##### 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, 2006
 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 
of incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 2115 Linwood Avenue, Fort Lee, New Jersey, 07024
 (201) 363-4900
 (Former name, former address and formal fiscal year, if changed since last report)
 o þ
  o o þ
 o þ




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##### 



ORBCOMM Inc.
 Index
 Part I  Financial InformationItem 1.
    
    Condensed Consolidated Financial Statements (Unaudited):Condensed Consolidated Balance Sheets
    
    
    2Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5-21Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22-33Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risks
    
    
    33Item 4.
    
    Controls and Procedures
    
    
    34Part II  Other InformationItem 1.
    
    Legal Proceedings
    
    
    35Item 1A.
    
    Risk Factors
    
    
    35-36Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    36Item 3.
    
    Defaults Upon Senior Securities
    
    
    36Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    37Item 5.
    
    Other Information
    
    
    37Item 6.
    
    Exhibits
    
    
    37Signatures
    
    
    
    
    38Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 ORBCOMM Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
 September 30,
    
    
    December 31,2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    20,061
    
    
    $
    68,663Marketable securities
    
    
    19,350
    
    
    
    Accounts receivable, net of allowances for doubtful accounts of $580 and $671
as of September 30, 2006 and December 31, 2005, respectively (includes amounts
due from related parties of $542 as of September 30, 2006 and $543 as of
December 31, 2005, respectively)
    
    
    4,452
    
    
    
    3,550Inventories
    
    
    5,026
    
    
    
    2,747Advances to contract manufacturer
    
    
    220
    
    
    
    701Prepaid expenses and other current assets
    
    
    1,971
    
    
    
    727Total current assets
    
    
    51,080
    
    
    
    76,388Long-term receivable  related party
    
    
    422
    
    
    
    472Satellite network and other equipment, net
    
    
    20,857
    
    
    
    7,787Intangible assets, net
    
    
    3,737
    
    
    
    4,375Other assets
    
    
    305
    
    
    
    294Total assets
    
    $
    76,401
    
    
    $
    89,316LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable
    
    $
    3,567
    
    
    $
    2,330Accrued liabilities
    
    
    4,822
    
    
    
    8,198Current portion of deferred revenue
    
    
    1,396
    
    
    
    575Total current liabilities
    
    
    9,785
    
    
    
    11,103Note payable  related party
    
    
    793
    
    
    
    594Deferred revenue, net of current portion
    
    
    8,303
    
    
    
    8,052Total liabilities
    
    
    18,881
    
    
    
    19,749Commitments and contingenciesConvertible redeemable preferred stock:Series A, par value $0.001; 15,000,000 shares authorized; 14,053,611 shares issued and
outstanding as of September 30, 2006 and December 31, 2005 (liquidation preference
values of $0 and $8,027 as of September 30, 2006 and December 31, 2005, respectively).
    
    
    37,840
    
    
    
    45,500Series B, par value $0.001; 30,000,000 shares authorized; 18,021,341 and 17,629,999 shares
issued and outstanding as of September 30, 2006 and December 31, 2005, respectively
(liquidation preference values of $79,162 and $71,049 as of September 30, 2006 and
December 31, 2005, respectively).
    
    
    75,119
    
    
    
    66,721Stockholders deficit:Common stock, par value $0.001; 105,000,000 shares authorized; 6,305,240 and 5,690,017
shares issued and outstanding as of September 30, 2006 and December 31, 2005,
respectively.
    
    
    6
    
    
    
    6Additional paid-in capital
    
    
    682
    
    
    
    5,882Accumulated other comprehensive income (loss)
    
    
    (237
    )
    
    
    90Accumulated deficit
    
    
    (55,890
    )
    
    
    (48,632
    )Total stockholders deficit
    
    
    (55,439
    )
    
    
    (42,654
    )Total liabilities, convertible redeemable preferred stock and
stockholders deficit
    
    $
    76,401
    
    
    $
    89,316
 See notes to condensed consolidated financial statements.
  - 2 -




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ORBCOMM Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share data)
(Unaudited)
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues (1):Service revenues
    
    $
    3,220
    
    
    $
    2,109
    
    
    $
    8,165
    
    
    $
    5,703Product sales
    
    
    2,334
    
    
    
    1,556
    
    
    
    10,030
    
    
    
    4,370Total revenues
    
    
    5,554
    
    
    
    3,665
    
    
    
    18,195
    
    
    
    10,073Costs and expenses (2):Costs of services
    
    
    2,209
    
    
    
    1,493
    
    
    
    6,375
    
    
    
    4,192Costs of product sales
    
    
    2,285
    
    
    
    1,628
    
    
    
    9,615
    
    
    
    4,706Selling, general and administrative
    
    
    3,105
    
    
    
    2,161
    
    
    
    9,653
    
    
    
    6,178Product development
    
    
    413
    
    
    
    487
    
    
    
    1,455
    
    
    
    869Total cost and expenses
    
    
    8,012
    
    
    
    5,769
    
    
    
    27,098
    
    
    
    15,945Loss from operations
    
    
    (2,458
    )
    
    
    (2,104
    )
    
    
    (8,903
    )
    
    
    (5,872
    )Other income (expense):Interest income
    
    
    595
    
    
    
    5
    
    
    
    1,636
    
    
    
    20Other income
    
    
    58
    
    
    
    
    
    
    
    198
    
    
    
    9Interest expense
    
    
    (62
    )
    
    
    
    
    
    
    (189
    )
    
    
    Total other income
    
    
    591
    
    
    
    5
    
    
    
    1,645
    
    
    
    29Net loss
    
    $
    (1,867
    )
    
    $
    (2,099
    )
    
    $
    (7,258
    )
    
    $
    (5,843
    )Net loss applicable to common shares (Note 5)
    
    $
    (4,305
    )
    
    $
    (3,361
    )
    
    $
    (14,559
    )
    
    $
    (9,674
    )Net loss per common share:Basic and diluted
    
    $
    (0.71
    )
    
    $
    (0.59
    )
    
    $
    (2.50
    )
    
    $
    (1.70
    )Basic and diluted pro forma (Note 2)
    
    $
    (0.15
    )
    
    
    
    
    
    $
    (0.50
    )Weighted average common shares outstanding:Basic and diluted
    
    
    6,085
    
    
    
    5,690
    
    
    
    5,823
    
    
    
    5,680Basic and diluted pro forma (Note 2)
    
    
    29,311
    
    
    
    
    
    
    
    29,038(1) Related party revenues:Service revenues
    
    $
    90
    
    
    $
    297
    
    
    $
    161
    
    
    $
    460Product sales
    
    $
    24
    
    
    $
    60
    
    
    $
    31
    
    
    $
    66(2) Stock-based compensation included in costs and expenses:Costs of services
    
    $
    7
    
    
    $
    2
    
    
    $
    24
    
    
    $
    6Selling, general and administrative
    
    
    114
    
    
    
    26
    
    
    
    514
    
    
    
    156Product development
    
    
    5
    
    
    
    2
    
    
    
    15
    
    
    
    9$
    126
    
    
    $
    30
    
    
    $
    553
    
    
    $
    171
 See notes to condensed consolidated financial statements.
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ORBCOMM Inc.
 Nine months endedSeptember 30,2006
    
    
    2005Cash flows from operating activities:Net loss
    
    $
    (7,258
    )
    
    $
    (5,843
    )Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:Change in allowance for doubtful accounts
    
    
    (91
    )
    
    
    272Inventory impairments
    
    
    336
    
    
    
    Depreciation and amortization
    
    
    1,904
    
    
    
    1,355Accretion on notes payable  related party
    
    
    98
    
    
    
    Stock-based compensation
    
    
    553
    
    
    
    171Changes in operating assets and liabilities:Accounts receivable
    
    
    (761
    )
    
    
    (334
    )Inventories
    
    
    (2,615
    )
    
    
    (96
    )Advances to contract manufacturer
    
    
    481
    
    
    
    2,810Prepaid expenses and other current assets
    
    
    (1,244
    )
    
    
    (407
    )Other assets
    
    
    (11
    )
    
    
    (105
    )Accounts payable and accrued liabilities
    
    
    (2,139
    )
    
    
    107Deferred revenue
    
    
    1,072
    
    
    
    4,463Net cash (used in) provided by operating activities
    
    
    (9,675
    )
    
    
    2,393Cash flows from investing activities:Capital expenditures
    
    
    (14,336
    )
    
    
    (3,457
    )Purchase of marketable securities
    
    
    (24,250
    )
    
    
    Sale of marketable securities
    
    
    4,900
    
    
    
    Net cash used in investing activities
    
    
    (33,686
    )
    
    
    (3,457
    )Cash flows from financing activities:Proceeds from issuance of Series B preferred stock
net of issuance costs of  $113
    
    
    1,465
    
    
    
    Proceeds from exercise of common stock warrants
    
    
    1,547
    
    
    
    Payment of Series A preferred stock dividends
    
    
    (8,027
    )
    
    
    Net cash used in financing activities
    
    
    (5,015
    )
    
    
    Effect of exchange rate changes on cash and cash equivalents
    
    
    (226
    )
    
    
    Net decrease in cash and cash equivalents
    
    
    (48,602
    )
    
    
    (1,064
    )Cash and cash equivalents:Beginning of period
    
    
    68,663
    
    
    
    3,316End of period
    
    $
    20,061
    
    
    $
    2,252Supplemental cash flow disclosure:Non-cash financing activities -Preferred stock dividends accrued
    
    $
    6,536
    
    
    $
    3,504Non-cash investing activities -Gateway received in consideration for payment for
accounts receivable
    
    $
    
    
    
    $
    157
 See notes to condensed consolidated financial statements.
  - 4 -




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ORBCOMM Inc.
 (in thousands, except share and per share amounts)
 1. Business
  2. Basis of Presentation
    Marketable securities
  - 5 -




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Concentration of credit risk
 Inventories
 Income taxes
 Initial Public Offering and pro forma information
   As of September 30, 2006Balance Sheet Data (in thousands):
    
    Actual
    
    
    Pro formaCash and cash equivalents
    
    $
    20,061
    
    
    $
    91,011Marketable securities
    
    
    19,350
    
    
    
    19,350Satellite equipment, net
    
    
    20,857
    
    
    
    20,857Intangible assets
    
    
    3,737
    
    
    
    7,351Working capital
    
    
    41,295
    
    
    
    110,735Total assets
    
    
    76,401
    
    
    
    149,455Accrued liabilities
    
    
    4,822
    
    
    
    4,822Note payable- related party
    
    
    793
    
    
    
    793Convertible redeemable preferred stock
    
    
    112,959
    
    
    
    Additional paid- in capital
    
    
    682
    
    
    
    186,664Stockholders (deficit) equity
    
    
    (55,439
    )
    
    
    130,573
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Recent accounting pronouncements
 Accounting Changes and Error Corrections a replacement
of APB Opinion No. 20 and FASB Statement No. 3
 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
 3. Comprehensive Loss
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net loss
    
    $
    (1,867
    )
    
    $
    (2,099
    )
    
    $
    (7,258
    )
    
    $
    (5,843
    )Foreign currency translation adjustment
    
    
    (88
    )
    
    
    
    
    
    
    (327
    )
    
    
    Comprehensive loss
    
    $
    (1,955
    )
    
    $
    (2,099
    )
    
    $
    (7,585
    )
    
    $
    (5,843
    )
  - 7 -




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##### Table of Contents



4. Stock-based Compensation
    Share-Based Payment Accounting for Stock Issued to Employees Accounting for Stock-Based
Compensation
     - 8 -




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Nine months endedSeptember 30,2006
    
    
    2005(1)Risk-free interest rate
    
    
    4.64
    %
    
    
    Expected life (years)
    
    
    4.00
    
    
    
    Estimated volatility factor
    
    
    44.50
    %
    
    
    Expected dividends
    
    None
    
    
    
    
 (1) There were no options granted during the nine months ended September 30, 2005.
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2005Net loss applicable to common shares, as reported
    
    $
    (3,361
    )
    
    $
    (9,674
    )Add: Stock-based employee compensation
determined under APB No. 25 and included in
reported net loss
    
    
    30
    
    
    
    171Deduct: Employee stock-based compensation
determined under the fair value method for all
awards, net of related tax effects
    
    
    (106
    )
    
    
    (424
    )Pro forma net loss applicable to common shares
    
    $
    (3,437
    )
    
    $
    (9,927
    )Net loss per common share, basic and diluted:As reported
    
    $
    (0.59
    )
    
    $
    (1.70
    )Pro forma
    
    $
    (0.60
    )
    
    $
    (1.74
    )
  Weightedaverageremaining
    
    
    AggregateNumber of
    
    
    Weighted-average
    
    
    contractual term
    
    
    intrinsic valueshares
    
    
    exercise price
    
    
    (years)
    
    
    (in thousands)Outstanding at January 1, 2006
    
    
    1,461,707
    
    
    $
    3.06Granted
    
    
    50,000
    
    
    
    4.88Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    (47,333
    )
    
    
    3.86Outstanding at September 30, 2006
    
    
    1,464,374
    
    
    $
    3.09
    
    
    
    7.15
    
    
    $
    14,509Exercisable at September 30, 2006
    
    
    1,329,953
    
    
    $
    2.97
    
    
    
    7.13
    
    
    $
    13,338Vested and expected to vest
at September 30, 2006
    
    
    1,449,861
    
    
    $
    3.08
    
    
    
    7.15
    
    
    $
    14,379
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##### Table of Contents



Weighted-average grantShares
    
    
    date fair valueBalance at January 1, 2006
    
    
    252,521
    
    
    $
    2.10Granted
    
    
    50,000
    
    
    
    11.16Vested
    
    
    (135,299
    )
    
    
    4.17Forfeited
    
    
    (32,800
    )
    
    
    2.09Balance at September 30, 2006
    
    
    134,422
    
    
    $
    3.59
   5. Net Loss per Common Share
   Nine months endedSeptember 30,2006
    
    
    2005Series A convertible preferred stock
    
    
    9,369,074
    
    
    
    8,955,741Series B convertible preferred stock
    
    
    12,014,227
    
    
    
    Preferred stock warrants
    
    
    318,928
    
    
    
    318,928Common stock warrants
    
    
    1,302,776
    
    
    
    1,917,998Stock options
    
    
    1,464,374
    
    
    
    1,476,45724,469,379
    
    
    
    12,669,124
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net loss
    
    $
    (1,867
    )
    
    $
    (2,099
    )
    
    $
    (7,258
    )
    
    $
    (5,843
    )Add: Preferred stock dividends and
accretion of preferred stock
carrying value
    
    
    (2,438
    )
    
    
    (1,262
    )
    
    
    (7,301
    )
    
    
    (3,831
    )Net loss applicable to common shares
    
    $
    (4,305
    )
    
    $
    (3,361
    )
    
    $
    (14,559
    )
    
    $
    (9,674
    )
  - 10 -




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6. Satellite Network and Other Equipment
  Useful life
    
    
    September 30,
    
    
    December 31,(years)
    
    
    2006
    
    
    2005Land
    
    
    
    
    
    $
    285
    
    
    $
    Satellite network
    
    
    5-7
    
    
    
    7,435
    
    
    
    7,421Capitalized software
    
    
    3-5
    
    
    
    460
    
    
    
    268Other
    
    
    2-7
    
    
    
    1,141
    
    
    
    663Assets under construction
    
    
    
    
    
    
    18,698
    
    
    
    5,33128,019
    
    
    
    13,683Less: accumulated depreciation and amortization
    
    
    
    
    
    
    (7,162
    )
    
    
    (5,896
    )$
    20,857
    
    
    $
    7,787
    7. Intangible Assets
  Useful life(years)
    
    
    September 30, 2006
    
    
    December 31, 2005Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedCost
    
    
    amortization
    
    
    Net
    
    
    Cost
    
    
    amortization
    
    
    NetAcquired licenses
    
    
    6
    
    
    $
    4,484
    
    
    $
    (747
    )
    
    $
    3,737
    
    
    $
    4,484
    
    
    $
    (187
    )
    
    $
    4,297Intellectual
property
    
    
    3
    
    
    
    715
    
    
    
    (715
    )
    
    
    
    
    
    
    715
    
    
    
    (637
    )
    
    
    78$
    5,199
    
    
    $
    (1,462
    )
    
    $
    3,737
    
    
    $
    5,199
    
    
    $
    (824
    )
    
    $
    4,375
   Years ending December 31,Remainder of 2006
    
    $
    1892007
    
    
    7472008
    
    
    7472009
    
    
    7472010
    
    
    747Thereafter
    
    
    560$
    3,737
  - 11 -




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##### Table of Contents



8. Accrued Liabilities
  September 30,
    
    
    December 31,2006
    
    
    2005Accrued Series B preferred stock issuance costs
    
    $
    
    
    
    $
    2,911Gateway settlement obligation (see Note 15)
    
    
    945
    
    
    
    1,645Accrued compensation and benefits
    
    
    1,425
    
    
    
    960Payroll taxes and withholdings, interest and penalties
    
    
    
    
    
    
    117Accrued warranty obligations
    
    
    157
    
    
    
    236Accrued interest
    
    
    625
    
    
    
    560Accrued professional services
    
    
    184
    
    
    
    596Other accrued expenses
    
    
    1,486
    
    
    
    1,173$
    4,822
    
    
    $
    8,198
   September 30,
    
    
    December 31,2006
    
    
    2005Balance at beginning of period
    
    $
    236
    
    
    $
    493Payments
    
    
    (98
    )
    
    
    (584
    )Accruals for obligations
    
    
    19
    
    
    
    327Balance at end of period
    
    $
    157
    
    
    $
    236
 9. Deferred Revenues
  September 30,
    
    
    December 31,2006
    
    
    2005Professional services
    
    $
    7,236
    
    
    $
    6,674Service activation fees
    
    
    1,263
    
    
    
    1,040Manufacturing license fees
    
    
    93
    
    
    
    105Prepaid services
    
    
    1,107
    
    
    
    8089,699
    
    
    
    8,627Less current portion
    
    
    (1,396
    )
    
    
    (575
    )Long-term portion
    
    $
    8,303
    
    
    $
    8,052
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##### Table of Contents



10. Note Payable
 OHB Technology A.G.   
 11. Convertible Redeemable Preferred Stock
   September 30, 2006
    
    
    December 31, 2005Series A
    
    
    Series B
    
    
    Series A
    
    
    Series BRedemption value
    
    $
    39,912
    
    
    $
    72,626
    
    
    $
    39,912
    
    
    $
    71,049Accrued dividends
    
    
    
    
    
    
    6,536
    
    
    
    8,027
    
    
    
    Issuance costs, net of accretion
    
    
    (2,072
    )
    
    
    (4,043
    )
    
    
    (2,439
    )
    
    
    (4,328
    )Carrying value
    
    $
    37,840
    
    
    $
    75,119
    
    
    $
    45,500
    
    
    $
    66,721
 Series B preferred stock financing
 Dividends
  Conversion
  - 13 -




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##### Table of Contents



12. Stockholders Deficit
  Exercise price
    
    Shares subject to Warrants$2.33
    
    
    1,044,843$2.78
    
    
    23,333$3.38
    
    
    143,612$4.26
    
    
    90,9881,302,776
  SharesConversion of preferred stock
    
    
    30,000,000Warrants to purchase convertible preferred stock
    
    
    318,928Warrants to purchase common stock
    
    
    1,302,776Employee stock compensation plans
    
    
    6,122,58137,744,285
 13. Geographic Information
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Unites States
    
    
    88
    %
    
    
    80
    %
    
    
    91
    %
    
    
    82
    %Other(1)
    
    
    12
    %
    
    
    20
    %
    
    
    9
    %
    
    
    18
    %100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 (1) No other single geographic areas are more than 10% of revenues for the three months ended
September 30, 2006 and 2005 and nine months ended September 30, 2005.
 14. Related Party Transactions
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005ORBCOMM
Europe
LLC(1)
    
    $
    
    
    
    $
    64
    
    
    $
    
    
    
    $
    189ORBCOMM Japan Limited
    
    
    65
    
    
    
    77
    
    
    
    224
    
    
    
    225Korea ORBCOMM Limited
    
    
    49
    
    
    
    51
    
    
    
    133
    
    
    
    110Satcom
International Group
plc.(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2$
    114
    
    
    $
    192
    
    
    $
    357
    
    
    $
    526
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Receivables atSeptember 30,
    
    
    December 31,2006
    
    
    2005ORBCOMM Asia Limited (2)
    
    $
    
    
    
    $
    9ORBCOMM Japan Limited
    
    
    389
    
    
    
    385Korea ORBCOMM Limited
    
    
    153
    
    
    
    149$
    542
    
    
    $
    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).
 (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
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ORBCOMM Japan Limited
 Korea ORBCOMM Limited
 Satcom International Group plc.  General.
  - 16 -




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##### Table of Contents



Satcom
Transaction.
  Satcom Reorganization and Acquisition.
 OHB Technology A.G.
 SES Global S.A.
  - 17 -




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##### Table of Contents



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




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ORBCOMM Asia.
   - 19 -




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##### Table of Contents



16. Subsequent Events
 Reverse stock split
 Restricted Stock Units (RSUs)
 Stock Appreciation Rights (SARs)
 GE Supply Agreement
 Series B Preferred Stock Consents
  - 20 -




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Termination of Series B Commitment
 Amended and Restated Certificate of Incorporation
  - 21 -




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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.
  General
     - 22 -




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##### Table of Contents



i.e.
 Critical Accounting Policies
  Revenue recognition
   - 23 -




---



##### Table of Contents



e.g.
   Costs of revenues
 Accounts receivable
 Satellite network and other equipment
 Capitalized development costs
  - 24 -




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##### Table of Contents



Convertible redeemable preferred stock
  Income taxes  Accounting for Income
Taxes
 Loss contingencies
 Stock-based compensation  Accounting
for Stock Issued to Employees Accounting for Stock-based Compensation Accounting for Equity Instruments Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services
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Share-Based Payment
        - 26 -




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Results of Operations
 Three and Nine Months Ended September 30, 2006 Compared with Three and Nine Months Ended September
30, 2005
 Revenues
   Three months ended September 30,
    
    
    Nine months ended September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005%of
    
    
    %of
    
    
    %of
    
    
    %ofTotal
    
    
    Total
    
    
    Total
    
    
    TotalService revenues
    
    $
    3,220
    
    
    
    58.0
    %
    
    $
    2,109
    
    
    
    57.5
    %
    
    $
    8,165
    
    
    
    44.9
    %
    
    $
    5,703
    
    
    
    56.6
    %Product sales
    
    
    2,334
    
    
    
    42.0
    
    
    
    1,556
    
    
    
    42.5
    
    
    
    10,030
    
    
    
    55.1
    
    
    
    4,370
    
    
    
    43.4$
    5,554
    
    
    
    100.0
    %
    
    $
    3,665
    
    
    
    100.0
    %
    
    $
    18,195
    
    
    
    100.0
    %
    
    $
    10,073
    
    
    
    100.0
    %
   Service revenues
     - 27 -




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Product sales
    Costs of services
    Costs of product sales
    - 28 -




---



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Selling, general and administrative expenses
     Product development expenses
    Other income (expense)
   - 29 -




---



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Net loss and net loss applicable to common shares
   Liquidity and Capital Resources
    Operating activities
   - 30 -




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Investing activities
   .
 Financing activities
     - 31 -




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Contractual Obligations
  Payment due by periodLess than
    
    
    1 to
    
    
    AfterTotal
    
    
    1 year
    
    
    3 years
    
    
    3 years(in thousands)Operating leases
    
    $
    1,131
    
    
    $
    677
    
    
    $
    316
    
    
    $
    138Satellite system and other equipment purchase obligations
    
    
    2,146
    
    
    
    1,146
    
    
    
    1,000
    
    
    
    Contingent payment to executive officer and estate of former executive officer(1)
    
    
    3,600
    
    
    
    3,600
    
    
    
    
    
    
    
    Total
    
    $
    6,877
    
    
    $
    5,423
    
    
    $
    1,316
    
    
    $
    138
 (1) On November 8, 2006, based on our initial public offering price of $11.00
per share we made a contingent payment of $3.6 million.
        - 32 -




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Off- Balance Sheet Arrangements
  Recent accounting pronouncements
 Accounting Changes and Error Corrections a replacement
of APB Opinion No. 20 and FASB Statement No. 3
 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
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risks
 
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Item 4. Controls and Procedures
 Evaluation of the Companys disclosure controls and procedures.
 Changes in Internal Control over Financial Reporting.
  - 34 -




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  The trading price of our common stock maybe adversely affected by 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.
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Future sales of our common stock may depress our share price.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Exercise of Warrants
  Initial Public Offering and Use of Proceeds from Sales of Registered Securities
   
 Item 3. Defaults Upon Senior Securities
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Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 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 (furnished herewith).32.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(b) and
18 U.S.C. Section 1350 (furnished herewith).
  - 37 -




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SIGNATURES
  ORBCOMM Inc.(Registrant)Date: December 14, 2006
    
    /s/ Jerome B. EisenbergJerome B. Eisenberg,Chairman of the Board and Chief Executive Officer(Principal Executive Officer)Date: December 14, 2006
    
    /s/ Robert G. CostantiniRobert G. Costantini,Executive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)
  - 38 -




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EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    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 (furnished herewith).32.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(b) and 18 U.S.C. Section 1350 (furnished herewith).
  - 39 -