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&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;b&gt;1. Basis of
Presentation&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"&gt;
&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The information
contained herein has been prepared by Novatel Wireless, Inc. (the
&amp;#x201C;Company&amp;#x201D;) in accordance with the rules of the
Securities and Exchange Commission. The information at
June&amp;#xA0;30, 2013 and the results of the Company&amp;#x2019;s
operations for the three and six months ended June&amp;#xA0;30, 2013
and 2012 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&amp;#x2019;s Annual Report on Form 10-K
for the year ended December&amp;#xA0;31, 2012. The accounting policies
used in preparing these condensed consolidated financial statements
are the same as those described in the Company&amp;#x2019;s 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.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 4%"&gt;
&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Principles
of Consolidation&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"&gt;
&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;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.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 4%"&gt;
&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Use of
Estimates&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"&gt;
&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The preparation
of financial statements in conformity with accounting principles
generally accepted in the United States of America
(&amp;#x201C;GAAP&amp;#x201D;) requires management to make estimates and
assumptions. These estimates and assumptions affect the reported
amounts of assets, liabilities, revenues, expenses and disclosures
of contingent assets and 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, litigation, provision for warranty
costs, income taxes and share-based compensation
expense.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"&gt;
&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;Difficult
global economic conditions, tight credit markets, volatile equity,
foreign currency and energy markets and declines in consumer
spending have combined to increase the uncertainty inherent in
these estimates and assumptions. As future events and their effects
cannot be determined with precision, particularly those related to
the condition of the economy, actual results could differ
significantly from these estimates.&lt;/font&gt;&lt;/p&gt;
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