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xG Technology Inc (NASDAQ:XGTI) Finally Bounces

xG Technology Inc (NASDAQ:XGTI) Finally Bounces
Written by
Alex Carlson
Published on
October 4, 2016
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xG Technology Inc (NASDAQ:XGTI) was on a downtrend for the entire month of September. This comes after the company crashed in July on the back of a public offering, a huge warrant issue, and the impact that both have from a dilution perspective. Now shares have started off October with a big move and investors are asking if the momentum is there to keep XGTI trending higher.First up, a little background on the company. Since its founding in 2002, xG Technology has created a broad portfolio of intellectual property that enables always-available, always-connected and always-secure voice, broadband data and video communications. The company is the developer of xMax, a patented all-IP software-defined cognitive radio network that delivers mission-assured wireless connectivity in any RF environment. xMax provides a solution to the challenges of interoperability, survivability and flexibility in expeditionary and critical communications networks. xMax can be deployed as fixed or mobile infrastructure to enhance and integrate seamlessly with legacy communications systems, both private and commercial. Access and priority can be controlled, and in the event of congestion, failure or denial of access to commercial networks, xMax provides a fully secure, scalable, private and highly resilient network for essential communications – all at zero bandwidth cost.It’s essentially a wireless network portfolio. It targets potential clients like the DoD in an attempt to offer them wireless communications tools that are secure and reliable. It’s picked up a few decent DoD contracts across the last twelve months, primarily revolving around its xMax (lead) product. The latest news from the company is that together with partner Southwest Research Institute, it received a $3.0M award issued by the Defense Information Systems Agency for Prototype Spectrum Sharing Systems for the 2025-2110 MHz Band.

xG said that it "will perform a significant portion of the project, and the award represents a significant milestone in the application of xG's highly unique core technology to Government efforts to permit spectrum sharing between certain government and commercial applications. Government initiatives in spectrum sharing have been identified by xG as a key strategic focus." John Coleman said:

"xG's unique knowledge and expertise in the arenas of spectrum sharing and interference mitigation, together with the Electronic News Gathering (ENG) market leadership of our business unit IMT, make us exceptionally well-positioned to deliver innovation and value in this effort as part of the Southwest Research Institute team. xG believes it can make important contributions to more efficient use of America's valuable spectrum through spectrum sharing technologies."

In August, the company announced second quarter earnings. Revenues for the second quarter came in at $1.65 million, up from $374K a year earlier. The vast majority of these sales derived from equipment sales, and a small portion (circa $60K) came in from engineering services. Net loss for the period hit $4.6 million, up from the $4 million recorded during the same period in 2015.

In January, XGTI competed a deal with Integrated Microwave Technologies. IMT builds products that rely on radio and microwave transmission – primarily camera systems for use in scenarios and environments where high definition recording and instant transfer is necessary. Among the highlights in the second quarter:

  • Expanded the integration of the xMax and IMT business units in sales, marketing, product and technology development and manufacturing operations, which has broadened joint solution revenue opportunities and driven internal efficiencies.
  • The IMT business unit deployed the iSee™ RefCam™ Integrated Sports Camera/Transmitter at the Canadian Hockey League Memorial Cup Tournament.
  • The IMT business unit launched the Mini DirectVu COFDM handheld receiver for use in law enforcement, electronic news gathering and sporting event broadcasting applications.

Going forward, XGTI needs to sign more contracts like it just did and boost revenues. The company has some great technology with over 100 patents and pending patent applications. Management just needs to monetize XGTI’s assets better and deliver. We will be updating our subscribers as soon as we know more. For the latest updates on XGTI, sign up below!Disclosure: We have no position in XGTI and have not been compensated for this article.

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