xG Technology Reports Second Quarter 2015 Results

SARASOTA, Fla., Aug. 14, 2015 /PRNewswire/ -- xG Technology, Inc. ("xG" or the "Company") (Nasdaq: XGTI, XGTIW), a developer of wireless communications and spectrum sharing technologies, announced its results for the second quarter ended June 30, 2015.

Key Recent Accomplishments

• Received order for approximately $309,000 for xMax mobile broadband wireless equipment and services which will be integrated into a dedicated Telemedicine/Telehealth Systems Network Infrastructure. The initial network—Phase 1—will be built out in St. George's, the capital of Grenada, with a Network Operations Center (NOC) capable of supporting regional expansion and growth throughput CARICOM, the community of 15 nations and dependencies located in the Caribbean.
• Received an order for approximately $100,000 in xMax mobile broadband wireless equipment and services and successfully installed and completed initial deployment of an xMax broadband network in Escazu, Costa Rica from Itellum, LLC, representing the first stage of xMax network deployments that are expected to cover additional areas of Costa Rica, with plans for expansion into other Latin American locations. Subsequently received a follow-on order for approximately $58,000 in xMax mobile broadband wireless equipment and services from Itellum, LLC to further expand the installed footprint.
• Completed successful initial testing of DirectView's body-worn camera integrated with the xMax private mobile broadband technology
• Successfully demonstrated interference mitigation capabilities against sustained electronic attacks (jamming) at the U.S. Special Operations Command's ("USSOCOM") Technical Experimentation Event 15-3 conducted June 14-18 at the Muscatatuck Urban Training Center ("MUTC") in Indiana.
• Made the xMax private wireless broadband system FirstNet-ready, having demonstrated interoperability with the commercial LTE cellular network. FirstNet is the planned U.S. nationwide broadband high-speed network that will be reserved for use by the first responder community, and having a solution which is LTE-capable is a key requirement.
• Entered into a Strategic Technology Alliance Agreement with Radio IP Software, Inc. to co-market each other's respective solutions. xG and Radio IP will make available integrated products that include xMax private mobile broadband network technology and Radio IP's mobile virtual private network (MVPN) solution.

Events Subsequent to Quarter-End:

• Today, xG separately announced the pricing of a public offering of 2,550,000 Class A Units, 2,450,000 Class B Units, 2,550,000 Series C Warrants, and 4,950,000 Series D Warrants. The Company expects to receive approximately $5,000,000 in gross proceeds, before underwriting discounts and commissions and offering expenses payable by the Company. xG intends to use the net proceeds from this offering for general corporate purposes, including working capital, product development, partial reduction of liabilities, marketing activities, expanding its internal sales organization and further developing sales channels, funding the set-up of contract manufacturing production lines and other capital expenditures.
• Effected a 1-for-10 reverse split of its common stock on Friday, July 17, 2015, for trading on July 20, 2015 on a post-split basis.

George Schmitt, CEO and Chairman of the Board of xG Technology, said, "In second quarter 2015, xG not only gained further traction in strategic marketing and uptake by potential customers, we more than doubled last second quarter's revenue level and reduced our operating loss. Today, we completed an equity financing that, while dilutive, fuels our growth efforts at a critical moment in our corporate development. We remain focused on leveraging our competitive positioning and on further monetizing our large market opportunity."

Review of Results

Total second quarter 2015 revenues were $374,000 compared to $163,000 revenue in the second quarter of 2014. Revenue generated from equipment sales totaled $241,000, revenue from consulting revenue totaled $133,000. During the second quarter, we deferred $188,000 (20%) of revenue on the sale of equipment in 2015 to account for when and if available software upgrades, maintenance and post contract customer support provided to customers. The 20% will be recognized over a period of one year.

Second quarter operating loss was $3.9 million compared to operating loss of $4.5 million in the second quarter of 2014.

Net loss was $4.0 million, or $(1.40) per share compared to $4.5 million, or $(1.98) per share in the second quarter of 2014.

Weighted average number of shares outstanding for the quarter ended June 30, 2015 was 4.5 million compared to 2.2 million for the quarter ended June 30, 2014. As of June 30, 2015, all outstanding shares of the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock have been fully converted.

xG ended second quarter 2015 with $156,000 in cash compared to $758,000 at December 31, 2014.

In a press release issued separately today, xG announced the pricing of a public offering of (i) 2,550,000 Class A Units, at a price of $1.00 per Class A Unit, each of which consists of one share of its common stock and 0.5 of a Series A Warrant to purchase one share of its common stock at an exercise price of $1.00 per warrant, (ii) 2,450,000 Class B Units, at a price of $0.99 per Class B Unit, each of which consists of one pre-funded Series B Warrant to purchase one share of its common stock and 0.5 of a Series A Warrant, (iii) 2,550,000 Series C Warrants, at a price of $0.01 per Series C Warrant, which is deemed to be included in the $1.00 price per Class A Unit, each to purchase one additional Class A Unit at an exercise price of $1.00, and (iv) 4,950,000 Series D Warrants, at a price of $0.01 per Series D Warrant, which is deemed to be included in the $0.99 price per Class B Unit, each to purchase one additional Class B Unit at an exercise price of $0.99. The Company expects to receive approximately $5,000,000 in gross proceeds, before underwriting discounts and commissions and offering expenses payable by the Company.

xG intends to use the net proceeds from this offering for general corporate purposes, including working capital, product development, partial reduction of liabilities, marketing activities, expanding its internal sales organization and further developing sales channels, funding the set-up of contract manufacturing production lines and other capital expenditures.

Please see Form S-1/A filed with the Securities and Exchange Commission on August 13, 2015 for further description of these securities.

About xG Technology

xG Technology has created a broad portfolio of intellectual property that makes wireless networks more intelligent, accessible, affordable and reliable. The company has created xMax, a patented all-IP cognitive radio technology that enables robust mobile broadband communications for private, consumer and government networks. xMax can solve the crisis facing the wireless industry caused by data-hungry devices and applications that are straining network capacity. It eliminates the need to acquire scarce and expensive licensed spectrum, thus lowering the total cost of ownership for wireless broadband access. xG's goal is to help wireless broadband networks deliver voice, video and data services to fixed and mobile users. The xMax cognitive radio system incorporates advanced optimizing technologies that include spectrum sharing, interference mitigation, multiple-input multiple-output (MIMO) and software defined radio (SDR). These and other technologies make xMax ideal for wide area, as well as rapid emergency communication deployment. xG offers solutions for numerous industries worldwide, including urban and rural wireless broadband, utilities, defense, emergency response and public safety.

Based in Sarasota, Florida, xG has 50 U.S. and over 100 international patents and pending patent applications. xG is a publicly traded company listed on the NASDAQ Capital Market where xG common stock is traded under the symbol XGTI and xG warrants are traded under the symbol XGTIW. For more information, please visit www.xgtechnology.com.

Cautionary Statement Regarding Forward Looking Statements

Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties.  These statements include but are not limited to statements regarding the intended terms of the offering, closing of the offering and use of any proceeds from the offering. When used herein, the words "anticipate," "believe," "estimate," "upcoming," "plan," "target", "intend" and "expect" and similar expressions, as they relate to xG Technology, Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

For More Information:

Media and Analyst Relations
Daniel Carpini
xG Technology
www.xgtechnology.com
(941) 953-9035

Investor Relations:
James Woodyatt
xG Technology
www.xgtechnology.com  
(954) 572-0395   

Carolyn Capaccio/Jody Burfening
LHA
212-838-3777
[email protected]         

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SOURCE xG Technology, Inc.

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