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21 May 2007
xG Technology, Inc.
CONVERSION OF US$30 MILLION
OF CONVERTIBLE PREFERRED EQUITY TO COMMON EQUITY IN XG,
SUBJECT TO RESTRICTIONS ON DISPOSAL
xG Technology, Inc. ("xG" or
"the Company") AIM: XGT), the Florida based communications
technology business, is pleased to announce that two
Convertible Preferred Stockholders (holding in aggregate US$30
million of Series A Convertible Preferred Stock) have applied
to convert their shares early into a total of 5,179,926 shares
in the Common Stock of xG. The Company has agreed to allow
this following receipt of the commitment that the holders will
not dispose of any interest in the Common Shares for a period
of one year from conversion (save in limited circumstances,
such as a takeover offer for the Company), without the prior
written consent of Piper Jaffray. In addition, the holders
have also undertaken that they will not dispose of any
interest in the Common Shares for a further period of one year
after the first anniversary of conversion, save in limited
circumstances, except through the Company's broker for the
time being, with a view to maintaining an orderly market in
the Company's shares.
An application will be made for
the 5,179,926 new Common Shares to be admitted to trading on
AIM, which is expected to be effective on 24 May 2007.
Commenting on today's
announcement, Rick Mooers, Chairman and CEO, stated:
"We are delighted that two of
the institutions who were Convertible Preferred Stockholders
have decided to forgo their preferential rights under the
Convertible Preferred Stock and convert their shares to common
equity almost immediately after the capital raise closed. This
shows a high level of confidence in xG, especially as they
have both signed agreements not to dispose of the shares for
at least one year, except in limited circumstances. We have
also received indications from all the other institutions that
subscribed Convertible Preferred Stock that they are likewise
interested in converting on the same terms."
- Ends -
xG is a registered trade
mark of xG Technology, Inc. under US Trade Mark Registration
Number 3039835. xMax is a trademark of xG Technology, Inc.
Enquiries:
Rick Mooers, Chairman and CEO
Roger Branton, CFO
020 7638 9571
Nigel Daly
Piper Jaffray Ltd.
020 3142 8700
Seb Hoyle
Lucie Holloway
Citigate Dewe Rogerson
020 7638 9571
ABOUT XG TECHNOLOGY
XG TECHNOLOGY'S BUSINESS
Based in Florida, USA, xG
Technology has developed innovative technologies that the
directors believe can change the building blocks, capabilities
and economics of the communications industry. Its patented
technologies can be applied to almost any type of
communication including voice, data or video in wired or
wireless form.
As its first vertical
application, xG Technology has designed a mobile VoIP (Voice
over Internet Protocol) base station and handset product line.
Branded as xMax, these products are for use by regional
carriers (internet service providers, competitive local
exchange carriers and entrepreneurial parties) seeking to
deliver mobile Internet Protocol services directly to
consumers without using the incumbent circuit switched or
coaxial cable networks. Future releases of the xMax product
line will expand from mobile VoIP to offer integrated video
and data applications.
MARKET AND COMPETITION
There is a wide variety of
wireless technologies in the marketplace. The Directors
believe that the key issue keeping these technologies from
achieving greater success is the price versus performance of
existing options. xMax changes this price/performance
relationship by enabling the delivery of mobile IP services
with less infrastructure using low-cost and readily available
unlicensed radio spectrum.
xG Technology believes that
xMax is a viable solution for mobile VoIP for a number of
reasons:
- xMax is an IP solution rather
than a circuit switched solution; this is a prerequisite for
handling the VoIP application;
- xMax delivers high speed data in the order of Mbps rather
than Kbps, which is essential for supporting large numbers of
subscribers;
- xMax has a low latency physical layer, resulting in high
network efficiency;
- xMax's signal profile also
allows for improved range/coverage and better signal
penetration, which is essential for maintaining call session
reliability; and
- although this feature is not central to the VoIP application
itself, xG Flash Signal's ability to deliver wireless signals
with far less RF output power than conventional applications
means that wireless VoIP handsets will show improved battery
life over other solutions.
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