confidential treatment
request.  30




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##### Table of Contents



SIGNATURES
  ORBCOMM Inc.
(Registrant)Date: November 10, 2008
    /s/ Marc J. EisenbergMarc J. Eisenberg,Chief Executive Officer
(Principal Executive Officer)Date: November 10, 2008
    /s/ Robert G. CostantiniRobert G. Costantini,Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)  31




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description10.1
    
    Amendment of
Solicitation/Modification of Contract dated August 28, 2008 amending the
Validation Services Agreement dated as of May 12, 2004 by and between the Company and the U.S.
Coast Guard.10.2
    
    Amendment of
Solicitation/Modification of Contract dated September 30, 2008
amending the Validation Services Agreement dated as of May 20,
2004 between the Company and the U.S. Coast Guard.10.3
    
    Amendment of
Solicitation/Modification of Contract dated September 30, 2008
amending the Validation Services Agreement dated as of May 20,
2004 between the Company and the U.S. Coast Guard.*10.4
    
    Amendment Number Two to Cooperation Agreement dated as of November 3, 2008 by and among the Company, Stellar Satellite Communications Ltd. and the Delphi Electronics & Safety Division of Delphi Incorporated.*10.5
    
    Pricing Agreement dated as of September 8, 2008 by and between Stellar Satellite Communications Ltd. and Delphi Automotive Systems, LLC, acting through its Delphi Electronics & Safety Division.31.1
    
    Certification of Chief Executive Officer required by Rule 13a-14(a).31.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(a).32.1
    
    Certification of Chief Executive Officer required by Rule 13a-14(b) and 18 U.S.C. Section 1350.32.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(b) and 18 U.S.C. Section 1350.
 *
    
    Portions of this exhibit have been omitted and filed separately with the Office of the
Secretary of the Securities and Exchange Commission pursuant to a confidential treatment
request.  32