A contract win announced by xG Technology Inc (NASDAQ:XGTI) had its stock open Monday with a sharp upside gap and close with a gain of 54.86% at $0.446.
Nearly 16 million shares traded after investors savored the prospects from validation of the company’s technology.
The contract, worth $3 million, was awarded by the Defense Information Systems Agency (DISA), to xG jointly with its partner Southwest Research Institute, for Prototype Spectrum Sharing Systems for the 2025-2110 MHz Band.
xG has developed technology that enables always-available, always-connected and always-secure voice, broadband data and video communications. It is said to have over 100 patents and pending patent applications.
The Defense Information Systems Agency (DISA) is a US Department of Defense (DoD) combat support agency that provides information technology (IT) and communications support to the President, Vice President, Secretary of Defense, the military services and the combatant commands.
xG Technology Inc (NASDAQ:XGTI) to gain from contract award
Citing 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 its business unit IMT, John Coleman, President of xG’s Federal Business Unit, said the company could “make important contributions to more efficient use of America’s valuable spectrum through spectrum sharing technologies.”
The company raised about $4.44 million from the public issue in July of underwritten units, each comprising one share of its common stock and 1.25 of a warrant to purchase one share of its common stock at an exercise price of $0.685 per share.
Last October, xG chairman/CEO George Schmitt agreed to convert $500K worth of existing loans due to him from the company into shares at a price of $0.56.
At the current price, even after yesterday’s solid jump, both investors in the July issue and the CEO are under water as far as their investments in xG are concerned.