0001022652-16-000122 | 10-Q | XBRL Viewer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2016	Nov. 02, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Trading Symbol	MIFI
Entity Registrant Name	NOVATEL WIRELESS INC
Entity Central Index Key	0001022652
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		53,955,341

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 17,165	$ 12,570
Accounts receivable, net of allowance for doubtful accounts of $812 at September 30, 2016 and $601 at December 31, 2015	27,497	35,263
Short-term investments	0	1,267
Inventories	39,970	55,837
Prepaid expenses and other	12,390	6,039
Total current assets	97,022	110,976
Property, plant and equipment, net of accumulated depreciation of $65,154 at September 30, 2016 and $62,832 at December 31, 2015	7,820	8,812
Rental assets, net of accumulated depreciation of $2,057 at September 30, 2016 and $1,034 at December 31, 2015	6,582	6,155
Intangible assets, net of accumulated amortization of $22,802 at September 30, 2016 and $17,380 at December 31, 2015	41,007	43,089
Goodwill	33,117	29,520
Other assets	36	201
Total assets	185,584	198,753
Current liabilities:
Accounts payable	32,397	35,286
Accrued expenses and other current liabilities	37,091	25,613
DigiCore bank facilities	2,702	3,313
Total current liabilities	72,190	64,212
Long-term liabilities:
Convertible senior notes, net	88,796	82,461
Revolving credit facility	0	0
Deferred tax liabilities, net	3,453	3,475
Other long-term liabilities	13,386	18,142
Total liabilities	177,825	168,290
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, par value $0.001; 2,000,000 shares authorized and none outstanding	0	0
Common stock, par value $0.001; 150,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively, 53,929,603 and 53,165,024 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively	54	53
Additional paid-in capital	506,141	502,337
Accumulated other comprehensive loss	(1,868)	(8,507)
Accumulated deficit	(496,623)	(463,451)
Total stockholders’ equity attributable to Novatel Wireless, Inc.	7,704	30,432
Noncontrolling interests	55	31
Total stockholders’ equity	7,759	30,463
Total liabilities and stockholders’ equity	$ 185,584	$ 198,753

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 812	$ 601
Accumulated depreciation, Property, plant and equipment	65,154	62,832
Accumulated depreciation, Rental assets	2,057	1,034
Accumulated amortization, Intangible assets	$ 22,802	$ 17,380
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	53,929,603	53,165,024
Common stock, shares outstanding	53,929,603	53,165,024

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net revenues:
Hardware	$ 46,096	$ 52,049	$ 149,402	$ 154,332
SaaS, software and services	14,785	2,219	41,234	5,097
Total net revenues	60,881	54,268	190,636	159,429
Cost of net revenues:
Hardware	32,768	39,155	109,395	115,753
SaaS, software and services	5,189	645	13,896	1,251
Total cost of net revenues	37,957	39,800	123,291	117,004
Gross profit	22,924	14,468	67,345	42,425
Operating costs and expenses:
Research and development	7,942	7,687	24,248	28,135
Sales and marketing	7,953	3,948	24,062	12,403
General and administrative	14,551	9,110	34,744	23,462
Amortization of purchased intangible assets	1,008	273	2,912	1,096
Impairment of purchased intangible assets	2,594	0	2,594	0
Restructuring charges, net of recoveries	794	953	1,685	789
Total operating costs and expenses	34,842	21,971	90,245	65,885
Operating loss	(11,918)	(7,503)	(22,900)	(23,460)
Other income (expense):
Non-cash change in acquisition-related escrow	0	(10,533)	0	(10,317)
Interest expense, net	(3,877)	(2,407)	(11,712)	(3,319)
Other income (expense), net	(3,560)	(359)	986	(658)
Loss before income taxes	(19,355)	(20,802)	(33,626)	(37,754)
Income tax provision (benefit)	(799)	45	(478)	139
Net loss	(18,556)	(20,847)	(33,148)	(37,893)
Less: Net income attributable to noncontrolling interests	(11)	0	(24)	0
Net loss attributable to Novatel Wireless, Inc.	$ (18,567)	$ (20,847)	$ (33,172)	$ (37,893)
Net loss per share:
Basic and diluted ($ per share)	$ (0.34)	$ (0.38)	$ (0.62)	$ (0.73)
Weighted-average shares used in computation of net loss per share:
Basic and diluted (in shares)	53,876,795	55,180,537	53,584,410	51,647,970

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (18,556)	$ (20,847)	$ (33,148)	$ (37,893)
Foreign currency translation adjustment	4,044	0	6,639	0
Total comprehensive loss	$ (14,512)	$ (20,847)	$ (26,509)	$ (37,893)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net loss	$ (33,148)	$ (37,893)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	10,836	4,484
Amortization of acquisition-related inventory step-up	1,829	765
Provision for bad debts, net of recoveries	96	62
Provision for excess and obsolete inventory	2,580	810
Share-based compensation expense	3,437	3,227
Amortization of debt discount and debt issuance costs	6,335	2,581
Gain on divestiture and sale of other assets, net of loss on disposal of assets	(4,290)	0
Loss on impairment of purchased intangible assets	2,594	0
Non-cash change in acquisition-related escrow	0	10,317
Deferred income taxes	(735)	0
Non-cash earn-out compensation expense	2,109	0
Unrealized foreign currency transaction loss, net	3,038	0
Other	183	0
Changes in assets and liabilities, net of effects from acquisitions and divestitures:
Accounts receivable	9,881	(6,664)
Inventories	3,757	6,039
Prepaid expenses and other assets	(6,186)	(574)
Accounts payable	(7,077)	(13,868)
Accrued expenses, income taxes, and other	4,812	4,417
Net cash provided by (used in) operating activities	51	(26,297)
Cash flows from investing activities:
Acquisition-related escrow	0	(88,274)
Acquisitions, net of cash acquired	(3,750)	(9,063)
Purchases of property, plant and equipment	(875)	(996)
Proceeds from the sale of property, plant and equipment	392	0
Proceeds from the sale of divested assets	11,300	0
Proceeds from the sale of short-term investments	1,210	0
Purchases of intangible assets and additions to capitalized software costs	(2,092)	(224)
Net cash provided by (used in) investing activities	6,185	(98,557)
Cash flows from financing activities:
Gross proceeds from the issuance of convertible senior notes	0	120,000
Payment of issuance costs related to convertible senior notes	0	(3,540)
Proceeds from the exercise of warrant to purchase common stock	0	8,644
Net repayments of DigiCore bank facilities	(965)	0
Net repayments of revolving credit facility	0	(5,158)
Payoff of acquisition-related assumed liabilities	0	(2,633)
Principal payments under capital lease obligations	(722)	0
Principal payments on mortgage bond	(175)	0
Proceeds from stock option exercises and employee stock purchase plan, net of taxes paid on vested restricted stock units	368	257
Net cash provided by (used in) financing activities	(1,494)	117,570
Effect of exchange rates on cash and cash equivalents	(147)	(350)
Net increase (decrease) in cash and cash equivalents	4,595	(7,634)
Cash and cash equivalents, beginning of period	12,570	17,853
Cash and cash equivalents, end of period	17,165	10,219
Cash paid during the year for:
Interest	3,712	110
Income taxes	$ 92	$ 123

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2016
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The information contained herein has been prepared by Novatel Wireless, Inc. (the “Company”) in accordance with the rules of the Securities and Exchange Commission. The information at September 30, 2016 and the results of the Company’s operations for the three and nine months ended September 30, 2016 and 2015 are unaudited. The condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods presented. These condensed consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements from which they were derived and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Except as set forth below, the accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in the Company’s Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for any other interim period or for the year as a whole. For the three months ended September 30, 2016 and 2015, the Company incurred a net loss of $18.6 million and $20.8 million, respectively. The Company’s ability to transition to attaining profitable operations is dependent upon achieving a level and mix of revenues adequate to support its evolving cost structure. If events or circumstances occur such that the Company does not meet its operating plan as expected, the Company may be required to reduce planned research and development activities, incur additional restructuring charges or reduce other operating expenses which could have an adverse impact on its ability to achieve its intended business objectives. These additional reductions in expenditures, if required, could have an adverse impact on the Company’s ability to achieve certain of its business objectives. The Company’s management believes that its cash and cash equivalents and availability under its senior secured revolving credit facility, together with anticipated cash flows from operations, will be sufficient to meet its working capital needs for the next twelve months and the foreseeable future. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Segment Information Management has determined that the Company has one reportable segment. The Chief Executive Officer, who is also the Chief Operating Decision Maker, does not manage any part of the Company separately, and the allocation of resources and assessment of performance is based solely on the Company’s consolidated operations and operating results. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ materially from these estimates. Significant estimates include allowance for doubtful accounts receivable, provision for excess and obsolete inventory, valuation of intangible and long-lived assets, valuation of goodwill, valuation of debt obligations, royalty costs, accruals relating to litigation and restructuring, provision for warranty costs, income taxes and share-based compensation expense. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”), which are adopted by the Company as of the specified date. Unless otherwise discussed, management believes the impact of recently issued standards, some of which are not yet effective, will not have a material impact on its unaudited condensed consolidated financial statements upon adoption. In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which affects entities that issue share-based payment awards to their employees. The guidance is designed to identify areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. This guidance results in the Company providing a more faithful representation of the rights and obligations arising from operating and capital leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected the measurement or recognition of amounts initially recognized. As an alternative, the update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The Company implemented this guidance during the first quarter of 2016. This guidance did not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption. In April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Under this standard, if a cloud computing arrangement includes a software license, the software license element of the arrangement should be accounted for consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. The Company implemented this guidance during the first quarter of 2016. This guidance did not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which provides guidance for revenue recognition. The new standard will require revenue recognized to represent the transfer of promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date, which deferred the effective date of adoption of ASU 2014-09 to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted but not before the original effective date of December 15, 2016. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies aspects of ASU 2014-09 pertaining to the identification of performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. There are two adoption methods available for implementation of this guidance. Under one method, the guidance is applied retrospectively to contracts for each reporting period presented, subject to allowable practical expedients. Under the other method, the guidance is applied only to the most current period presented, recognizing the cumulative effect of the change as an adjustment to the beginning balance of retained earnings, and also requires additional disclosures comparing the results to the previous guidance. The Company is currently evaluating the adoption methods and assessing the impact of this guidance.

Acquisitions and Divestitures

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Acquisitions and Divestitures

Acquisitions

DigiCore Holdings Limited (DBA Ctrack)

On June 18, 2015, the Company entered into a transaction implementation agreement (the “TIA”) with DigiCore Holdings Limited (“DigiCore” or “Ctrack”). Pursuant to the terms of the TIA, the Company acquired 100% of the issued and outstanding ordinary shares of DigiCore (with the exception of certain excluded shares, including treasury shares) for 4.40 South African Rand per ordinary share outstanding on October 5, 2015. Upon consummation of the acquisition, DigiCore became an indirect wholly-owned subsidiary of the Company.

Upon the closing of the transaction, holders of unvested in-the-money DigiCore stock options received stock options to purchase shares of the Company’s common stock as replacement awards.

In connection with the acquisition, the Company incurred $1.7 million in total transaction costs and expenses, all of which were recognized in 2015.

Purchase Price

The total purchase price was approximately $80.0 million and included a cash payment for all of the outstanding ordinary shares of DigiCore and the purchase of in-the-money vested stock options held by Ctrack employees on the closing date of the transaction and the portion of the fair value of replacement equity awards issued to Ctrack employees that related to services performed prior to the date the transaction closed.

Set forth below is supplemental purchase consideration information related to the Ctrack acquisition (in thousands):



Cash payments	$	79,365
Fair value of replacement equity awards issued to Ctrack employees for preacquisition services	623
Total purchase price	$	79,988

Allocation of Fair Value

The Company accounted for the transaction using the acquisition method and, accordingly, the consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date. Goodwill resulting from this acquisition is largely attributable to the experienced workforce of Ctrack and synergies expected to arise after the integration of Ctrack’s products and operations into those of the Company. Goodwill resulting from this acquisition is not deductible for tax purposes. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangible assets for developed technologies, customer relationships and trade names, which are being amortized using the straight-line method over their estimated useful lives, as well as indefinite-lived intangible assets. Liabilities assumed from Ctrack included a mortgage bond and capital lease obligations.

The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands):



	October 5, 2015
Cash	$	2,437
Accounts receivable	15,052
Inventory	11,361
Property, plant and equipment	5,924
Rental assets	6,603
Intangible assets	28,270
Goodwill	29,273
Other assets	5,695
Bank facilities	(2,124		)
Accounts payable	(7,446		)
Accrued and other liabilities	(15,018		)
Noncontrolling interests	(39		)
Net assets acquired	$	79,988

Valuation of Intangible Assets Acquired

The following table sets forth the components of definite-lived intangible assets acquired in connection with the Ctrack acquisition (in thousands):



	Amount Assigned		Amortization Period (in years)
Developed technologies	$	10,170	6.0
Trade name	14,030		10.0
Customer relationships	4,070		5.0
Total intangible assets acquired	$	28,270

R.E.R. Enterprises, Inc. (DBA Feeney Wireless)

On March 27, 2015, the Company entered into an asset purchase agreement (“APA”) with R.E.R. Enterprises, Inc. (“RER”) to acquire all of the issued and outstanding shares of RER and its wholly-owned subsidiary and principal operating asset, Feeney Wireless, LLC, an Oregon limited liability company (collectively, “FW”), which develops and sells solutions for the Internet of Things that integrate wireless communications into business processes. This strategic acquisition expanded the Company’s product and solutions offerings to include private labeled cellular routers, in-house designed and assembled cellular routers, high-end wireless surveillance systems, modems, computers and software, along with associated hardware, purchased from major industry suppliers. Additionally, FW’s services portfolio includes consulting, systems integration and device management services.

In connection with the acquisition, the Company incurred $0.9 million in total costs and expenses, all of which were recognized in 2015.

Purchase Price

The total consideration was approximately $24.8 million and included a cash payment at closing of approximately $9.3 million, $1.5 million of which was placed into an escrow fund to serve as partial security for the indemnification obligations of RER and its former shareholders, the Company’s assumption of $0.5 million in certain transaction-related expenses incurred by FW, and the future issuance of shares of the Company’s common stock valued at $15.0 million, which would have been payable in March 2016.

The total consideration of $24.8 million did not include amounts, if any, payable under an earn-out arrangement pursuant to which the Company may have been required to pay up to an additional $25.0 million to the former shareholders of RER contingent upon FW’s achievement of certain financial targets for the years ending December 31, 2015, 2016, and 2017 (the “Earn-Out Arrangement”). Such payments, if any, under the Earn-Out Arrangement would have been payable in either cash or shares of the Company’s common stock at the discretion of the Company, and would have been recorded as compensation expense during the service period earned.

Set forth below is supplemental purchase consideration information related to the FW acquisition (in thousands):



Cash payments	$	9,268
Future issuance of common stock	15,000
Other assumed liabilities	509
Total purchase price	$	24,777

On January 5, 2016, the Company and RER amended certain payment terms of the APA. Under the amended agreement, the $1.5 million placed into escrow on the date of acquisition was released to RER and its former shareholders on January 8, 2016, and the $15.0 million that was payable in shares of the Company’s common stock in March 2016 will now be paid in five cash installments over a four-year period, beginning in March 2016. In addition, the Earn-Out Arrangement has been amended as follows: (a) any amount earned under the Earn-Out Arrangement for the achievement of financial targets for the year ended December 31, 2015 will now be paid in five cash installments over a four-year period, beginning in March 2016 and (b) in replacement of the potential earn-out contingent upon FW’s achievement of certain financial targets for the years ended December 31, 2016 and 2017 the Company will issue to the former shareholders of RER approximately 2.9 million shares of the Company’s common stock in three equal installments over a three-year period, beginning in March 2017, contingent upon the retention of certain key personnel.

The Company recognized approximately $1.3 million and $2.1 million in expense during the three and nine months ended September 30, 2016, respectively, in connection with the potential payment, in the form of shares of the Company’s common stock to the former shareholders of RER, which is contingent upon FW’s retention of certain key personnel. As of September 30, 2016, the total amount earned pursuant to the Earn-Out Arrangement was $8.2 million, $6.7 million of which remained outstanding as of September 30, 2016 and is included in accrued expenses and other current liabilities and in other long-term liabilities in the unaudited condensed consolidated balance sheets.

Allocation of Fair Value

The Company accounted for the transaction using the acquisition method and, accordingly, the consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date as set forth below. Goodwill resulting from this acquisition is largely attributable to the experienced workforce of FW and synergies expected to arise after the integration of FW’s products and operations into those of the Company. Goodwill resulting from this acquisition is deductible for tax purposes. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangible assets for developed technologies, customer relationships, and trademarks, which are being amortized using the straight-line method over their estimated useful lives, as well as indefinite-lived intangible assets, including in-process research and development. Liabilities assumed from FW included a term loan and capital lease obligations. The term loan and certain capital lease obligations were paid in full by the Company immediately following the closing of the acquisition on March 27, 2015.

The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands):



	March 27, 2015
Cash	$	205
Accounts receivable	3,331
Inventory	10,008
Property, plant and equipment	535
Intangible assets	18,880
Goodwill	3,949
Other assets	544
Accounts payable	(7,494		)
Accrued and other liabilities	(1,916		)
Deferred revenues	(270		)
Note payable	(2,575		)
Capital lease obligations	(420		)
Net assets acquired	$	24,777

Valuation of Intangible Assets Acquired

The following table sets forth the components of intangible assets acquired in connection with the FW acquisition (dollars in thousands):



	Amount Assigned		Amortization Period (in years)
Definite-lived intangible assets:
Developed technologies	$	3,660	6.0
Trademarks	4,700		10.0
Customer relationships	8,500		10.0
Indefinite-lived intangible assets:
In-process research and development	2,020
Total intangible assets acquired	$	18,880

During the three months ended September 30, 2016, the Company recorded an impairment loss related to the developed technologies acquired in connection with the FW acquisition (see Note 4).

Pro Forma Summary

The unaudited consolidated pro forma results for the three and nine months ended September 30, 2016 and 2015 are set forth in the table below (in thousands). These pro forma consolidated results combine the results of operations of the Company, Ctrack and FW as though Ctrack and FW had been acquired as of January 1, 2015 and include amortization charges for the acquired intangibles for both acquisitions and interest expense related to the Company’s borrowings to finance the Ctrack acquisition. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2015.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net revenues	$	60,881		$	70,390		$	190,636		$	214,172
Net loss	$	(18,556	)	$	(14,824	)	$	(33,148	)	$	(35,142	)

Divestitures

Hardware Modules and Related Assets

On April 11, 2016, the Company signed a definitive asset purchase agreement with Telit Technologies (Cyprus) Limited and Telit Wireless Solutions, Inc. (collectively, “Telit”) pursuant to which the Company sold, and Telit acquired, certain hardware modules and related assets for an initial purchase price of $11.0 million in cash, which included $9.0 million that was paid to the Company on the closing date of the transaction, $1.0 million that would be paid to the Company in equal quarterly installments over a two-year period in connection with the provision by the Company of certain transition services and $1.0 million that would be paid to the Company following the satisfaction of certain conditions by the Company, including the assignment of specified contracts and the delivery of certain certifications and approvals. The Company also had the potential to receive an additional cash payment of approximately $3.8 million from Telit related to their purchase of module product inventory from the Company, $1.0 million of which would be paid to the Company in equal quarterly installments over the two-year period following the closing date in connection with the provision by the Company of certain transition services. In addition to the above, the Company may have been entitled to receive a subsequent earn-out payment following the closing of the transaction if certain conditions were met.

On September 29, 2016, the Company entered into a Final Resolution Letter Agreement (the “Final Resolution”) with Telit. Per the Final Resolution, Telit agreed to pay the Company $2.1 million in full satisfaction of their payment obligations under certain sections of the original purchase agreement, including all installment payments, and the Company agreed to ship the remainder of the hardware modules and related assets as soon as practicable. Under the Final Resolution, the aggregate purchase consideration totaled $11.7 million, which consisted of $11.3 million in cash and $0.4 million in net settled Company liabilities.

During the nine months ended September 30, 2016, the Company recognized a gain of approximately $4.5 million in connection with the fulfillment of certain obligations pursuant to the asset purchase agreement, as amended, which is included in other income (expense), net, in the unaudited condensed consolidated statements of operations. During the three months ended September 30, 2016, the Company recognized a decrease of approximately $2.4 million in the $6.9 million gain that it had recognized during the six months ended June 30, 2016, as a result of the Final Resolution, which is included in other income (expense), net, in the unaudited condensed consolidated statements of operations. As of September 30, 2016, the Company recorded a liability of $1.5 million for the fair value of the remaining hardware and related assets due to Telit, which is included in accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets.

Mobile Broadband Business

On September 21, 2016, the Company, Vanilla Technologies, Inc., a Delaware corporation and direct wholly owned subsidiary of the Company (“Newco”), T.C.L. Industries Holdings (H.K.) Limited, a Hong Kong limited liability company (“TCL”), and Jade Ocean Global Limited, a British Virgin Islands business company (the “Purchaser” and, together with TCL, the “Purchasers”), entered into a Stock Purchase Agreement (the “Purchase Agreement”). Pursuant to the Purchase Agreement, the Purchaser will acquire the Company’s mobile broadband business, which includes its MiFi branded hotspots and USB modem product lines, and related liabilities (the “MiFi Business”) for cash consideration of $50.0 million, subject to potential adjustment based on the Company’s working capital as of the closing date (such acquisition of the MiFi Business being referred to herein as the “Sale”).

In connection with the proposed Sale, the Company intends to implement a reorganization (the “Reorganization”), which will result in Newco owning all of the capital stock of the Company. In connection with the Reorganization, (i) the Company will contribute to Newco all of its assets and liabilities (other than the MiFi Business), including its equity interests in DigiCore, FW, Novatel Wireless Solutions, Inc., Enfora Comercio de Eletronicos LTDA and each of their direct and indirect subsidiaries; and (ii) Vanilla Merger Sub, Inc., a newly formed Delaware corporation and direct, wholly owned subsidiary of Newco and an indirect, wholly owned subsidiary of the Company, will merge with and into the Company, with the Company surviving as a direct, wholly owned subsidiary of Newco (the “Merger”). As a result of and upon the effective time of the Merger, each share of the Company common stock issued and outstanding immediately prior to the effective time of the Merger will automatically convert into an equivalent corresponding share of Newco common stock, having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions as the corresponding share of the Company common stock being converted. Accordingly, upon consummation of the Merger, the Company’s current stockholders will become stockholders of Newco. Effective November 9, 2016, Newco will be named Inseego Corp. and will trade on the NASDAQ Global Select Market under the ticker symbol “INSG.”

The Sale will be structured as a purchase by Purchaser of all of the issued and outstanding shares of common stock of the Company, which shares will be solely owned by Newco immediately prior to the consummation of the Sale as a result of the Reorganization. The consummation of the Sale is subject to the completion of the Reorganization and is expected to occur in the first quarter of 2017.

In addition, the consummation of the Sale is subject to certain other conditions, including, but not limited to, (i) the approval of the Sale by the stockholders of Newco following the Reorganization, (ii) the Company no longer being a borrower under the Indenture, dated June 10, 2015, governing its 5.50% Senior Convertible Notes due 2020 (the “Convertible Notes”), (iii) obtaining approval of the transaction from the Committee on Foreign Investment in the United States, (iv) subject to certain materiality exceptions, the accuracy of the representations and warranties of each of the parties to the Purchase Agreement, and (v) the compliance in all material respects by the parties with the covenants contained in the Purchase Agreement.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Balance Sheet Details

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Details

Inventories

Inventories consist of the following (in thousands):



	September 30, 2016		December 31, 2015
Finished goods	$	30,095	$	47,094
Raw materials and components	9,875		8,743
Total inventories	$	39,970	$	55,837

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):



	September 30, 2016		December 31, 2015
Royalties	$	4,125	$	2,740
Payroll and related expenses	6,705		4,406
Warranty obligations	516		932
Market development funds and price protection	2,544		2,805
Professional fees	2,152		1,060
Accrued interest	1,925		274
Deferred revenue	2,168		1,836
Restructuring	829		1,044
Acquisition-related liabilities	7,384		5,274
Divestiture-related liabilities	1,537		—
Other	7,206		5,242
Total accrued expenses and other current liabilities	$	37,091	$	25,613

Accrued Warranty Obligations

Accrued warranty obligations activity during the nine months ended September 30, 2016 was as follows (in thousands):



Warranty liability at December 31, 2015	$	932
Additions charged to operations	351
Deductions from liability	(767		)
Warranty liability at September 30, 2016	$	516

Intangible Assets	9 Months Ended
Intangible Assets	Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Intangible Assets The balances in goodwill and intangible assets were primarily a result of the Company’s acquisitions of Ctrack, FW and Enfora, Inc. See Note 4, Intangible Assets, in the Company's 2015 Annual Report on Form 10-K for a discussion of the components of goodwill and additional information regarding intangible assets. In September 2016, the Company completed all in-process research and development projects and reclassified them to developed technologies. These developed technologies will be amortized over a useful life of six years. During the three and nine months ended September 30, 2016, the Company recorded an impairment loss primarily related to developed technologies acquired in connection with the FW acquisition of approximately $2.6 million.

Fair Value Measurement of Assets and Liabilities

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurement of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A fair value measurement reflects the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risk inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model.

The Company classifies inputs to measure fair value using a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) and is defined as follows:


Level 1:	Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE or NASDAQ). Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Pricing inputs include benchmark yields, trade data, reported trades and broker dealer quotes, two-sided markets and industry and economic events, yield to maturity, Municipal Securities Rule Making Board reported trades and vendor trading platform data. Level 2 includes those financial instruments that are valued using various pricing services and broker pricing information including Electronic Communication Networks and broker feeds.


Level 3:	Pricing inputs include significant inputs that are generally less observable from objective sources, including the Company’s own assumptions.

The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There have been no transfers of assets or liabilities between fair value measurement classifications during the nine months ended September 30, 2016.

The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of September 30, 2016 (in thousands):



	Balance as of September 30, 2016		Level 1
Assets:
Cash equivalents
Money market funds	$	35	$	35
Total cash equivalents	$	35	$	35



	Balance as of December 31, 2015		Level 1
Assets:
Cash equivalents
Money market funds	$	35	$	35
Total cash equivalents	35		35
Short-term investments	1,267		1,267
Total assets at fair value	$	1,302	$	1,302

Other Financial Instruments

The Company’s financial assets and liabilities are carried at fair value or at amounts that, because of their short-term nature, approximate current fair value, with the exception of its $120.0 million in Convertible Notes (see Note 6). The Company carries its Convertible Notes at amortized cost. The debt and equity components of the Convertible Notes were measured using Level 3 inputs and are not measured on a recurring basis. The fair value of the liability component of the Convertible Notes, which approximated its carrying value on the valuation date due to the recent issuance of such Convertible Notes, was $88.8 million as of September 30, 2016.

Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Debt

Revolving Credit Facility

On October 31, 2014, the Company entered into a five-year senior secured revolving credit facility in the amount of $25.0 million (the “Revolver”) with Wells Fargo Bank, National Association, as lender. Concurrently with the acquisition of FW, the Company amended the Revolver to include FW as a borrower and Loan Party, as defined by the agreement. On November 17, 2015, the Revolver was amended to increase the maximum borrowing capacity to $48.0 million.

The amount of borrowings that may be made under the Revolver is based on a borrowing base comprised of a specified percentage of eligible receivables. If, at any time during the term of the Revolver, the amount of borrowings outstanding under the Revolver exceeds the borrowing base then in effect, the Company is required to repay such borrowings in an amount sufficient to eliminate such excess. The Revolver includes $3.0 million available for letters of credit, $0.7 million of which was available for letters of credit at September 30, 2016.

The Company may borrow funds under the Revolver from time to time, with interest payable monthly at a base rate determined by using the daily three month LIBOR rate, plus an applicable margin of 3.00% to 3.50% depending on the Company’s liquidity as determined on the last day of each calendar month. The Revolver is secured by a first priority lien on substantially all of the assets of the Company and certain of its subsidiaries, subject to certain exceptions and permitted liens. The Revolver includes customary representations and warranties, as well as customary reporting and financial covenants.

There was no outstanding balance on the Revolver at September 30, 2016 or December 31, 2015. As of September 30, 2016, the Company had available borrowings of approximately $6.9 million and was in compliance with all financial covenants contained in the credit agreement.

Convertible Senior Notes

On June 10, 2015, the Company issued $120.0 million aggregate principal amount of Convertible Notes. The Company incurred issuance costs of approximately $3.9 million. The Company used a portion of the proceeds from the offering to finance its acquisition of Ctrack, to pay fees and expenses related to the acquisition, and for general corporate purposes.

The Convertible Notes are governed by the terms of the Indenture, dated June 10, 2015, entered into between the Company, as issuer, and Wilmington Trust, National Association, as trustee. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 5.50% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2015. The Convertible Notes will mature on June 15, 2020, unless earlier repurchased or converted. The Convertible Notes will be convertible into cash, shares of the Company’s common stock, or a combination thereof, at the election of the Company, at an initial conversion price of $5.00 per share of the Company’s common stock.

The Convertible Notes consisted of the following at September 30, 2016 (in thousands):



Liability component:
Principal	$	120,000
Less: unamortized debt discount and debt issuance costs	(31,204		)
Net carrying amount	$	88,796
Equity component	$	38,305

The Company determined the expected life of the debt was equal to the five-year term of the Convertible Notes. The effective interest rate on the liability component was 16.95% for the nine months ended September 30, 2016. The following table sets forth total interest expense recognized related to the Convertible Notes during the three and nine months ended September 30, 2016 and 2015 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Contractual interest expense	$	1,650	$	1,649	$	4,950	$	2,016
Amortization of debt discount	1,980		1,980		5,940		2,420
Amortization of debt issuance costs	132		132		395		161
Total interest expense	$	3,762	$	3,761	$	11,285	$	4,597

Share-based Compensation

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

The Company included the following amounts for share-based compensation awards in the unaudited condensed consolidated statements of operations (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Cost of revenues	$	49	$	49	$	156	$	107
Research and development	201		196		662		598
Sales and marketing	170		135		593		318
General and administrative	695		874		2,026		2,204
Total	$	1,115	$	1,254	$	3,437	$	3,227

Stock Options

The following table summarizes the Company’s stock option activity:



Outstanding — December 31, 2014	3,064,880
Granted	6,656,737
Exercised	(273,005	)
Canceled	(3,363,776	)
Outstanding — December 31, 2015	6,084,836
Granted	1,051,550
Exercised	(35,196	)
Canceled	(542,237	)
Outstanding — September 30, 2016	6,558,953
Exercisable — September 30, 2016	1,603,054

At September 30, 2016, total unrecognized compensation expense related to stock options was $4.6 million, which is expected to be recognized over a weighted-average period of 2.80 years.

Restricted Stock Units

The following table summarizes the Company’s restricted stock unit (“RSU”) activity:



Non-vested at December 31, 2014	1,628,179
Granted	1,042,659
Vested	(926,308	)
Forfeited	(784,327	)
Non-vested at December 31, 2015	960,203
Granted	2,914,000
Vested	(422,148	)
Forfeited	(244,471	)
Non-vested at September 30, 2016	3,207,584

At September 30, 2016, total unrecognized compensation expense related to RSUs was $3.7 million, which is expected to be recognized over a weighted-average period of 2.96 years.

Employee Stock Purchase Plan

During the three months ended September 30, 2016 and 2015, the Company recognized $0.1 million and $0.1 million, respectively, of stock-based compensation expense related to the employee stock purchase plan (the “ESPP”). During the nine months ended September 30, 2016 and 2015, the Company recognized $0.3 million and $0.3 million, respectively, of stock-based compensation expense related to the ESPP.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Geographic Information and Concentrations of Risk

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Geographic Information and Concentrations of Risk

Geographic Information

The following table details the Company’s concentration of net revenues by geographic region based on shipping destination:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
United States and Canada	72.4	%	96.4	%	74.6	%	96.2	%
Latin America	0.2		0.4		0.2		0.6
Europe, Middle East, Africa and other	25.2		2.9		23.5		3.0
Asia and Australia	2.2		0.3		1.7		0.2
	100.0	%	100.0	%	100.0	%	100.0	%

Concentrations of Risk

Historically, a significant portion of the Company’s net revenues comes from a small number of customers. For the three months ended September 30, 2016 and 2015, sales to the Company's largest customer accounted for 55.3% and 64.2%, respectively, of net revenues. For the nine months ended September 30, 2016 and 2015, sales to the Company’s largest customer accounted for 54.6% and 56.0%, respectively, of net revenues.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Earnings Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income (loss) attributable to Novatel Wireless, Inc. by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock using the treasury stock method. Potentially dilutive securities (consisting of warrants, stock options and RSUs calculated using the treasury stock method) are excluded from the diluted EPS computation in loss periods and when the applicable exercise price is greater than the market price on the period end date as their effect would be anti-dilutive.

The calculation of basic and diluted EPS was as follows (in thousands, except share and per share data):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net loss attributable to Novatel Wireless, Inc.	$	(18,567	)	$	(20,847	)	$	(33,172	)	$	(37,893	)
Weighted-average common shares outstanding	53,876,795			55,180,537			53,584,410			51,647,970
Basic and diluted net loss per share	$	(0.34	)	$	(0.38	)	$	(0.62	)	$	(0.73	)

For the three and nine months ended September 30, 2016, the computation of diluted EPS excluded 11,653,167 shares related to warrants, stock options and RSUs as their effect would have been anti-dilutive. For the three and nine months ended September 30, 2015, the computation of diluted EPS excluded 8,520,706 shares related to warrants, stock options and RSUs as their effect would have been anti-dilutive.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Operating Leases On June 10, 2016, the Company entered into a lease agreement for approximately 41,400 square feet in San Diego, CA to serve as the Company’s new corporate headquarters. The lease will commence on December 15, 2016 and has a term of approximately 36 months. The monthly rent expense for this lease agreement will be approximately $0.1 million. Legal The Company is, from time to time, party to various legal proceedings arising in the ordinary course of business. For example, the Company is currently named as a defendant or co-defendant in some patent infringement lawsuits in the U.S. and is indirectly participating in other U.S. patent infringement actions pursuant to its contractual indemnification obligations to certain customers. Based on an evaluation of these matters and discussions with the Company’s intellectual property litigation counsel, the Company currently believes that liabilities arising from or sums paid in settlement of these existing matters, if any, would not have a material adverse effect on its consolidated results of operations or financial condition. On September 26, 2016, the Company settled a breach of contract claim alleging that the Company had failed to pay certain royalties on hardware products sold by its subsidiary, Enfora, Inc. Under the terms of the settlement agreement, the Company is required to pay an aggregate settlement amount of $2.8 million, $2.5 million of which remained outstanding as of September 30, 2016, is included in accrued expenses and other current liabilities and in other long-term liabilities in the unaudited condensed consolidated balance sheets, and is payable in eight equal quarterly installments. The contract underlying the claim has now been terminated. Indemnification In the normal course of business, the Company periodically enters into agreements that require the Company to indemnify and defend its customers for, among other things, claims alleging that the Company’s products infringe third-party patents or other intellectual property rights. The Company’s maximum exposure under these indemnification provisions cannot be estimated but the Company does not believe that there are any matters individually or collectively that would have a material adverse effect on its financial condition, results of operation or cash flows.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s effective income tax rate was 4.1% and (0.2)% for the three months ended September 30, 2016 and 2015, respectively, and 1.4% and (0.4)% for the nine months ended September 30, 2016 and 2015, respectively. The Company’s effective income tax rates are significantly lower than the statutory tax rate primarily due to an increase in the Company’s valuation allowance related to its U.S.-based deferred tax amounts, resulting from carryforward net operating losses generated during the three and nine months ended September 30, 2016 and 2015. Pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company’s net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period.

Restructuring

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring

In September 2013, the Company commenced certain restructuring initiatives including the closure of the Company’s development site in Calgary, Canada, and the consolidation of certain supply chain management activities (the “2013 Initiatives”). The 2013 Initiatives are expected to cost a total of approximately $6.6 million and be completed when the facility leases expire in December 2016.

In August 2015, the Company approved a restructuring initiative to better position the Company to operate in current market conditions and more closely align operating expenses with revenues, which included employee severance costs and facility exit related costs. In the fourth quarter of 2015, the Company commenced certain initiatives relating to the reorganization of executive level management, which included, among other actions, the replacement of the former Chief Executive Officer (collectively, the “2015 Initiatives”). The Company continued these initiatives in 2016 with a reduction-in-force and the completion of the closure of its facility in Richardson, TX. The 2015 Initiatives are expected to cost a total of approximately $4.8 million and be completed when the Richardson, TX lease expires in June 2020.

In April 2016, the Company commenced certain restructuring initiatives to consolidate the operations of Ctrack with those of the Company, including the closure of the Company’s manufacturing operations in Durban, South Africa resulting in a reduction-in-force. In July 2016, the Company commenced certain restructuring initiatives intended to improve its strategic focus on its most profitable business lines while de-prioritizing certain hardware-only product lines to non-carrier customers, including a reduction-in-force (collectively with the Durban facility closure, the “2016 Initiatives”). The 2016 Initiatives are expected to cost a total of approximately $0.9 million and were completed in October 2016, subsequent to the balance sheet date.

The following table sets forth activity in the restructuring liability for the nine months ended September 30, 2016 (in thousands):



	Balance at December 31, 2015		Costs Incurred		Payments			Non-cash		Translation Adjustment		Balance at September 30, 2016		Cumulative Costs Incurred to Date
2013 Initiatives
Employee Severance Costs	$	—	$	—	$	—		$	—	$	—	$	—	$	3,986
Facility Exit Related Costs	72		5		(58		)	—		—		19		2,630

2015 Initiatives
Employee Severance Costs	1,330		538		(1,292		)	—		14		590		4,129
Facility Exit Related Costs	328		268		(274		)	159		—		481		649

2016 Initiatives
Employee Severance Costs	—		874		(869		)	—		—		5		874
Total	$	1,730	$	1,685	$	(2,493	)	$	159	$	14	$	1,095	$	12,268

The balance of the restructuring liability at September 30, 2016 consists of approximately $0.8 million in current liabilities and $0.3 million in long-term liabilities.

Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

The information contained herein has been prepared by Novatel Wireless, Inc. (the “Company”) in accordance with the rules of the Securities and Exchange Commission. The information at September 30, 2016 and the results of the Company’s operations for the three and nine months ended September 30, 2016 and 2015 are unaudited. The condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods presented. These condensed consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements from which they were derived and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Except as set forth below, the accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in the Company’s Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for any other interim period or for the year as a whole.

For the three months ended September 30, 2016 and 2015, the Company incurred a net loss of $18.6 million and $20.8 million, respectively. The Company’s ability to transition to attaining profitable operations is dependent upon achieving a level and mix of revenues adequate to support its evolving cost structure. If events or circumstances occur such that the Company does not meet its operating plan as expected, the Company may be required to reduce planned research and development activities, incur additional restructuring charges or reduce other operating expenses which could have an adverse impact on its ability to achieve its intended business objectives. These additional reductions in expenditures, if required, could have an adverse impact on the Company’s ability to achieve certain of its business objectives. The Company’s management believes that its cash and cash equivalents and availability under its senior secured revolving credit facility, together with anticipated cash flows from operations, will be sufficient to meet its working capital needs for the next twelve months and the foreseeable future.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Segment Information

Management has determined that the Company has one reportable segment. The Chief Executive Officer, who is also the Chief Operating Decision Maker, does not manage any part of the Company separately, and the allocation of resources and assessment of performance is based solely on the Company’s consolidated operations and operating results.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ materially from these estimates. Significant estimates include allowance for doubtful accounts receivable, provision for excess and obsolete inventory, valuation of intangible and long-lived assets, valuation of goodwill, valuation of debt obligations, royalty costs, accruals relating to litigation and restructuring, provision for warranty costs, income taxes and share-based compensation expense.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”), which are adopted by the Company as of the specified date. Unless otherwise discussed, management believes the impact of recently issued standards, some of which are not yet effective, will not have a material impact on its unaudited condensed consolidated financial statements upon adoption.

In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of this guidance.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact of this guidance.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which affects entities that issue share-based payment awards to their employees. The guidance is designed to identify areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the impact of this guidance.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. This guidance results in the Company providing a more faithful representation of the rights and obligations arising from operating and capital leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact of this guidance.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected the measurement or recognition of amounts initially recognized. As an alternative, the update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The Company implemented this guidance during the first quarter of 2016. This guidance did not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption.

In April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Under this standard, if a cloud computing arrangement includes a software license, the software license element of the arrangement should be accounted for consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. The Company implemented this guidance during the first quarter of 2016. This guidance did not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which provides guidance for revenue recognition. The new standard will require revenue recognized to represent the transfer of promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date, which deferred the effective date of adoption of ASU 2014-09 to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted but not before the original effective date of December 15, 2016. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies aspects of ASU 2014-09 pertaining to the identification of performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. There are two adoption methods available for implementation of this guidance. Under one method, the guidance is applied retrospectively to contracts for each reporting period presented, subject to allowable practical expedients. Under the other method, the guidance is applied only to the most current period presented, recognizing the cumulative effect of the change as an adjustment to the beginning balance of retained earnings, and also requires additional disclosures comparing the results to the previous guidance. The Company is currently evaluating the adoption methods and assessing the impact of this guidance.

Fair Value Measurement


Level 1:	Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE or NASDAQ). Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:


Level 3:	Pricing inputs include significant inputs that are generally less observable from objective sources, including the Company’s own assumptions.

Acquisitions and Divestitures (Tables)

9 Months Ended

Sep. 30, 2016

Business Acquisition [Line Items]

Business Acquisition, Pro Forma Information



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net revenues	$	60,881		$	70,390		$	190,636		$	214,172
Net loss	$	(18,556	)	$	(14,824	)	$	(33,148	)	$	(35,142	)

DigiCore

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition

The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands):



	October 5, 2015
Cash	$	2,437
Accounts receivable	15,052
Inventory	11,361
Property, plant and equipment	5,924
Rental assets	6,603
Intangible assets	28,270
Goodwill	29,273
Other assets	5,695
Bank facilities	(2,124		)
Accounts payable	(7,446		)
Accrued and other liabilities	(15,018		)
Noncontrolling interests	(39		)
Net assets acquired	$	79,988

Set forth below is supplemental purchase consideration information related to the Ctrack acquisition (in thousands):



Cash payments	$	79,365
Fair value of replacement equity awards issued to Ctrack employees for preacquisition services	623
Total purchase price	$	79,988

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The following table sets forth the components of definite-lived intangible assets acquired in connection with the Ctrack acquisition (in thousands):



	Amount Assigned		Amortization Period (in years)
Developed technologies	$	10,170	6.0
Trade name	14,030		10.0
Customer relationships	4,070		5.0
Total intangible assets acquired	$	28,270

Feeney Wireless

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition

The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands):



	March 27, 2015
Cash	$	205
Accounts receivable	3,331
Inventory	10,008
Property, plant and equipment	535
Intangible assets	18,880
Goodwill	3,949
Other assets	544
Accounts payable	(7,494		)
Accrued and other liabilities	(1,916		)
Deferred revenues	(270		)
Note payable	(2,575		)
Capital lease obligations	(420		)
Net assets acquired	$	24,777

Set forth below is supplemental purchase consideration information related to the FW acquisition (in thousands):



Cash payments	$	9,268
Future issuance of common stock	15,000
Other assumed liabilities	509
Total purchase price	$	24,777

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The following table sets forth the components of intangible assets acquired in connection with the FW acquisition (dollars in thousands):



	Amount Assigned		Amortization Period (in years)
Definite-lived intangible assets:
Developed technologies	$	3,660	6.0
Trademarks	4,700		10.0
Customer relationships	8,500		10.0
Indefinite-lived intangible assets:
In-process research and development	2,020
Total intangible assets acquired	$	18,880

Balance Sheet Details (Tables)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Inventories

Inventories consist of the following (in thousands):



	September 30, 2016		December 31, 2015
Finished goods	$	30,095	$	47,094
Raw materials and components	9,875		8,743
Total inventories	$	39,970	$	55,837

Summary of Accrued Expenses

Accrued expenses and other current liabilities consist of the following (in thousands):



	September 30, 2016		December 31, 2015
Royalties	$	4,125	$	2,740
Payroll and related expenses	6,705		4,406
Warranty obligations	516		932
Market development funds and price protection	2,544		2,805
Professional fees	2,152		1,060
Accrued interest	1,925		274
Deferred revenue	2,168		1,836
Restructuring	829		1,044
Acquisition-related liabilities	7,384		5,274
Divestiture-related liabilities	1,537		—
Other	7,206		5,242
Total accrued expenses and other current liabilities	$	37,091	$	25,613

Summary of Accrued Warranty Obligations

Accrued warranty obligations activity during the nine months ended September 30, 2016 was as follows (in thousands):



Warranty liability at December 31, 2015	$	932
Additions charged to operations	351
Deductions from liability	(767		)
Warranty liability at September 30, 2016	$	516

Fair Value Measurement of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Summary of Company's Financial Instruments, Fair Value on a Recurring Basis



	Balance as of September 30, 2016		Level 1
Assets:
Cash equivalents
Money market funds	$	35	$	35
Total cash equivalents	$	35	$	35



	Balance as of December 31, 2015		Level 1
Assets:
Cash equivalents
Money market funds	$	35	$	35
Total cash equivalents	35		35
Short-term investments	1,267		1,267
Total assets at fair value	$	1,302	$	1,302

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Convertible Debt

The Convertible Notes consisted of the following at September 30, 2016 (in thousands):



Liability component:
Principal	$	120,000
Less: unamortized debt discount and debt issuance costs	(31,204		)
Net carrying amount	$	88,796
Equity component	$	38,305

Interest Expense Summary

The following table sets forth total interest expense recognized related to the Convertible Notes during the three and nine months ended September 30, 2016 and 2015 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Contractual interest expense	$	1,650	$	1,649	$	4,950	$	2,016
Amortization of debt discount	1,980		1,980		5,940		2,420
Amortization of debt issuance costs	132		132		395		161
Total interest expense	$	3,762	$	3,761	$	11,285	$	4,597

Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

The Company included the following amounts for share-based compensation awards in the unaudited condensed consolidated statements of operations (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Cost of revenues	$	49	$	49	$	156	$	107
Research and development	201		196		662		598
Sales and marketing	170		135		593		318
General and administrative	695		874		2,026		2,204
Total	$	1,115	$	1,254	$	3,437	$	3,227

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity:



Outstanding — December 31, 2014	3,064,880
Granted	6,656,737
Exercised	(273,005	)
Canceled	(3,363,776	)
Outstanding — December 31, 2015	6,084,836
Granted	1,051,550
Exercised	(35,196	)
Canceled	(542,237	)
Outstanding — September 30, 2016	6,558,953
Exercisable — September 30, 2016	1,603,054

Summary of Restricted Stock Unit Activity

The following table summarizes the Company’s restricted stock unit (“RSU”) activity:



Non-vested at December 31, 2014	1,628,179
Granted	1,042,659
Vested	(926,308	)
Forfeited	(784,327	)
Non-vested at December 31, 2015	960,203
Granted	2,914,000
Vested	(422,148	)
Forfeited	(244,471	)
Non-vested at September 30, 2016	3,207,584

Geographic Information and Concentrations of Risk (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Schedule of Geographic Concentration of Net Revenues

The following table details the Company’s concentration of net revenues by geographic region based on shipping destination:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
United States and Canada	72.4	%	96.4	%	74.6	%	96.2	%
Latin America	0.2		0.4		0.2		0.6
Europe, Middle East, Africa and other	25.2		2.9		23.5		3.0
Asia and Australia	2.2		0.3		1.7		0.2
	100.0	%	100.0	%	100.0	%	100.0	%

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The calculation of basic and diluted EPS was as follows (in thousands, except share and per share data):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net loss attributable to Novatel Wireless, Inc.	$	(18,567	)	$	(20,847	)	$	(33,172	)	$	(37,893	)
Weighted-average common shares outstanding	53,876,795			55,180,537			53,584,410			51,647,970
Basic and diluted net loss per share	$	(0.34	)	$	(0.38	)	$	(0.62	)	$	(0.73	)

Restructuring (Tables)

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Summary of Restructuring Liability

The following table sets forth activity in the restructuring liability for the nine months ended September 30, 2016 (in thousands):



	Balance at December 31, 2015		Costs Incurred		Payments			Non-cash		Translation Adjustment		Balance at September 30, 2016		Cumulative Costs Incurred to Date
2013 Initiatives
Employee Severance Costs	$	—	$	—	$	—		$	—	$	—	$	—	$	3,986
Facility Exit Related Costs	72		5		(58		)	—		—		19		2,630

2015 Initiatives
Employee Severance Costs	1,330		538		(1,292		)	—		14		590		4,129
Facility Exit Related Costs	328		268		(274		)	159		—		481		649

2016 Initiatives
Employee Severance Costs	—		874		(869		)	—		—		5		874
Total	$	1,730	$	1,685	$	(2,493	)	$	159	$	14	$	1,095	$	12,268

Basis of Presentation Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
Basis of Presentation Narrative (Details) $ in Thousands	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) Segments	Sep. 30, 2015 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss attributable to Novatel Wireless, Inc. \| $	$ (18,567)	$ (20,847)	$ (33,172)	$ (37,893)
Number of reportable segments \| Segments			1

Acquisitions and Divestitures - Narrative - Acquisitions (Details) $ in Thousands, shares in Millions				3 Months Ended		9 Months Ended	12 Months Ended
	Jan. 05, 2016 installment shares	Oct. 05, 2015 USD ($)	Mar. 27, 2015 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jun. 18, 2015 R / shares
Business Acquisition [Line Items]
Acquisition-related liabilities				$ 7,384	$ 5,274	$ 7,384	$ 5,274
DigiCore
Business Acquisition [Line Items]
Voting interests acquired								100.00%
Acquisition share price (ZAR per share) \| R / shares								R 4.40
Cash payments					79,365
Total purchase price		$ 80,000			79,988
Future issuance of common stock					$ 623
DigiCore \| General and Administrative Expense
Business Acquisition [Line Items]
Acquisition costs							1,700
Feeney Wireless
Business Acquisition [Line Items]
Cash payments			$ 9,300				9,268
Total purchase price			24,800				24,777
Escrow amount and certain other pre-closing adjustments			1,500
Other assumed liabilities			500				509
Future issuance of common stock			15,000				15,000
Maximum contingent earn-out			$ 25,000
Acquisition-related liabilities				8,200		8,200
Number of cash installment payments \| installment	5
Period for cash installments	4 years
Issued to former shareholders (shares) \| shares	2.9
Number of share installments \| installment	3
Period for share installments	3 years
Earn-out related expense				1,300		2,100
Feeney Wireless \| Other Liabilities
Business Acquisition [Line Items]
Acquisition-related liabilities				$ 6,700		$ 6,700
Feeney Wireless \| General and Administrative Expense
Business Acquisition [Line Items]
Acquisition costs							$ 900

Acquisitions - Consideration (Details) - USD ($) $ in Thousands			3 Months Ended	12 Months Ended
	Oct. 05, 2015	Mar. 27, 2015	Dec. 31, 2015	Dec. 31, 2015
DigiCore
Business Acquisition [Line Items]
Cash payments			$ 79,365
Future issuance of common stock			623
Total purchase price	$ 80,000		$ 79,988
Feeney Wireless
Business Acquisition [Line Items]
Cash payments		$ 9,300		$ 9,268
Future issuance of common stock		15,000		15,000
Other assumed liabilities		500		509
Total purchase price		$ 24,800		$ 24,777

Acquisitions - Allocation Table (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Oct. 05, 2015	Mar. 27, 2015
Business Acquisition [Line Items]
Goodwill	$ 33,117	$ 29,520
DigiCore
Business Acquisition [Line Items]
Cash			$ 2,437
Accounts receivable			15,052
Inventory			11,361
Property, plant and equipment			5,924
Rental assets			6,603
Intangible assets			28,270
Goodwill			29,273
Other assets			5,695
Bank facilities			(2,124)
Accounts payable			(7,446)
Accrued and other liabilities			(15,018)
Noncontrolling interests			(39)
Net assets acquired			$ 79,988
Feeney Wireless
Business Acquisition [Line Items]
Cash				$ 205
Accounts receivable				3,331
Inventory				10,008
Property, plant and equipment				535
Intangible assets				18,880
Goodwill				3,949
Other assets				544
Accounts payable				(7,494)
Accrued and other liabilities				(1,916)
Deferred revenues				(270)
Note payable				(2,575)
Capital lease obligations				(420)
Net assets acquired				$ 24,777

Acquisitions - Intangibles Table (Details) - USD ($) $ in Thousands			9 Months Ended
	Oct. 05, 2015	Mar. 27, 2015	Sep. 30, 2016
Developed technologies
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization Period (in years)			6 years
DigiCore
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 28,270
DigiCore \| Developed technologies
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 10,170
Amortization Period (in years)	6 years
DigiCore \| Trademarks and Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 14,030
Amortization Period (in years)	10 years
DigiCore \| Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 4,070
Amortization Period (in years)	5 years
Feeney Wireless
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned		$ 18,880
Feeney Wireless \| Developed technologies
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned		$ 3,660
Amortization Period (in years)		6 years
Feeney Wireless \| Trademarks and Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned		$ 4,700
Amortization Period (in years)		10 years
Feeney Wireless \| Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned		$ 8,500
Amortization Period (in years)		10 years
In-process research and development \| Feeney Wireless
Acquired Finite-Lived Intangible Assets [Line Items]
In-process research and development		$ 2,020

Acquisitions - Pro Forma Table (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Net revenues	$ 60,881	$ 70,390	$ 190,636	$ 214,172
Net loss	$ (18,556)	$ (14,824)	$ (33,148)	$ (35,142)

Acquisitions and Divestitures - Narrative - Divestiture (Details) - USD ($) $ in Thousands				3 Months Ended	6 Months Ended	9 Months Ended
	Sep. 29, 2016	Sep. 21, 2016	Apr. 11, 2016	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds		$ 50,000				$ 11,300	$ 0
Gain					$ 6,900	4,500
Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Initial purchase price	$ 11,700		$ 11,000
Proceeds	11,300		9,000
Liabilities settled	400
Receivables	$ 2,100
Decrease to prior period gain				$ (2,400)
Fair value of obligations to be fulfilled by the Company				$ 1,500		$ 1,500
Certain Transition Services
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Receivables			$ 1,000
Payout period			2 years
Satisfaction Of Certain Conditions
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Receivables			$ 1,000
Purchase Of Module Product Inventory
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Receivables			3,800
Purchase Of Module Product Inventory - Certain Transition Services
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Receivables			$ 1,000
Payout period			2 years

Balance Sheet Details - Summary of Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Finished goods	$ 30,095	$ 47,094
Raw materials and components	9,875	8,743
Total inventories	$ 39,970	$ 55,837

Balance Sheet Details - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Royalties	$ 4,125	$ 2,740
Payroll and related expenses	6,705	4,406
Warranty obligations	516	932
Market development funds and price protection	2,544	2,805
Professional fees	2,152	1,060
Accrued interest	1,925	274
Deferred revenue	2,168	1,836
Restructuring	829	1,044
Acquisition-related liabilities	7,384	5,274
Divestiture-related liabilities	1,537	0
Other	7,206	5,242
Total accrued expenses and other current liabilities	$ 37,091	$ 25,613

Balance Sheet Details - Summary of Accrued Warranty Obligations (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Movement in Standard Product Warranty Accrual [Roll Forward]
Warranty liability at December 31, 2015	$ 932
Additions charged to operations	351
Deductions from liability	(767)
Warranty liability at September 30, 2016	$ 516

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Impairment of purchased intangible assets	$ 2,594	$ 0	$ 2,594	$ 0
Developed technologies
Finite-Lived Intangible Assets [Line Items]
Amortization Period (in years)			6 years
Impairment of purchased intangible assets	$ 2,600		$ 2,600

Fair Value Measurement of Assets and Liabilities - Summary of Company's Financial Instruments, Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Jun. 10, 2015
Convertible Debt
Cash equivalents
Principal	$ 120,000		$ 120,000
Stated interest rate of debt issued			5.50%
Fair Value, Measurements, Recurring
Cash equivalents
Cash equivalents	35	$ 35
Assets, Fair Value Disclosure, Recurring		1,302
Fair Value, Measurements, Recurring \| Money market funds
Cash equivalents
Cash equivalents	35	35
Fair Value, Measurements, Recurring \| Short-term investments
Cash equivalents
Short-term investments		1,267
Fair Value, Measurements, Recurring \| Level 1
Cash equivalents
Cash equivalents	35	35
Assets, Fair Value Disclosure, Recurring		1,302
Fair Value, Measurements, Recurring \| Level 1 \| Money market funds
Cash equivalents
Cash equivalents	35	35
Fair Value, Measurements, Recurring \| Level 1 \| Short-term investments
Cash equivalents
Short-term investments		$ 1,267
Fair Value, Measurements, Nonrecurring
Cash equivalents
Fair value of debt	$ 88,800

Debt - Narrative (Details) - USD ($)			9 Months Ended
Debt - Narrative (Details) - USD ($)	Jun. 10, 2015	Oct. 31, 2014	Sep. 30, 2016	Nov. 17, 2015
Debt Instrument [Line Items]
Conversion price ($ per share)	$ 5.00
Convertible Debt
Debt Instrument [Line Items]
Term of debt instrument	5 years
Principal	$ 120,000,000		$ 120,000,000
Debt issuance costs	$ 3,900,000
Stated interest rate of debt issued	5.50%
Long-term debt			$ 88,796,000
Effective interest rate			16.95%
Revolving Credit Facility
Debt Instrument [Line Items]
Term of debt instrument		5 years
Maximum amount of credit facility		$ 25,000,000		$ 48,000,000
Outstanding borrowings under the credit facility			$ 0
Available borrowings			$ 6,900,000
Revolving Credit Facility \| Minimum
Debt Instrument [Line Items]
Margin on LIBOR rate			3.00%
Revolving Credit Facility \| Maximum
Debt Instrument [Line Items]
Margin on LIBOR rate			3.50%
Letter of Credit
Debt Instrument [Line Items]
Maximum amount of credit facility		$ 3,000,000
Available borrowings			$ 700,000

Debt - Components (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 10, 2015
Debt Instrument [Line Items]
Equity component	$ 38,305
Convertible Debt
Debt Instrument [Line Items]
Principal	120,000	$ 120,000
Less: unamortized debt discount and debt issuance costs	(31,204)
Net carrying amount	$ 88,796

Debt - Interest Expense (Details) - Convertible Debt - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Debt Instrument [Line Items]
Contractual interest expense	$ 1,650	$ 1,649	$ 4,950	$ 2,016
Amortization of debt discount	1,980	1,980	5,940	2,420
Amortization of debt issuance costs	132	132	395	161
Total interest expense	$ 3,762	$ 3,761	$ 11,285	$ 4,597

Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Share-based Compensation (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 1,115	$ 1,254	$ 3,437	$ 3,227
Cost of net revenues
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	49	49	156	107
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	201	196	662	598
Sales and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	170	135	593	318
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	695	874	2,026	2,204
Employee Stock Option
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized expense	4,600		$ 4,600
Recognition period			2 years 9 months 18 days
Restricted Stock Units (RSUs)
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized expense	3,700		$ 3,700
Recognition period			2 years 11 months 16 days
Employee Stock Purchase Plans
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 100	$ 100	$ 300	$ 300

Share-based Compensation - Tables (Details) - shares	9 Months Ended	12 Months Ended
Share-based Compensation - Tables (Details) - shares	Sep. 30, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding — beginning balance	6,084,836	3,064,880
Granted	1,051,550	6,656,737
Exercised	(35,196)	(273,005)
Canceled	(542,237)	(3,363,776)
Outstanding — ending balance	6,558,953	6,084,836
Exercisable — September 30, 2016	1,603,054
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-vested — beginning balance	960,203	1,628,179
Granted	2,914,000	1,042,659
Vested	(422,148)	(926,308)
Forfeited	(244,471)	(784,327)
Non-vested — ending balance	3,207,584	960,203

Geographic Information and Concentrations of Risk - Schedule of Geographic Concentration of Net Revenues (Detail) - Net Revenues - Geographic Concentration	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration percentage	100.00%	100.00%	100.00%	100.00%
United States and Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration percentage	72.40%	96.40%	74.60%	96.20%
Latin America
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration percentage	0.20%	0.40%	0.20%	0.60%
Europe, Middle East, Africa and other
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration percentage	25.20%	2.90%	23.50%	3.00%
Asia and Australia
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration percentage	2.20%	0.30%	1.70%	0.20%

Geographic Information and Concentrations of Risk - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net Revenues \| Customer Concentration \| Customer One
Segment Reporting Information [Line Items]
Concentration percentage	55.30%	64.20%	54.60%	56.00%

Earnings Per Share - Earnings Per Basic and Diluted Share Table (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Numerator
Net loss attributable to Novatel Wireless, Inc.	$ (18,567)	$ (20,847)	$ (33,172)	$ (37,893)
Denominator
Weighted-average common shares outstanding (in shares)	53,876,795	55,180,537	53,584,410	51,647,970
Basic and diluted net loss per share (dollars per share)	$ (0.34)	$ (0.38)	$ (0.62)	$ (0.73)

Earnings Per Share - Narrative (Detail) - shares	3 Months Ended		9 Months Ended
Earnings Per Share - Narrative (Detail) - shares	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Anti-dilutive shares	11,653,167	8,520,706	11,653,167	8,520,706

Commitments and Contingencies - Narrative (Details) $ in Millions		9 Months Ended
	Sep. 26, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 10, 2016 ft²
Commitments and Contingencies Disclosure [Abstract]
Area (square feet) \| ft²			41,400
Lease term		36 months
Monthly rent expense		$ 0.1
Settlement amount	$ 2.8
Settlement accrued		$ 2.5

Income Taxes - Additional Information (Detail)	3 Months Ended		9 Months Ended
Income Taxes - Additional Information (Detail)	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Effective tax rate	4.10%	(0.20%)	1.40%	(0.40%)

Restructuring - Summary of Restructuring Liability (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Restructuring Reserve [Roll Forward]
Balance at December 31, 2015	$ 1,730
Costs Incurred	1,685
Payments	(2,493)
Non-cash	159
Translation Adjustment	14
Balance at September 30, 2016	1,095
Cumulative Costs Incurred to Date	12,268
2013 Initiatives \| Employee Severance Costs
Restructuring Reserve [Roll Forward]
Balance at December 31, 2015	0
Costs Incurred	0
Payments	0
Non-cash	0
Translation Adjustment	0
Balance at September 30, 2016	0
Cumulative Costs Incurred to Date	3,986
2013 Initiatives \| Facility Exit Related Costs
Restructuring Reserve [Roll Forward]
Balance at December 31, 2015	72
Costs Incurred	5
Payments	(58)
Non-cash	0
Translation Adjustment	0
Balance at September 30, 2016	19
Cumulative Costs Incurred to Date	2,630
2015 Initiatives \| Employee Severance Costs
Restructuring Reserve [Roll Forward]
Balance at December 31, 2015	1,330
Costs Incurred	538
Payments	(1,292)
Non-cash	0
Translation Adjustment	14
Balance at September 30, 2016	590
Cumulative Costs Incurred to Date	4,129
2015 Initiatives \| Facility Exit Related Costs
Restructuring Reserve [Roll Forward]
Balance at December 31, 2015	328
Costs Incurred	268
Payments	(274)
Non-cash	159
Translation Adjustment	0
Balance at September 30, 2016	481
Cumulative Costs Incurred to Date	649
2016 Initiatives \| Employee Severance Costs
Restructuring Reserve [Roll Forward]
Balance at December 31, 2015	0
Costs Incurred	874
Payments	(869)
Non-cash	0
Translation Adjustment	0
Balance at September 30, 2016	5
Cumulative Costs Incurred to Date	$ 874

Restructuring - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring reserve, current	$ 829	$ 1,044
Restructuring reserve, noncurrent	300
2013 Initiatives
Restructuring Cost and Reserve [Line Items]
Total expected cost	6,600
2015 Initiatives
Restructuring Cost and Reserve [Line Items]
Total expected cost	4,800
2016 Initiatives
Restructuring Cost and Reserve [Line Items]
Total expected cost	$ 900