FOR IMMEDIATE RELEASE

6 May 2008

xG Technology, Inc.

EXERCISE OF OPTIONS

On 18 February 2008 Mr. Mats Wennberg, a director of the Company, gave notice on behalf of Wennberg Industries AB that he wished to exercise the options to acquire 1,500,000 ordinary shares of US$0.01 each in the Company at an exercise price of US$0.27 per ordinary share. The options to be exercised were granted to Wennberg Industries AB on joining the Company prior to the Company being admitted to AIM. Following the exercise of the options, Mr. Wennberg (through his wholly owned company, Wennberg Industries (AB) will be interested in 2,500,000 ordinary shares representing 1.91% of the total issued share capital in the Company.

As the Company has now come out of the closed period due to its earnings release, an application will be made for 1,500,000 ordinary shares of US$0.01 each in the Company, which will rank pari passu with existing ordinary shares, to be admitted to trading on AIM. The new ordinary shares will be issued and trading is expected to commence on or about 12 May 2008.

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.

CONTACTS

Rick Mooers, Chairman and CEO
                        Roger Branton, COO and CFO
                         +44 20-7367-8888
                         www.xgtechnology.com
                          
                         Steve Liebmann, Simon Bloomfield or Chris Price
                         Bankside
                         +44 20-7367-8888
                          
                         Xavier Moreels or Francis Moore
                         ING Bank N.V., London Branch (Nominated Adviser)
                         +44 20-7767-1000

ABOUT XG TECHNOLOGY  

Based in Florida, USA, xG Technology has developed innovative, patented wireless communications technologies which offer the potential to reduce significantly the capital investment in and running costs of wireless voice and data communications services.

XGT has designed a mobile VoIP (Voice over Internet Protocol) base station and handset product line. Branded as xMax, these products are intended for use by regional carriers (internet service providers, competitive local exchange carriers and entrepreneurial parties) seeking to deliver mobile Internet Protocol voice and data services directly to consumers without using the incumbent circuit switched or coaxial cable networks. The xMax system provides extended range of operation and an expected superior handset battery performance. Planned future releases of the xMax product line include integrated video and data applications.

This information is provided by RNS
The company news service from the London Stock Exchange