xG Technology Reports Fourth Quarter 2014 Results

SARASOTA, Fla., March 31, 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 fourth quarter ended December 31, 2014.

Key Recent Accomplishments

• Named George Schmitt CEO
• Appointed General James T. Conway, U.S. Marine Corps (Ret.) to board of directors
• Received FCC certification for CN1300 access point, enabling commercial shipment
• Executed a stock purchase agreement with Lincoln Park Capital, raising $1.3 million
• Subsequent to quarter-end:
  • Raised $2.9 million in capital through Preferred Stock and common equity financings
  • Recorded $265K in cash receipts from Townes Telecommunications from a recently announced purchase order
  • Completed the installation for the Bay Area Regional Interoperable Communications Systems Authority ("BayRICS") that covers parts of three San Francisco Bay Area municipalities: Livermore, Dublin and Pleasanton

George Schmitt, CEO and Board Chairman of xG Technology, said, "xG's team is energized and committed to monetizing our revenue opportunities in the public safety, rural broadband, and government/DoD verticals. From a sales perspective, demonstrations of the xMax system remain in high demand and currently the Company has 31 active proposals with a combined value of $22 million. From a technical perspective, we are working on integrating an LTE-band chip into our xMax system which allows the system to be compatible with FirstNet requirements. From a cost perspective, the right-sizing actions have increased our efficiency and enabled us to pursue growth while conserving our resources."

"For 2015, our objective is to drive revenue generation in order to achieve positive cash flow breakeven," concluded Mr. Schmitt. "Our activity across all markets we're targeting is high, and we are responding to a steadily increasing number of requests for demos and pilots, with two pilots running now. We have decided not to hold a quarterly conference call with analysts and investors partly to save costs  but mostly to focus all our energies on revenue generation. We do plan to resume the practice as soon as practicable. Our entire team is focused on leveraging xMax's unmatched value proposition in solving wireless communications challenges in our target markets."

Review of Results

Total fourth quarter 2014 revenues were $65,000 compared to $374,000 revenue in the fourth quarter of 2013. Revenue generated from equipment sales totaled $15,000, revenue from consulting revenue totaled $50,000.

Fourth quarter operating loss was $5.4 million compared to operating loss of $2.8 million in the fourth quarter of 2013.

Net loss was $5.0 million, or $(0.20) per share compared to $3.8 million, or $(0.25) per share in the fourth quarter of 2013. Weighted average number of shares outstanding for the quarter ended December 31, 2014 was 25.4 million compared to 15.4 million for the quarter ended December 31, 2013.

On November 25, 2014, xG executed a stock purchase agreement for the sale of an aggregate of $1,331,500 of common stock with Lincoln Park Capital Fund, LLC ("LPC"), a Chicago-based institutional investor, certain of the Company's officers and directors, and certain other investors. Under the purchase agreement, dated November 25, 2014, xG sold $625,000 worth of its common stock to LPC at a price of $1.25 per share, $337,500 worth of its common stock to the Affiliate Purchasers at a price of $1.37 per share and $369,500 worth of its common stock to the Other Investors at a price of $1.25 per share pursuant to the Company's current shelf registration statement. No warrants were issued in connection with the transaction.

xG ended fourth quarter 2014 with $758,000 in cash compared to $5.5 million at December 31, 2013.

Subsequent to year end and under the terms of its Form S-3 registration statement filed with the SEC, xG raised $2.9 million in a series of financings, including Series A, B and C Convertible Preferred Stock, Warrants and common stock. Please refer to the Form 10-K filed March 31, 2015 for additional information.

xG continues to actively evaluate 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 year ended December 31, 2014, revenue was $628,000 compared to $406,000 in 2013, of which $423,000 was generated from the sales of equipment and $205,000 from engineering and consulting services agreement.

For the year ended December 31, 2014, net loss was $19.0 million, or $(0.83) per share, compared to net loss of $27.5 million, or $(2.86) per share for the year ended December 31, 2013. The decrease in net loss is due mainly to the one-time agreement with MBTH executed on September 30, 2013 that was not present in 2014 results, increases of inducement expense and interest expenses for 2013.

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 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. 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]         

SOURCE xG Technology, Inc.

Related Links

www.xgtechnology.com