The following amendment has been made to the "Capital reorganization, increase in authorized share capital and reduction in par value per share" announcement released on 02 April 2013 at 11:15 under RNS No 3191B.

The ISIN of the restricted XGT.L stock has been amended from US98372A2006 to USU984031216.

All other details remain unchanged.

The full amended text is shown below.

xG Technology, Inc.

("xG Technology" or the "Company")

Capital reorganization, increase in authorized share capital and reduction in par value per share

xG Technology, the developer of a portfolio of wireless communications technologies, including cognitive radio networks, is pleased to announce that, following the receipt of the written consent (in accordance with Delaware law) of the holders of more than fifty per cent. of the voting rights attributable to shares of common stock of the Company and Board approval, the Company is undertaking a capital reorganization of its shares of common stock by way of a reverse stock split (i.e. share consolidation) in the ratio of 1 new share of common stock for every 35 existing shares of common stock held at 5.00pm on April 3, 2013 (the "Capital Reorganization").

In addition, the holders of more than fifty per cent. of the voting rights attributable to shares of common stock of the Company have given their written consent to an increase in the Company's authorized share capital from 250,000,000 shares of common stock to 300,000,000 shares of common stock.  This increase in the Company's authorized share capital facilitated the exercise by MB Technology Holdings, LLC ("MBTH") of its right to convert the $15 million of indebtedness owed by the Company to MBTH, as announced on March 13, 2013.

In addition, written shareholder consent has also been given to a reduction in the par value per share of common stock from $0.01 per share of common stock to $0.00001 per share of common stock.

As a result of the Capital Reorganization and the reduction in par value of the shares of common stock, shareholders in xG Technology will receive 1 new share of common stock of $0.00001 each (a "New Share") for every 35 shares of common stock of $0.01 each previously held. The timetable for the Capital Reorganization is as follows:

·     5.00pm on April 3, 2013 - record date for the calculation of New Shares to be allocated to xG Technology shareholders.

·     8.00am on April 4, 2013 - admission of the New Shares to trading on AIM.

·     By April 18, 2013 - dispatch of definitive share certificates in respect of the New Shares.

Fractional entitlements to New Shares will be aggregated and given to charity.

Following the Capital Reorganization, the Company's total issued share capital consists of 7,313,760 New Shares, each New Share carrying equal voting rights. The Company will hold 2,284 New Shares in treasury. Therefore, the total number of New Shares with voting rights will be 7,311,476. This figure may be used by shareholders of the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company.

Following the Capital Reorganization, existing share certificates concerning the Company's $0.01 shares of common stock will no longer be valid and new share certificates covering the New Shares will be posted to shareholders.

Application has been made for the 7,313,760 New Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will occur on or around April 4, 2013. On Admission, 1,106,607 of the New Shares will trade under the XGTU.L stock symbol with an ISIN of US98372A3095. The remaining 6,207,153 New Shares will trade under the XGT.L stock symbol with an ISIN of USU984031216.

Copies of the shareholder consents are available on the Company's website, www.xgtechnology.com.

END

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ABOUT xG TECHNOLOGY

xG Technology has developed a broad portfolio of innovative intellectual property that we believe will enhance wireless communications. Its patented intellectual property portfolio covers a wide 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, a cognitive, or 'smart', radio network system. The Company's technology provides ways to 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 wireless networks, 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. In the U.S., the Company has 43 patents granted, 16 patent applications pending, and 5 provisional applications pending. Internationally, we have 51 patents granted, 82 patent applications pending, and 10 Patent Cooperation Treaty (PCT) applications. For more information, please visit www.xgtechnology.com.