xG Technology Inc (NASDAQ:XGTI) announced the pricing of an underwritten public offering with expected total gross proceeds of approximately $10,000,000 before deducting underwriting discounts and commissions and other offering expenses payable by the Company.
The securities offered by the Company consist of 3,800,000 Class A Units, with each Class A Unit consisting of one share of the Company’s common stock and one immediately exercisable five-year warrant to purchase one and one quarter share of common stock with a warrant exercise price of $2.00, and 2,400 Class B Units, with each Class B Unit consisting of one share of the Company’s Series E Convertible Preferred Stock with a stated value of $1,000 and convertible into shares of the Company’s common stock at $2.00 per share and immediately exercisable five-year warrants to purchase one and one quarter shares of common stock for each share of common stock into which the Series E Convertible Preferred Stock is convertible, with a warrant exercise price of $2.00.
The Class A Units were priced at $2.00. The Class B Units were priced at $1,000. The underwriters have been granted a 45-day option to purchase up to an aggregate of an additional 15% of the securities sold in the offering to cover over-allotments, if any. The offering is expected to close on or about December 27, 2016, subject to customary closing conditions. xG’s common stock is listed on the NASDAQ Capital Market under the symbol “XGTI”. The net proceeds of the offering will be used to fund a portion of xG’s previously announced acquisition of Vislink Communications Systems or, if the acquisition is not consummated, for general corporate purposes.
Aegis Capital Corp. is acting as the sole book-running manager for the offering.
A registration statement relating to these securities has been filed with the Securities and Exchange Commission (the “SEC”) and was declared effective on December 20, 2016. (Original Source)
Shares of XG Technology are falling 55.52% to $1.61, or down $2.01 in pre-market trading Wednesday. XGTI has a 1-year high of $34.68 and a 1-year low of $2.02. The stock’s 50-day moving average is $0.59 and its 200-day moving average is $0.53.
On the ratings front, Roth Capital analyst William Gibson reiterated a Hold rating on XGTI, with a price target of $0.50, in a report issued on November 21. The current price target represents a potential downside of 86% from where the stock is currently trading. According to TipRanks.com, Gibson has a yearly average loss of 4.7%, a 42% success rate, and is ranked #3669 out of 4291 analysts.
xG Technology, Inc. engages in the development of patented wireless communications and spectrum sharing technologies. It operates through the following segments: Broadcast, Sports and Entertainment, and Government/Surveillance. The Broadcast segment includes a line of margin receiver products including DR3, crx6, and CIRAS. The Sport and Entertainment segment offers microLite, available in both licensed and unlicensed frequency bands. The Government/Surveillance segment sells IMT, MiniMobile Commander and Mobile Commander.