xG Technology Reports Third Quarter 2014 Results

SARASOTA, Fla., Nov. 3, 2014 /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 third quarter ended September 30, 2014.

Key Recent Accomplishments

• Filed a shelf registration statement on Form S-3 with the SEC, giving xG the opportunity to raise funding when considered appropriate.
• Pursuant to the shelf, executed with Lincoln Park Capital Fund (LPC) two stock purchase agreements totaling up to $16.0 million, including the sale of $1.0 million dollars' worth of xG's common stock to LPC at $2.00 per share.
• Received U.S. FCC certification of its CN3200 Dual Band Routing Modem, allowing xG to begin marketing and delivery of this industry-leading technology.
• Won Broadband Impact Product of the Year at BroadbandVision for its CN3200, which enables the cost-effective delivery of innovative, residential-focused wireless broadband for voice, video and data.
• Subsequent to quarter end, the Company announced that a substantially upgraded version of the new xMax cognitive radio system software product, release 2.6, was available for delivery. Release 2.6 provides an advanced set of performance features and capabilities that enable higher throughput, stronger security, longer range, and enhanced management tools.

John C. Coleman, xG's CEO, stated, "The momentum of sales activity we experienced in the second quarter accelerated into the third in every respect, with 14 demonstrations conducted and 9 proposals currently in the hands of potential customers. We are experiencing strong validation of our new product and software, though converting proposals to orders has proven a lengthier process than any of us would prefer. xG's strategic position – with the world's most interference tolerant cognitive radio that is applicable in multiple end markets based on a low-power spectrum sharing technology – is indisputable.  Our job is to ensure that our value proposition of an exceptional commercial product offering tremendous advantages of size, ease of use, speed of implementation and cost savings translates to revenue in the public safety, rural broadband, utility and government/DoD verticals."

Review of Results

Total third quarter 2014 revenues were $150,000 compared to $33,000 revenue in the third quarter of 2013. Revenue generated from equipment sales totaled $100,000, revenue from consulting revenue totaled $50,000. We did not record additional deferred revenue, which remained at $480,000.

Third quarter operating loss was $4.2 million compared to operating loss of $4.3 million in the third quarter of 2013.

Net loss was $4.3 million, or $(0.18) per share compared to $16.0 million, or $(1.70) per share in the third quarter of 2013. The year ago figure includes $10.1 million, or $(1.07) per share, of expense associated with the independent directors of the Company authorization of a onetime agreement on September 30, 2013, whereby xG issued to MBTH 1,599,453 shares of common stock and a warrant to purchase 1,363,636 shares of our common stock at an exercise price of $6.87 per share for the difference in price between the shares issued to them in March 2013 at a price of $13.30 per share in exchange for the conversion of its 2011 Convertible Note and the $5.50 purchase price for shares sold in our initial public offering in July 2013. Weighted average number of shares outstanding for the quarter ended September 30, 2014 was 24.2 million compared to 9.4 million for the quarter ended September 20, 2013.

xG ended third quarter 2014 with $1.9 million in cash, down from $5.5 million at December 31, 2013.

On August 1, 2014, the Company filed a shelf registration statement on Form S-3 with the SEC to register shares of our common stock for sale, giving us the opportunity to raise funding when considered appropriate at prices and on terms to be determined at the time of any such offerings. Pursuant to the instructions to Form S-3, the Company currently has the ability to sell shares under the shelf registration statement, during any 12-month period, in an amount less than or equal to one-third of the aggregate market value of our common stock held by non-affiliates.

As previously announced, on September 22, 2014, xG entered into a Purchase Agreement with Lincoln Park pursuant to which LPC was offered 500,000 shares of common stock to Lincoln Park at a price of $2.00 per share, for an aggregate purchase price of $1,000,000.

On September 19, 2014, the Company entered into a Purchase Agreement in which Lincoln Park.agreed to purchase up to $15,000,000 of our shares of common stock over a 24-month term. xG is actively evaluating various alternatives of financing in order to obtain additional capital to allow the Company to deliver its products and fulfill its current backlog, including further stock sales.

For the nine months ended September 30, 2014, revenue was $563,000 compared to $33,000 in the first nine months of 2013, of which $408,000 was generated from the sales of equipment and $155,000 from a consulting services agreement.

For the nine months ended September 30, 2014, net loss was $14.0 million, or $(0.64) per share, compared to net loss of $23.7 million, or $(3.11) per share. The decrease in net loss is due mainly to the decrease in inducement expense, interest expense and other expense.

Conference Call

Management will host a conference call to discuss these results today, November 3, 2014 at 5:00 p.m. ET.

To participate in the conference call, please call 888-803-5993 (toll free) or 706-634-5454 (international call-in) and reference code # 20570461. The call is also being webcast at http://www.xgtechnology.com/about-xg-technology/investor-information/. All participants should call or access the website approximately 10 minutes before the conference begins.

For those who cannot listen to the live broadcast, a replay of the call will be available from November 3, 2014 at 8:00 p.m. Eastern Time through November 5, 2014, and can be accessed by dialing (855) 859-2056 or (404) 537-3406, passcode # 70373247. A webcast replay will be available on xG's website for 90 days.

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 over 60 U.S. and over 130 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.

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]         

* Less than $1

SOURCE xG Technology, Inc.

Related Links

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