xG Technology Announces Closing of Public Offering of Common Stock and Warrants to Purchase Common Stock

SARASOTA, Fla., July 24, 2013 /PRNewswire/ --xG Technology, Inc. (Nasdaq: XGTI, XGTIW; AIM: XGTU.L, XGT.L) ("xG" or the "Company"), announced today that it has closed the previously announced underwritten public offering of its common stock and warrants to purchase its common stock.The Company offered 1,337,792 shares of its common stock at $5.50 per share to the public and warrants to purchase 668,896 shares of its common stock to the public, with an exercise price of $6.87 per share. xG received gross proceeds from the offering, before deducting the underwriting discount and estimated offering expenses payable by xG, of approximately $7,364,545.

xG intends to use the proceeds of this offering for general corporate purposes, including working capital, product development, marketing activities, expanding its internal sales organization and further developing sales channels, funding the set-up of contract manufacturing production lines and other capital expenditures.

Feltl and Company Inc. and Aegis Capital Corp. acted as the book-running managers for the offering.

The offering is being made pursuant to a registration statement on Form S-1 that xG Technology has filed with the Securities and Exchange Commission ("SEC") and which is effective. A final prospectus supplement containing important information relating to these securities was filed with the SEC. Copies of the final prospectus supplement relating to these securities may be obtained by contactingFeltl and Company,Inc., Prospectus Department, 800 LaSalle Avenue, Suite2100, Minneapolis, MN 55402, telephone: [phone], e-mail:[e-mail] or Aegis Capital Corp., Prospectus Department, 810 Seventh Avenue, 18th Floor, New York, NY,10019, telephone:[phone]or email: [e-mail] copies of the final prospectus supplement will also be available on the website of the SEC athttp://www.sec.gov.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale is not permitted.The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the preliminary prospectus supplement, the registration statement, or the final prospectus supplement.

About xG Technology

xG Technology is a leading developer of innovative and disruptive communications technologies for wireless networks. Its patented intellectual property portfolio covers a broad range of applications, including smart wireless networks that can help address the global wireless spectrum crisis through advanced technology. xG is commercializing some of these technologies to create xMax, the world's first carrier-class cognitive (i.e. smart) radio network. The Company's technology provides ways to significantly increase the efficient use of spectrum, allowing network operators to offload existing voice or data traffic, reduce dropped calls, and enhance network capacity for their customers. xMax's standards-based IP architecture minimizes network deployment, management and operational costs while simplifying the delivery of high quality fixed and mobile voice and data services. xMax can enhance and extend any wireless network, and provides an economical last mile solution for hard to reach customers and devices. Using field-proven technology, xMax enables the delivery of mobile broadband services to consumers, agencies and enterprises worldwide in both licensed and free unlicensed bands. Based in the USA, xG has over 60 US and more than 140 international patents and pending patent applications. xG's intellectual property is available for licensing in domestic and international markets. For more information, please visit www.xgtechnology.com.

xG Technology is listed on the Nasdaq where it trades under the symbols "XGTI" and "XGTIW," and on the LSE AIM where it trades under the symbols "XGTU.L and XGT.L."

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:

David Worthington
Fusion PR (Media and Analyst Relations)
www.fusionpr.com
[phone]

James Woodyatt
xG Technology, Inc (Investor Relations)
www.xGtechnology.com
[phone]

SOURCE xG Technology, Inc.