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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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