xG Technology Inc. Proposal to cancel AIM admission (2976U)

TIDMXGT TIDMXGTU

RNS Number : 2976U

xG Technology Inc.

29 November 2013

November 29, 2013

xG Technology, Inc.

("xG", "xG Technology" or the "Company")

PROPOSED CANCELLATION OF ADMISSION TO TRADING ON AIM

xG Technology, a developer of wireless communications and spectrum sharing technologies, announces that, following the Company's successful Initial Public Offering on NASDAQ, which closed on July 24, 2013 and the recent successful follow-on offering on NASDAQ, which closed on November 18, 2013, the Company intends to seek xG shareholder approval to delist from AIM (the "Cancellation").

Reasons for the Cancellation of Admission to AIM

The Company and the Directors have identified the following reasons for the Cancellation, which they consider to be in the long-term best interests of the Company and xG shareholders:

The high costs of maintaining the Company's AIM listing.

The Company estimates that the annual costs of maintaining a listing on AIM significantly exceed $250,000 (circa GBP160,000), and these costs are in addition to the high costs of U.S. securities regulatory and other requirements for maintaining the Company's listing in the United States. At this time, the Board has determined that the additional costs associated with maintaining a second listing on AIM are inappropriate.

The need to maintain appropriate liquidity of xG stock.

With the Company's listing on NASDAQ, the Board is concerned that there may not be enough liquidity for xG shares to support trading on two exchanges. The Board believes it is in the best interests of the Company and its shareholders to consolidate the trading of xG shares onto one exchange.

The operational and legal difficulties of being subject to two different regulatory regimes in two different countries, in order to maintain listings on both AIM and the NASDAQ.

The Company now has to comply with the regulatory, reporting and corporate governance requirements of two exchanges in two different countries, whose requirements are sometimes different and/or inconsistent. The Board believes that it is best to remove the requirement of compliance with two different exchanges, as it believes that compliance with one exchange would still supply xG shareholders with proper governance and protection.

The management time taken up with the Company's AIM listing.

The Company currently has a small management team, and this team is managing multiple programs both in the United States and outside the United States for regulatory approval, development and sales of its products. The ongoing regulatory requirements associated with the Company's securities being listed in two countries are diverting a substantial portion of management time and attention which the xG Board believes could more usefully be deployed on the Company's operations.

Circular to xG shareholders and recommendation

Rule 41 of the AIM Rules for Companies ("Rule 41") requires an AIM company that wishes to cancel admission of its securities to trading on AIM to notify such intended cancellation to the public and separately to inform the London Stock Exchange of its preferred cancellation date at least 20 business days prior to such date. Rule 41 also requires that, unless the London Stock Exchange otherwise agrees, the Cancellation must be conditional upon the consent of not less than 75% of shares represented by shareholders voting in a general meeting.

The Company is today sending a circular to xG shareholders which will explain the reasons for the proposed Cancellation and will also convene a Special Meeting of the Company, at which xG shareholders will be asked to vote on a resolution to effect the Cancellation. The Special Meeting will be held on December 20, 2013, thereby allowing Cancellation to become effective on January 3, 2014.

The directors of xG, who, in aggregate, have an interest (directly and indirectly through MB Technology Holding, LLC) in 8,945,139 shares of xG, representing approximately 48.67 per cent. of the Company's issued ordinary share capital, unanimously recommend that all xG shareholders vote in favour of such resolution, as they intend to do in respect of their aggregate holdings of xG shares.

Strategy following the Cancellation from AIM

Should the Cancellation from AIM be approved by xG shareholders, the Company will continue to be subject to the U.S. Securities and Exchange Commission's ("SEC") reporting obligations, and it intends to maintain its NASDAQ listing. The Company will continue to keep xG shareholders informed of the Company's financial and operational performance through ongoing updates in regulatory filings with the SEC, as well as updates in press releases, on the Company's website, (www.xgtechnology.com) and in investor meetings.

Subject to xG shareholder approval of the Cancellation at the General Meeting by the required 75% of shares represented by shareholders voting in a general meeting, it is expected that the admission of the Ordinary Shares to trading on AIM will be cancelled with effect from 7.00 a.m. (London time) on January 3, 2014. Accordingly, the latest date for trading in Ordinary Shares through the market on normal market timings to settle prior to the Cancellation (i.e., to settle on a "T + 3" basis) will be January 2, 2014. Following the Cancellation, there will be no market facility in the UK for dealing in xG shares and xG shareholders wishing to publicly trade their xG shares will need to do so through NASDAQ.

Trading Common Stock following the Cancellation from AIM

All shares of Common Stock that were previously admitted to trading on AIM and entered on the register maintained by Capita Jersey will be placed on the Company's U.S. registrar list. The Company's U.S. transfer agent and registrar will send out physical share certificates to all xG shareholders whose shares were previously entered on the share register maintained by Capita Jersey. In addition, the CREST depository interest facility will be terminated following Cancellation of our admission to AIM, the shares held in such facility shall be withdrawn placed on the Company's U.S. registrar list and the ISIN for the securities previously held in CREST system will be disabled and expired. Any xG shareholder holding a physical certificate should hold on to the certificate until such time as they wish to trade the shares. Any questions regarding the handing in of share certificates or how to electronically deposit shares can be directed to xG's U.S. transfer agent and registrar, Continental Stock Transfer & Trust Company ("Continental Stock"), at [phone]. Continental Stock, or a brokerage firm of your choosing, will be able to further provide you with instructions regarding the process of trading your shares in the United States.

Frequently Asked Questions

Frequently Asked Questions ("FAQs") setting out certain information addressing questions concerning the Company's recent registered initial public offering and trading of the Company's shares on NASDAQ is available on the Company's website (www.xgtechnology.com).

Expected Timetable

 
 Publication of circular and            November 29, 2013 
  Notice of Special Meeting 
 Latest time and date for receipt   2.00 p.m. on December 
  of forms of proxy and CREST                    17, 2013 
  proxy instructions for the 
  Special Meeting 
 Special Meeting                    2.00 p.m. on December 
                                                 20, 2013 
 Result of Special Meeting              December 23, 2013 
  announced 
 Latest date for trading in               January 2, 2014 
  Shares in the Company's Common 
  Stock through the market on 
  normal market timings to settle 
  prior to the Delisting (i.e., 
  to settle on a "T = 3" basis) 
 Cancellation of admission             7.00 am on January 
  of the Company's Shares to                      3, 2014 
  trading on AIM 
 

Notes:

1. Each of the times and dates referred to in this announcement is based on the Company's current expectation and is subject to change. All times are London times.

2. Any changes to the expected timetable will be announced via a Regulatory Information Service.

Contacts:

 
 xG Technology, Inc.             www.xgtechnology.com 
 James Woodyatt, Investor 
  Relations                      [phone] 
 
 Allenby Capital Limited         www.allenbycapital.com 
 (Nominated Adviser and Joint 
  Broker) 
 Nick Naylor                     [phone] 
 Mark Connelly                   [phone] 
 
 First Columbus LLP (Joint       www.first-columbus.com 
  Broker) 
 Chris Crawford                  [phone] 
 
 Fusion PR (Media and Analyst    www.fusionpr.com 
  Relations) 
 David Worthington               [phone] 
 
 LHA (Investor Relations)        www.lhai.com 
 Carolyn Capaccio                [phone] 
                                  [e-mail] 
 

ABOUT XG TECHNOLOGY

xG Technology develops a broad portfolio of intellectual property to make wireless networks more intelligent, accessible, affordable and reliable. The company has created xMax, a patented all-IP cognitive radio technology that enables spectrum sharing. 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 network operators make more efficient use of their spectrum allocations and to create new opportunities for innovation in unlicensed spectrum. The xMax cognitive radio system incorporates advanced optimizing technologies that include spectrum sharing, interference mitigation and self-organizing networks. 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, and its technology is available for licensing in both domestic and foreign markets. xG's shares are currently listed on the NASDAQ Capital Market and on the London Stock Exchange's Alternative Investment Market (AIM). On NASDAQ, xG common stock is traded under the symbol XGTI and xG warrants are traded under the symbol XGTIW. On AIM, xG's unrestricted shares trade under the stock symbol XGTU.L and xG's restricted 'Reg S' shares trade under the stock symbol XGT.L. 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.

This information is provided by RNS

The company news service from the London Stock Exchange

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