UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 10-K/A

Amendment No. 1



|(Mark One) |                                                                                     
|---------- | ------------------------------------------------------------------------------------
|x          | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

or



|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from           
to           .



Commission File Number: 333-187094



xG Technology, Inc.

(Exact name of registrant as specified in
its charter)



|Delaware                                                       | 20-5856795                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)



240 S. Pineapple Avenue, Suite 701
Sarasota, FL 34236

(Address of principal executive offices)
(Zip Code)



(Registrant’s telephone number, including
area code): (941) 953-9035



Securities registered pursuant to Section
12(b) of the Act:



|Title of each class:                                      |  | Name of each exchange on which registered:
|--------------------------------------------------------- |  | ------------------------------------------
|Common Stock, par value $0.00001                          |  | The NASDAQ Stock Market LLC               
|Warrant to Purchase Common Stock (expiring July 24, 2018) |  | The NASDAQ Stock Market LLC               



Securities registered pursuant to Section
12(g) of the Act:



None
(Title of class)



Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Act.

YesoNoþ



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YesoNoþ



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YesþNoo



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YesþNoo



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III or this Form 10-K or any amendment to this Form 10-K.o



Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.



|Large accelerated filero                                          |  | Accelerated filero        
|----------------------------------------------------------------- |  | --------------------------
|Non-accelerated filero(Do not check if smaller reporting company) |  | Smaller reporting companyþ



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YesoNoþ



As of June 30, 2016, 827,002 (retroactively
adjusted to reflect the December 15, 2016 one-for-ten reverse stock split) shares of common stock, par value $0.00001 per share,
of the registrant were outstanding. The aggregate market value of the common stock held by non-affiliates of the registrant, as
of June 30, 2016, the last business day of the second fiscal quarter, was approximately $8,645,600 based on the average high and
low price of $11.00 (retroactively adjusted to reflect the December 15, 2016 one-for-ten reverse stock split) for the registrant’s
common stock as quoted on the Nasdaq Capital Market on that date. Shares of common stock held by each director, each officer and
each person who owns 10% or more of the outstanding common stock have been excluded from this calculation in that such persons
may be deemed to be affiliates. The determination of affiliate status is not necessarily conclusive.



The registrant had 11,357,806 shares of
common stock outstanding as of April 27, 2017.



DOCUMENTS INCORPORATED BY REFERENCE

None.











EXPLANATORY NOTE



xG Technology, Inc. (the “Company”)
is filing this Amendment No. 1 (the “Amendment”) to our Annual Report on Form 10-K for the year ended December 31,
2016 as filed on March 31, 2017 (the “Original Report”) to provide the information required by Items 10, 11, 12, 13
and 14 of Part III of Form 10-K.  No changes have been made to the Original Report other than the addition of the Part
III information.



As
required pursuant to the Securities Exchange Act of 1934, as amended, this Amendment also includes updated certifications from
the Company’s Chief Executive Officer and Chief Financial Officer as Exhibits 31.1 and 31.2.



Unless expressly stated, this Amendment
does not reflect events occurring after the filing of the Original Report, nor does it modify or update in any way the disclosures
contained in the Original Report, which speak as of the date of the filing of the Original Report.  Accordingly, this
Amendment should be read in conjunction with the Original Report and our other filings with the Securities and Exchange Commission
subsequent to the filing of the Original Report. The reference on the cover page of the Original Report to the incorporation by
reference of portions of the Company’s Proxy Statement for its 2017 Annual Meeting of Stockholders into Part III of the Original
Report is hereby deleted.





2









xG TECHNOLOGY, INC.
FORM 10-K/A
ANNUAL REPORT
For the Fiscal Year Ended December 31, 2016



TABLE OF CONTENTS





|           |                                                                                                | Page
|---------- | ---------------------------------------------------------------------------------------------- | ----
|PART III   |                                                                                                | 4   
|Item 10.   | Directors, Executive Officers and Corporate Governance                                         |     
|Item 11.   | Executive Compensation                                                                         |     
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |     
|Item 13.   | Certain Relationships and Related Transactions, and Director Independence                      |     
|Item 14.   | Principal Accounting Fees and Services                                                         |     
|PART IV    |                                                                                                | 20  
|Item 15.   | Exhibits, Financial Statement Schedules                                                        |     
|SIGNATURES |                                                                                                | 23  



3







PART III



|Item 10. | Directors, Executive Officers and Corporate Governance
|-------- | ------------------------------------------------------



Executive Officers and Directors



Our executive officers and directors and their ages and positions
are as follows:



|Name of Executive Officer or Director |  | Age |  | Position                                                              |  | Date First Elected or Appointed
|------------------------------------- |  | --- |  | --------------------------------------------------------------------- |  | -------------------------------
|George F. Schmitt                     |  | 73  |  | Executive Chairman of the Board, Director and Chief Executive Officer |  | February 4, 2011               
|Roger G. Branton                      |  | 50  |  | Chief Financial Officer                                               |  | August 26, 2002                
|Belinda Marino                        |  | 57  |  | Secretary                                                             |  | August 20, 2013                
|John C. Coleman                       |  | 63  |  | Director and President of Federal and Expeditionary Business Division |  | January 19, 2011               
|John Payne IV                         |  | 47  |  | President of the IMT Division                                         |  | January 29, 2016               
|James Walton                          |  | 37  |  | President of IMT Ltd.                                                 |  | February 16, 2017              
|Gary Cuccio                           |  | 71  |  | Director                                                              |  | July 18, 2013                  
|Kenneth Hoffman                       |  | 61  |  | Director                                                              |  | July 18, 2013                  
|Richard L. Mooers                     |  | 53  |  | Director                                                              |  | February 4, 2004               
|Raymond M. Sidney                     |  | 46  |  | Director                                                              |  | July 18, 2013                  
|General James T. Conway               |  | 69  |  | Director                                                              |  | January 6, 2015                



George F. Schmitt, Executive Chairman of the Board,
Director and Chief Executive Officer





Mr. Schmitt has over 40 years of broad telecom experience
in wireless and wireline companies and has built wireless networks in a dozen countries. He is a major investor in the Company
through his personal holdings and through his holdings in MBTH and became Executive Chairman of the Board on July 19, 2013 while
previously serving as a director of the Company since February 4, 2011. Mr. Schmitt has been the Chief Executive Officer of the
Company since February 12, 2015. He also previously served as the Chief Executive Officer of MBTH from December 2010 through December
2013. Mr. Schmitt currently sits on the board of directors of SecureAlert, Culient, and the California Thoroughbred Breeders Association.
Mr. Schmitt previously served as a director of TeleAtlas, Objective Systems Integrators, Omnipoint and LHS Group. Mr. Schmitt is
a principal of Sierra Sunset II, LLC and served as a former Trustee of St. Mary’s College. In addition, Mr. Schmitt has served
as a director of many privately held companies including Voice Objects, Knowledge Adventure, Jungo and Cybergate, among others.
Mr. Schmitt has also served as Financial Vice President of Pacific Telesis and chaired the Audit Committees of Objective Systems
Integrations and TeleATLAS. Mr. Schmitt received an M.S. in Management from Stanford University, where he was a Sloan Fellow, and
a B.A. in Political Science from Saint Mary’s College.



Mr. Schmitt was selected to serve on our Board of
Directors (the “Board”) based on his extensive experience with technology and networking companies and broad experience
in the telecommunications industry and his status as a significant investor in our company.



Roger G. Branton, Chief Financial Officer







Mr. Branton serves as Chief Financial Officer of
the Company and together with Richard Mooers co-founded the Company in August 2002. He also serves in similar capacities at MBTH,
a company he co-founded with Richard Mooers and George Schmitt in 2010. Mr. Branton graduated from West Chester University in Pennsylvania
with a Bachelor of Science degree in accounting in 1989. He trained as a certified public accountant until 1992 and then worked
at an investment/merchant bank which specialized in the technology, agriculture, and environmental industries, where his duties
included acting as interim chief financial officer for several companies within its investment portfolio. In 1997, Mr. Branton
co-founded Mooers Branton & Company, an international merchant bank which provides early-stage financing to emerging businesses
in the technology, hospitality, and real estate sectors.





4







Belinda Marino, Secretary





Mrs.
Marino has served as Secretary since August 2013 . Mrs. Marino
is also an employee of the Company serving as the Director of Human Resources since 2006. In addition to the above, Mrs. Marino
has ongoing responsibilities for functions that include corporate banking activities and corporate governance. Mrs. Marino earned
a PHR (Professional in Human Resources) Certificate from the HR Certification Institute in 2009.



John C. Coleman, President of Federal and Expeditionary
Business Division and Director







Mr. Coleman brings to us 35 years of combined experience
in expeditionary operations from both government service and the private sector. Since February 2015, Mr. Coleman has served as
the President for our Federal and Expeditionary Business Division. From June 2010 to February 2015, he served as the Chief Executive
Officer and Chief Operating Officer of the Company. From January 2009 to June 2012, he was the Chief Executive Officer of Joint
Command and Control Consulting (JC3), a consulting services firm he founded that is focused on the development, integration, and
delivery of mature and emerging technologies in support of expeditionary operations, particularly as related to command, control,
and communications. In conjunction with its strategic partners, JC3 provides C4ISR-related systems, service, training, and support
to expeditionary responders, both civil and military. He also served as a Vice-President of Hunter Defense Technology, a position
he held from July 2006 to December 2008. In the 30 years preceding private sector employment, Mr. Coleman served the United States
as a U.S. Marine Officer. Defining the character of his service upon retirement, Mr. Coleman was awarded the nation’s Distinguished
Service Medal, an honor very rarely and only under exceptional circumstance bestowed to Marines below the rank of General Officer.
He retired from the U.S. Marine Corp as a Colonel. He possesses top secret clearance which gives him access to several of our major
markets.



Mr. Coleman was selected to serve on our Board based
on his significant experience with the military and military operations.



John Payne IV, President of the IMT Division





Mr. Payne has served as President of the IMT Division
since January 29, 2016. Mr. Payne was previously the Chief Technology Officer and VP of Engineering from February 2012 to January
2015, and in January 2015 became Chief Operating Officer of IMT through January 2016 while continuing as Chief Technology Officer.
From August 2010 through March 2012, Mr. Payne was the Vice President of Technology for IMT, a Vitec Group company. From 1996 through
August 2010, Mr. Payne worked for Nucomm, Inc. in various positions, including as Vice President of Engineering. Mr. Payne holds
several patents in the area of wireless communications and is considered an industry expert in the wireless video communication
industry related to broadcast television and military and civil manned and unmanned systems. Mr. Payne has a Master of Science
in communication systems from the University of Southern California and a Bachelor of Science in engineering from the Rochester
Institute of Technology.



James Walton, President of  IMT Ltd.



On February 16, 2017, Mr. Walton was appointed
to serve as our President of IMT Ltd., a new entity created by our acquisition of the Vislink Communications Systems division
(“VCS”). From 2012 to February 2017, Mr. Walton was employed at Vislink International Limited, originally serving
as Chief Financial Officer, becoming Chief Operating Officer in January 2015 and then Chief Executive Officer in July 2016. Prior
to Vislink International Limited, Mr. Walton was employed at Atex Group Limited, a private equity-backed software company, serving
as Assistant Group Financial Controller from May 2007 to November 2008, Group Financial Controller from November 2008 to August
2011, and Vice President and Global Finance Director from August 2011 to October 2012. From February 2006 to May 2007, Mr. Walton
was employed at Hutchinson 3G UK Limited, a cellular network provider in Europe. From February 2005 to February 2006, Mr. Walton
served as Assistant Manager at KPMG, a large accounting and auditing firm. Mr. Walton earned a bachelor’s degree in biochemistry
from Newcastle University in 2001, and has been a member of the Institute of Chartered Accountants in England and Wales (ICAEW)
since 2004.



Gary Cuccio, Director





Gary Cuccio has over 35 years of broad operating
experience in wireless, software, engineering, operations, sales and marketing. Mr. Cuccio currently serves as Chairman of Openet
Telecom Ltd. Based in Dublin, Ireland, Openet Telecom is a venture-backed software company providing IP mediation to leading Telco
companies on a global basis. Mr. Cuccio also serves on the board of mBlox as the chairman of its audit committee. mBlox is a venture-backed
startup providing a service bureau for SMS messages in the wireless space. Headquartered in London, England, and Sunnyvale, California,
mBlox operates in Europe, the U.S. and Asia. Previously, Mr. Cuccio was Chief Executive Officer of ATG, a CLEC based in California,
Oregon, and Washington. Prior to ATG, Mr. Cuccio was Chief Executive Officer of LHS group (Nasdaq: LHSG), a Telco billing software
supplier. LHS was acquired by Sema, a French software company, in the third quarter of 2000 for $6.8 billion. Mr. Cuccio was also
Chief Operating Officer of Omnipoint, a PCS mobile wireless carrier. Mr. Cuccio’s experience also includes several positions
held at Airtouch, most notably Vice President of Operations for Europe, Vice President, Asia and President of Airtouch Paging.
The company was merged with Vodafone in 1999. He has also served as chairman of the board and audit committee chairman of privately
held companies and has helped sell and merge several public and privately held companies. Mr. Cuccio started his career with over
27 years at Pacific Tel in Operations, Engineering, Customer Service and Sales & Marketing, ending his tenure there as VP/General
Manager.



Mr. Cuccio received his AMP from Harvard University,
his MBA from St. Mary’s College and his BA in Political Science from California State University Los Angeles.



Mr. Cuccio was selected to serve on our Board based
on his 45 years of experience with technology and communications companies as well as his financial and audit committee background.
Mr. Cuccio qualifies as an “audit committee financial expert” within the meaning of the SEC regulations.





5







Kenneth Hoffman, Director





Mr. Hoffman joined the Company in August 2010 as
an advisor. Ken Hoffman is Vice President of Regulatory Affairs for Florida Power & Light Company (“FPL”), the
rate-regulated subsidiary of NextEra Energy, Inc. (NYSE: NEE), one of the nation’s leading electricity-related services companies.
He is responsible for providing assistance in the management and oversight of FPL’s regulatory activities before state regulators
and the state legislature on energy matters. Mr. Hoffman joined FPL in 2008 after a successful career in private law practice specializing
in the representation of public utilities and telecommunications companies before the Florida Public Service Commission, the Florida
Legislature and the Florida courts. He has over 25 years of experience representing various types of telecommunications carriers
including wireless before regulatory and legislative bodies. His expertise in regulatory proceedings in Florida will be helpful
as we grow and face potential regulatory actions. Prior to joining FPL, he was a shareholder at Rutledge Ecenia Purnell & Hoffman,
PA, in Tallahassee, Florida for 14 years.



Mr. Hoffman was selected to serve on our Board based
on his extensive experience in the utility industry, a key industry segment to utilize our products and services.



Richard L. Mooers, Director





Richard Mooers has been involved in telecommunications
activities for over 20 years and has significant expertise in accounting, risk management, and controls. For the past 11 years
he has served in a variety of positions with our company since its founding in August 2002. Mr. Mooers served as our Executive
Chairman of the Board from inception until July 19, 2013 and continues to serve as a director of the Company, a position he has
held from inception. He also serves as Chairman, Chief Executive Officer and Director of MBTH, a company he co-founded with Roger
Branton and George Schmitt in 2010. Mr. Mooers graduated summa cum laude from the University of Maine, with a Bachelor of Science
degree in business administration in 1985. He remains one of the major investors in the Company.



Mr. Mooers was selected to serve on our Board based
on his extensive experience with technology and telecommunications companies, including as a founder, executive and investor.



Raymond M. Sidney, Director





Dr. Sidney has established several real estate investment
ventures and been involved with a number of companies, including Covia Labs, Hemedex, Edison2 and Commuter Cars as an investor,
board member or advisor. He also serves on the Vision Circle of the X PRIZE Foundation. Prior to this, Dr. Sidney was the second
software engineer hired at Google, Inc. Dr. Sidney previously worked as a security expert and software engineer at RSA Labs and
D.E. Shaw & Co., among other companies. He provided the implementation expertise for RC6, RSA’s candidate cipher for
NIST’s quest for AES, a successor to the Data Encryption Standard. Dr. Sidney attended Caltech and Harvard, and he received
a bachelor’s degree in mathematics from Harvard in 1991. He then entered the graduate program in mathematics at MIT, where
he specialized in cryptography and received a PhD in 1995. His higher mathematics knowledge will be helpful to our development
team. Dr. Sidney’s business experience includes running and investing in startups through his venture capital company, Big
George Ventures. In addition, he is active in many educational and environmental undertakings in the Lake Tahoe area.



Mr. Sidney was selected to serve on our Board based
on his extensive experience with technology companies and broad experience in the venture capital industry.





6







General James T. Conway, Director





General Conway retired from active military duty
in 2010. Since retiring, General Conway has consulted for several corporate and non-profit boards, including Textron Inc., Colt
Defense and General Dynamics. General Conway also co-chairs the Energy Security Leadership Council, a non-partisan energy policy
think tank. Prior to his retirement, General Conway served as the 34th Commandant of the U.S. Marine Corps for four
years. Prior to becoming Commandant, General Conway served for four years on the Joint Chiefs of Staff as Senior Operations Officer
in the U.S. military, where he oversaw the war efforts in Iraq and Afghanistan. As a member of the Joint Chiefs of Staff, General
Conway functioned as a military advisor to the Secretary of Defense, the National Security Council, and the President.



General Conway was selected to serve on our Board
based on his significant experience assessing and implementing military technology operations.



Board of Directors





The Board oversees our business affairs and monitors
the performance of our management. In accordance with our corporate governance principles, the Board does not involve itself in
day-to-day operations. The directors keep themselves informed through discussions with the Chief Executive Officer, other key executives
and by reading the reports and other materials sent to them and by participating in Board and committee meetings. Our directors
hold office until the next Annual Meeting of Stockholders and until their successors are elected and qualified or until their earlier
resignation or removal, or if for some other reason they are unable to serve in the capacity of director.



Our Board currently consists of seven (7) members:
Richard L. Mooers, John C. Coleman, Gary Cuccio, Kenneth Hoffman, George F. Schmitt, Raymond M. Sidney and General James T. Conway.
All of our directors will serve until our next Annual Meeting of Stockholders and until their successors are duly elected and qualified.



Board Committees





Our Board has an Audit Committee, a Compensation
Committee and a Governance and Nominations Committee. Each committee has a charter, which is available on our website at www.xgtechnology.com.
Information contained on our website is not incorporated herein by reference. Each of the board committees has the composition
and responsibilities described below. As of April 27, 2017, the members of these committees are:





|Audit Committee         |  | Compensation Committee   |  | Governance and Nominations Committee
|----------------------- |  | ------------------------ |  | ------------------------------------
|Gary Cuccio*            |  | Gary Cuccio              |  | Gary Cuccio                         
|Kenneth Hoffman         |  | Kenneth Hoffman          |  | Kenneth Hoffman*                    
|General James T. Conway |  | Raymond Sidney           |  | Raymond Sidney                      
|                        |  | General James T. Conway* |  | General James T. Conway             





* Denotes Chairman of Committee.



Audit Committee



We have an Audit Committee established in accordance
with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The members of our
Audit Committee are Gary Cuccio, Kenneth Hoffman and General James T. Conway. Each of these committee members is “independent”
within the meaning of Rule 10A-3 under the Exchange Act and the Marketplace Rules of the Nasdaq Stock Market. Our Board has determined
that Gary Cuccio shall serve as the “audit committee financial expert”, as such term is defined in Item 407(d)(5) of
Regulation S-K. Gary Cuccio currently serves as Chairman of the Audit Committee of mBlox, Inc. and Openet Telecom Ltd. In the past
he also served on the Audit Committee of Objective Systems Integration, Inc. and Affinity Internet, Inc. Gary Cuccio serves as
Chairman of our Audit Committee.



The Audit Committee oversees our accounting and financial
reporting processes and oversees the audit of our financial statements and the effectiveness of our internal control over financial
reporting. The specific functions of the Audit Committee include:





7







| | • | Selecting and recommending to our Board the appointment of an independent registered public accounting firm and overseeing the engagement of such firm;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Approving the fees to be paid to the independent registered public accounting firm;
| | - | -----------------------------------------------------------------------------------



| | • | Helping to ensure the independence of our independent registered public accounting firm;
| | - | ----------------------------------------------------------------------------------------



| | • | Overseeing the integrity of our financial statements;
| | - | -----------------------------------------------------



| | • | Preparing an audit committee report as required by the SEC to be included in our annual proxy statement;
| | - | --------------------------------------------------------------------------------------------------------



| | • | Reviewing
major changes to our auditing and accounting principles and practices as suggested by our Company’s independent registered
public accounting firm, internal auditors (if any) or management;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Reviewing and approving all related party transactions; and
| | - | -----------------------------------------------------------



| | • | Overseeing our compliance with legal and regulatory requirements.
| | - | -----------------------------------------------------------------



Compensation Committee



The members of our Compensation Committee are Gary
Cuccio, Kenneth Hoffman, Raymond Sidney and General James T. Conway. Each such member is “independent” within the meaning
of the Marketplace Rules of the Nasdaq Stock Market. In addition, each member of our Compensation Committee qualifies as a “non-employee
director” under Rule 16b-3 of the Exchange Act. Our Compensation Committee assists the Board in the discharge of its responsibilities
relating to the compensation of the members of the Board and our executive officers. General James T. Conway serves as Chairman
of our Compensation Committee.



The Compensation Committee’s compensation-related
responsibilities include:



| | • | Assisting our Board in developing and evaluating potential candidates for executive positions and overseeing the development of executive succession plans;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Reviewing and approving on an annual basis the corporate goals and objectives with respect to compensation for our Chief Executive Officer;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| | • | Reviewing, approving and recommending to our Board on an annual basis the evaluation process and compensation structure for our other executive officers;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Providing oversight of management’s decisions concerning the performance and compensation of other company officers, employees, consultants and advisors;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Reviewing our incentive compensation and other stock-based plans and recommending changes in such plans to our Board as needed, and exercising all the authority of our Board with respect to the administration of such plans;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Reviewing and recommending to our Board the compensation of independent directors, including incentive and equity-based compensation; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| | • | Selecting, retaining and terminating such compensation
        consultants, outside counsel and other advisors as it deems necessary or appropriate.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



Governance and Nominations Committee



The members of our Governance and Nominations Committee
are Gary Cuccio, Kenneth Hoffman, Raymond Sidney and General James T. Conway. Each such member is “independent” within
the meaning of the Marketplace Rules of the Nasdaq Stock Market. The purpose of the Governance and Nominations Committee is to
recommend to the Board nominees for election as directors and persons to be elected to fill any vacancies on the Board, develop
and recommend a set of corporate governance principles and oversee the performance of the Board. Kenneth Hoffman serves as chairman
of our Governance and Nominations Committee.





8







The Governance and Nominations Committee’s
responsibilities include:



| | • | Selecting director nominees. The Governance and Nominations Committee recommends to the Board nominees for election as directors at any meeting of stockholders and nominees to fill vacancies on the Board. The Governance and Nominations Committee will consider candidates proposed by stockholders and will apply the same criteria and follow substantially the same process in considering such candidates as it does when considering other candidates. The Governance and Nominations Committee may adopt, in its discretion, separate procedures regarding director candidates proposed by our stockholders. Director recommendations by stockholders must be in writing, include a resume of the candidate’s business and personal background and include a signed consent that the candidate would be willing to be considered as a nominee to the Board and, if elected, would serve. Such recommendation must be sent to the Company’s Secretary at the Company’s executive offices. When it seeks nominees for directors, our Governance and Nominations Committee takes into account a variety of factors including (a) ensuring that the Board, as a whole, is diverse and consists of individuals with varied and relevant career experience, relevant technical skills, industry knowledge and experience, financial expertise (including expertise that could qualify a director as a “financial expert”, as that term is defined by the rules of the SEC), local or community ties and (b) minimum individual qualifications, including strength of character, mature judgment, familiarity with the Company’s business and industry, independence of thought and an ability to work collegially. The Company is of the view that the continuing service of qualified incumbents promotes stability and continuity in the board room, contributing to the ability of the Board to work as a collective body, while giving the Company the benefit of the familiarity and insight into the Company’s affairs that its directors have accumulated during their tenure. Accordingly, the process of the Governance and Nominations Committee for identifying nominees reflects the Company’s practice of re-nominating incumbent directors who continue to satisfy the committee’s criteria for membership on the Board whom the committee believes continue to make important contributions to the Board and who consent to continue their service on the Board. The Board has not adopted a formal policy with respect to its consideration of diversity and does not follow any ratio or formula to determine the appropriate mix; rather, it uses its judgment to identify nominees whose backgrounds, attributes and experiences, taken as a whole, will contribute to the high standards of board service. The Governance and Nominations Committee may adopt, and periodically review and revise as it deems appropriate, procedures regarding director candidates proposed by stockholders;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | • | Reviewing requisite skills and criteria for new Board members and Board composition. The Governance and Nominations Committee reviews with the entire Board, on an annual basis, the requisite skills and criteria for Board candidates and the composition of the Board as a whole;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Hiring of search firms to identify director nominees. The Governance and Nominations Committee has the authority to retain search firms to assist in identifying Board candidates, approve the terms of the search firm’s engagement, and cause the Company to pay the engaged search firm’s engagement fee;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Selection of committee members. The Governance and Nominations Committee recommends to the Board on an annual basis the directors to be appointed to each committee of the Board;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Evaluation of the Board. The Governance and Nominations Committee will oversee an annual self-evaluation of the Board and its committees to determine whether it and its committees are functioning effectively;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | • | Development of corporate governance guidelines. The Governance and Nominations Committee will develop and recommend to the Board a set of corporate governance guidelines applicable to the Company.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Governance and Nominations Committee may delegate
any of its responsibilities to subcommittees as it deems appropriate. The Governance and Nominations Committee is authorized to
retain independent legal and other advisors and conduct or authorize investigations into any matter within the scope of its duties.



Family Relationships



There are no relationships between any of the officers
or directors of the Company.





9







Involvement in Certain Legal Proceedings



To the best of our knowledge, none of our directors
or executive officers has, during the past ten (10) years:



| | • | Been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two (2) years prior to that time;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Except as set forth in our discussion below in “Certain
Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions
with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the
rules and regulations of the SEC.



Leadership Structure of the Board



The Board does not currently have a policy on whether
the same person should serve as both the Chief Executive Officer and Chairman of the Board or, if the roles are separate, whether
the Chairman of the Board should be selected from the non-employee directors or should be an employee. The Board believes that
it should have the flexibility to make these determinations at any given point in time in the way that it believes best to provide
appropriate leadership for the Company at that time. Our current Chairman of the Board, Mr. George F. Schmitt, also serves as our
Chief Executive Officer.



Risk Oversight



The Board oversees risk management directly and through
its committees associated with their respective subject matter areas. Generally, the Board oversees risks that may affect the business
of the Company as a whole, including operational matters. The Audit Committee is responsible for oversight of the Company’s
accounting and financial reporting processes and also discusses with management the Company’s financial statements, internal
controls and other accounting and related matters. The Compensation Committee oversees certain risks related to compensation programs
and the Governance and Nominations Committee oversees certain corporate governance risks. As part of their roles in overseeing
risk management, these committees periodically report to the Board regarding briefings provided by management and advisors as well
as the committees’ own analysis and conclusions regarding certain risks faced by the Company. Management is responsible for
implementing the risk management strategy and developing policies, controls, processes and procedures to identify and manage risks.





10







Code of Ethics



The Board has adopted a Code of Business Ethics and
Conduct (the “Code of Conduct”) which constitutes a “code of ethics” as defined by applicable SEC rules
and a “code of conduct” as defined by applicable rules of the Nasdaq Stock Market. We require all employees, directors
and officers, including our principal executive officer and principal financial officer, to adhere to the Code of Conduct in addressing
legal and ethical issues encountered in conducting their work. The Code of Conduct requires that these individuals avoid conflicts
of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner and otherwise
act with integrity. The Code of Conduct contains additional provisions that apply specifically to our Chief Executive Officer,
Chief Financial Officer and other finance department personnel with respect to accurate reporting. The Code of Conduct is available
on our website at www.xgtechnology.com. The Company will post any amendments to the Code of Conduct, as well as any waivers
that are required to be disclosed by the rules of the SEC on such website. Information contained on our website is not a part of,
and is not incorporated into, this report, and the inclusion of our website address in this report is an inactive textual reference
only.



Section 16(a) Beneficial
Ownership Reporting Compliance



Section 16(a) of the Exchange Act requires the Company’s
directors and executive officers, and persons who own more than ten percent (10%) of the Company’s common stock, to file
with the SEC the initial reports of ownership and reports of changes in ownership of common stock. Officers, directors and greater
than ten percent (10%) stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.



Specific due dates for such reports have been established
by the SEC, and the Company is required to disclose in this report any failure to file reports by such dates during fiscal year
2016. Based solely on its review of the copies of such reports received by it, or written representations from certain reporting
persons that no Forms 5 were required for such persons, the Company believes that during the fiscal year ended December 31, 2016,
there was no failure to comply with Section 16(a) filing requirements applicable to its executive officers, directors or ten percent
(10%) stockholders other than as listed in the table below:



|Name            |  | Number of LateReports |  | Description                                                                                                                 
|--------------- |  | --------------------- |  | ----------------------------------------------------------------------------------------------------------------------------
|Roger Branton   |  | 3                     |  | 3 transactions were not reported on a timely basis (upon the acquisition of shares).                                        
|James Woodyatt  |  | 7                     |  | 7 transactions were not reported on a timely basis (4 upon the acquisition of shares 3 upon the disposition of shares).     
|Gary Cuccio     |  | 2                     |  | 2 transactions were not reported on a timely basis (upon the acquisition of shares).                                        
|George Schmitt  |  | 3                     |  | 3 transactions were not reported on a timely basis (upon the acquisition of shares).                                        
|Kenneth Hoffman |  | 2                     |  | 2 transactions were not reported on a timely basis (upon the acquisition of shares).                                        
|Richard Mooers  |  | 6                     |  | 6 transactions were not reported on a timely basis (upon the acquisition of shares).                                        
|Raymond Sidney  |  | 2                     |  | 2 transactions were not reported on a timely basis (upon the acquisition of shares).                                        
|Belinda Marino  |  | 5                     |  | 5 transactions were not reported on a timely basis (3 upon the acquisition of shares and 2 upon the disposition of shares). 
|John Coleman    |  | 13                    |  | 13 transactions were not reported on a timely basis (11upon the acquisition of shares and 2 upon the disposition of shares).



|Item 11. | Executive Compensation
|-------- | ----------------------



Summary Compensation Table for Fiscal Years 2016 and 2015:



The following table summarizes information regarding
the compensation awarded to, earned by or paid to, our Executive Chairman of the Board, Chief Executive Officer, Chief Financial
Officer and our two other most highly compensated executive officers during fiscal year 2016 and 2015. We refer to these individuals,
namely, George F. Schmitt, Roger G. Branton, John C. Coleman and James Woodyatt, as our named executive officers (“Named
Executive Officers”) in this report.





11







|Name
    and Principal Position                  |  | Fiscal
    Year |      |  | Salary
    ($) |  |         | Bonus
    ($) |  |  | Stock
    Awards ($) |  |  | OptionAwards($)
    (1) |   |  | Non-Equity
    Incentive Plan Compensation ($) |  |        | Non-qualified
    Deferred Compensation Earnings ($) |  |  | All
    OtherCompensation($) (2) |  |  | Total
    ($) |  
|------------------------------------------------ |  | --------------- | ---- |  | -------------- |  | ------- | ------------- |  |  | -------------------- |  |  | ----------------------- | - |  | ---------------------------------------------- |  | ------ | ---------------------------------------------------- |  |  | -------------------------------- |  |  | ------------- | -
|George
    F. Schmitt,Executive
    Chairman (3) |  |                 | 2016 |  |                |  | 300,000 |               |  |  | 0                    |  |  |                         | 0 |  |                                                |  | 12,924 |                                                      |  |  | —                                |  |  |               | —
|                                                 |  |                 | 2015 |  |                |  | 187,500 |               |  |  | 0                    |  |  |                         | 0 |  |                                                |  | 26,636 |                                                      |  |  | —                                |  |  |               | —
|                                                 |  |                 |      |  |                |  |         |               |  |  |                      |  |  |                         |   |  |                                                |  |        |                                                      |  |  |                                  |  |  |               |  
|John
    C. Coleman, President, Federal          |  |                 | 2016 |  |                |  | 250,000 |               |  |  | 0                    |  |  |                         | 0 |  |                                                |  | 12,924 |                                                      |  |  | —                                |  |  |               | —
|                                                 |  |                 | 2015 |  |                |  | 250,000 |               |  |  | 0                    |  |  |                         | 0 |  |                                                |  | 26,636 |                                                      |  |  | —                                |  |  |               | —
|                                                 |  |                 |      |  |                |  |         |               |  |  |                      |  |  |                         |   |  |                                                |  |        |                                                      |  |  |                                  |  |  |               |  
|Roger
    G. Branton, Chief Financial Officer    |  |                 | 2016 |  |                |  | 240,000 |               |  |  | 0                    |  |  |                         | 0 |  |                                                |  | 12,924 |                                                      |  |  | —                                |  |  |               | —
|                                                 |  |                 | 2015 |  |                |  | 240,000 |               |  |  | 0                    |  |  |                         | 0 |  |                                                |  | 26,636 |                                                      |  |  | —                                |  |  |               | —
|                                                 |  |                 |      |  |                |  |         |               |  |  |                      |  |  |                         |   |  |                                                |  |        |                                                      |  |  |                                  |  |  |               |  
|James
    Woodyatt,President(
    4)             |  |                 | 2016 |  |                |  | 169,454 |               |  |  | 0                    |  |  |                         | 0 |  |                                                |  | 12,924 |                                                      |  |  | —                                |  |  |               | —
|                                                 |  |                 | 2015 |  |                |  | 210,000 |               |  |  | 0                    |  |  |                         | 0 |  |                                                |  | 26,636 |                                                      |  |  | —                                |  |  |               | —



| | (1) | Amounts
relate to grants of stock options made under the 2013 Stock Incentive Plan. With respect to each stock option grant, the amounts
disclosed generally reflect the grant date fair value computed in accordance with FASB ASC Topic 718 “Stock Compensation”.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Includes
employer-paid insurance and, for Mr. Coleman, a housing allowance.
| | --- | ---------------------------------------------------------------------------



| | (3) | Mr.
Schmitt became Executive Chairman of the Board on July 19, 2013. On February 17, 2015, the Board appointed Mr. Schmitt to the
role of Chief Executive Officer.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Mr.
Woodyatt resigned as President of the Company as of September 30, 2016.
| | --- | ---------------------------------------------------------------------------



Employment Agreements



Following
our acquisition of VCS on February 2, 2017, the Company assumed all of the rights and obligations of James Walton’s Service
Agreement with Vislink International Limited, dated October 19, 2015 (the “Walton Employment Agreement”). The Walton
Employment Agreement provides for an indefinite term unless terminated by Mr. Walton or the Company. Pursuant to the terms of the
Walton Employment Agreement, the Company will pay Mr. Walton an annual base salary, which currently is £160,000, subject
to annual review. Mr. Walton is eligible for a targeted cash bonus based upon various performance standards. Mr. Walton is
also entitled to reimbursement for certain work-related expenses incurred by him, as well as certain insurance benefits.



The Walton Employment Agreement may be terminated
either by him or by the Company upon the delivery of six months’ prior written notice. The Company may terminate Mr. Walton’s
employment for cause or without cause with prior written notice, or upon the payment of certain compensation by the Company to
Mr. Walton in lieu of prior written notice.





12







Outstanding Equity Awards at 2016 Fiscal Year End



As of December 31, 2016, there were no outstanding stock options
held by our Named Executive Officers. In addition, on February 16, 2017, the Board approved the cancellation of all outstanding
stock options of the Company as the stock options were all out of the money.



Director Compensation



The Company compensates our non-employee directors
on a negotiated basis including expenses for their service. Each of these directors received compensation in the amount of $15,000
annually payable quarterly or the same value in shares of the Company, based on the director’s determination. In addition,
they received awards of 12 options in September 2012 with a strike price of $18,900 and 9 options in November 2013 with a strike
price of $1,956. Each award has a vesting schedule of one-third vesting each year on the anniversary date over three (3) years.
On June 1, 2015, the directors each received awards of 13 options with a strike price of $300. This award has a vesting schedule
of 50% vesting each year on the anniversary date over two (2) years. No options were issued in 2016. The table below summarizes
the compensation earned by our independent directors for the fiscal year ended December 31, 2016.



|Name                    |  | Fees earned or paid in cash ($) |        |  | Stock Awards ($) |  |        | Option
    Awards(1) ($) |  |  | Non-equity incentive plan compensation ($) |  |  | Change in pension value and nonqualified deferred compensation earnings ($) |   |  | All Other Compensation ($) |  |   | Total ($) | 
|----------------------- |  | ------------------------------- | ------ |  | ---------------- |  | ------ | ------------------------ |  |  | ------------------------------------------ |  |  | --------------------------------------------------------------------------- | - |  | -------------------------- |  | - | --------- | 
|Gary Cuccio             |  |                                 | 0      |  |                  |  | 15,000 |                          |  |  | 1,707                                      |  |  |                                                                             | 0 |  |                            |  | 0 |           | 
|Kenneth Hoffman         |  |                                 | 0      |  |                  |  | 15,000 |                          |  |  | 1,707                                      |  |  |                                                                             | 0 |  |                            |  | 0 |           | 
|Raymond Sidney          |  |                                 | 0      |  |                  |  | 15,000 |                          |  |  | 1,707                                      |  |  |                                                                             | 0 |  |                            |  | 0 |           | 
|General James T. Conway |  |                                 | 15,000 |  |                  |  | 0      |                          |  |  | 1,707                                      |  |  |                                                                             | 0 |  |                            |  | 0 |           | 





| | (1) | Amounts relate to grants of stock options made under
the 2013 Stock Incentive Plan. With respect to each stock option grant, the amounts disclosed generally reflect the grant date
fair value computed in accordance with FASB ASC Topic 718 “Stock Compensation”.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





Pension Benefits



We do not have any defined pension
plans.



Potential Payments upon Termination
or Change in Control



Our executive employment agreements
do not call for any potential payments upon termination or change in control.



|Item 12. | Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------



Security Ownership
of Certain Beneficial Owners and Management



The following table sets forth, as of April 27, 2017,
information regarding beneficial ownership of our capital stock by:



| | • | Each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock;
| | - | --------------------------------------------------------------------------------------------------------------



| | • | Each of our Named Executive Officers;
| | - | -------------------------------------



| | • | Each of our directors; and
| | - | --------------------------



| | • | All of our current executive officers and directors as a group.
| | - | ---------------------------------------------------------------





13







Beneficial ownership is determined according to the
rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared
voting or investment power of that security, including options that are currently exercisable or exercisable within sixty (60)
days of April 27, 2017. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that
the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown that
they beneficially own, subject to community property laws where applicable.



Common stock subject to stock options currently exercisable
or exercisable within sixty (60) days of April 27, 2017 are deemed to be outstanding for computing the percentage ownership of
the person holding these options and the percentage ownership of any group of which the holder is a member but are not deemed outstanding
for computing the percentage of any other person.



Unless otherwise indicated, the address of each beneficial
owner listed in the table below is c/o xG Technology, Inc., 240 S. Pineapple Avenue, Suite 701, Sarasota, Florida 34236.

|Name and Address of Beneficial Owner:                         |  | Amount and Nature of Beneficial Ownership |         |  | Percent ofClass ofCommonStock(1) | 
|------------------------------------------------------------- |  | ----------------------------------------- | ------- |  | -------------------------------- | 
|5% Stockholders:                                              |  |                                           |         |  |                                  | 
|None                                                          |  |                                           |         |  |                                  | 
|Named Executive Officers and Directors:                       |  |                                           |         |  |                                  | 
|George F. Schmitt(2)                                          |  |                                           | 222,890 |  |                                  | 
|Roger G. Branton(3)                                           |  |                                           | 25,606  |  |                                  | 
|John C. Coleman(4)                                            |  |                                           | 17,813  |  |                                  | 
|John Payne IV                                                 |  |                                           | —       |  |                                  | 
|Belinda Marino(5)                                             |  |                                           | 7       |  |                                  | 
|Gary Cuccio(6)                                                |  |                                           | 7,872   |  |                                  | 
|Richard L. Mooers(7)                                          |  |                                           | 62,128  |  |                                  | 
|Ken Hoffman(8)                                                |  |                                           | 7,868   |  |                                  | 
|Raymond M. Sidney(9)                                          |  |                                           | 7,868   |  |                                  | 
|General James T. Conway                                       |  |                                           | —       |  |                                  | 
|James Walton                                                  |  |                                           | —       |  |                                  | 
|All Executive Officers and Directors as a Group (11 Persons): |  |                                           | 328,778 |  |                                  | 



| | * | Less
than 1%
| | - | ------------



| | (1) | Based
on 11,357,806 shares of common stock issued and outstanding as of April 27, 2017. Shares of common stock subject to options or
warrants currently exercisable or exercisable within sixty (60) days are deemed outstanding for purposes of computing the percentage
of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any
other person.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Includes
211,974 shares of common stock and 2,288 shares of common stock underlying options and warrants that are presently exercisable
andheld directly by Mr. Schmitt,
and 8,628 shares of common stock and 1,768 shares of common stock underlying options and warrants that are presently exercisable
and beneficially owned through MB Technology Holdings, LLC (“MBTH”). Mr. Schmitt has a direct 36.84% ownership interest
in MBTH. In addition, Mr. Schmitt, through his employment agreement as Chief Executive Officer of MBTH, has been granted an option
to purchase MBTH shares sufficient to give him five percent (5%) of the equity ownership of MBTH shares, based on MBTH’s
total capitalization as of the date of execution of his employment agreement with MBTH and fully diluted to incorporate all shares
issued and amounts paid in the exercise of such options.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Includes
15,087 shares of common stock and 123 shares of common stock underlying options and warrants that are presently exercisable, beneficially
owned through Branton Partners, LLC, of which various family entities, including Mr. Branton’s spouse, children and trusts
for the benefit of Mr. Branton’s children, beneficially own 100%, 12 shares of common stock beneficially owned through Mooers
Branton and Company (“MBC”), of which Mr. Branton is a 20% owner, and 8,628 shares of common stock and 1,768 shares
of common stock underlying options and warrants that are presently exercisable, beneficially owned through MBTH. Mr. Branton beneficially
holds 20% of the issued share capital of MB Merchant Group, LLC (“MBMG”), which has a 45.85% ownership interest in
MBTH.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Includes
17,808 shares of common stock and 5 shares of common stock underlying options and warrants that are presently exercisable. Includes
10 shares of common stock owned by Mr. Coleman’s wife.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Includes
7 shares of common stock.
| | --- | ----------------------------------



| | (6) | Includes
7,872 shares of common stock.
| | --- | --------------------------------------



| | (7) | Includes
51,666 shares of common stock. Mr. Mooers’ family entities and trusts for the benefit of his and his wife’s children
hold 80% of the share capital of MBMG and MBC. MBTH owns 8,628 shares of common stock and 1,768 shares of common stock underlying
options that are presently exercisable. MBMG owns 45.85% of MBTH. MBC directly owns 12 shares of common stock.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | Includes
7,868 shares of common stock.
| | --- | --------------------------------------



| | (9) | Includes
7,868 shares of common stock.
| | --- | --------------------------------------





14







Equity Compensation Plan
Information as of December 31, 2016



|Plan Category                                              |  | Number of Securities to be Issued upon Exercise of Outstanding Options |   |  | Weighted Average Exercise Price of Outstanding Options |   |   | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) (5) | 
|---------------------------------------------------------- |  | ---------------------------------------------------------------------- | - |  | ------------------------------------------------------ | - | - | ----------------------------------------------------------------------------------------------------------------------------------------------- | 
|                                                           |  | (a)                                                                    |   |  | (b)                                                    |   |   | (c)                                                                                                                                             | 
|Equity compensation plans approved by security holders (1) |  |                                                                        | — |  |                                                        | $ | — |                                                                                                                                                 | 
|Equity compensation plans approved by security holders (2) |  |                                                                        | — |  |                                                        |   | — |                                                                                                                                                 | 
|Equity compensation plans approved by security holders (3) |  |                                                                        | — |  |                                                        |   | — |                                                                                                                                                 | 
|Equity compensation plans approved by security holders (4) |  |                                                                        | — |  |                                                        |   | — |                                                                                                                                                 | 
|                                                           |  |                                                                        | — |  |                                                        | $ | — |                                                                                                                                                 | 





| | (1) | Represents
the shares authorized for issuance under the 2013 Option Plan, which was approved by the Company’s stockholders. The maximum
aggregate number of shares of common stock that may be issued under the 2013 Option Plan, including stock options, stock awards,
and stock appreciation rights is limited to 15% of the shares of common stock outstanding on the first trading day of any fiscal
year, or 1,140,978 shares of common stock for fiscal year 2017.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Represents
the shares authorized for issuance under the 2016 Employee Stock Purchase Plan, which was approved by the Company’s stockholders.
The maximum aggregate number of shares of common stock that may be issued under the 2016 Employee Stock Purchase Plan is limited
to $2,244,226 shares of common stock, which based on the closing price of our common stock on December 31, 2016, as listed on
the Nasdaq Capital Market, was equal to 1,739,710 shares of common stock.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Represents
the shares authorized for issuance under the 2015 Incentive Compensation Plan, which was approved by the Company’s stockholders.
The maximum aggregate number of shares of common stock that may be issued under the 2015 Incentive Compensation Plan, including
stock options and stock awards is limited to $1,188,703 of shares of common stock, which based on the closing price of our common
stock on December 31, 2016, as listed on the Nasdaq Capital Market, was equal to 921,475 shares of common stock.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Represents
the shares authorized for issuance under the 2016 Incentive Compensation Plan, which was approved by the Company’s stockholders.
The maximum aggregate number of shares of common stock that may be issued under the 2016 Incentive Compensation Plan, including
stock options and stock awards is limited to $3,410,366 of shares of common stock, which based on the closing price of our common
stock on December 31, 2016, as listed on the Nasdaq Capital Market, was equal to 2,643,695 shares of common stock.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | As
of December 31, 2016. On February 16, 2017, the Board approved the cancellation of all outstanding stock options of the Company
as the stock options were all out of the money.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 13. | Certain Relationships and Related Transactions, and Director Independence
|-------- | -------------------------------------------------------------------------



Other than compensation arrangements, the following
is a description of transactions to which we were a participant or will be a participant to, in which:



| | • | the amounts involved exceeded or will exceed the lesser of 1% of our total assets or $120,000; and
| | - | --------------------------------------------------------------------------------------------------



| | • | any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our Audit Committee considers and approves or disapproves
any related person transaction as required by Nasdaq Stock Market regulations.



MB Technology Holdings, LLC



Roger Branton, the Company’s Chief
Financial Officer, and George Schmitt, the Company’s Chief Executive Officer and Executive Chairman of the Board, are directors
of MBTH, and Richard Mooers, a director of the Company, is the Chief Executive Officer and a director of MBTH.





15







On April 29, 2014, the Company entered
into a management agreement (the “Management Agreement”) with MB Technology Holdings, LLC (“MBTH”), pursuant
to which MBTH agreed to provide certain management and financial services to the Company for a monthly fee of $25,000. The Management
Agreement was effective January 1, 2014. The Company incurred fees related to the Management Agreement of $300,000 and $300,000,
respectively, for the years ended December 31, 2016 and 2015.



The Company has agreed to award MBTH a
3% cash success fee if MBTH arranges financing for the Company, arranges a merger, consolidation or sale by the Company of substantially
all of the assets. On February 24, 2015, MBTH invoiced the Company for $700,000 in fees associated with equity financings that
had occurred through April 16, 2014 at a rate of 3% per financing less certain discounts. The Company incurred approximately $436,000
and $90,000 for fees associated with financings during the years ended December 31, 2016 and 2015, respectively. In addition, during
the year ended December 31, 2016, the Board approved an additional $115,000 fee to be paid to MBTH as consideration for additional
efforts provided by MBTH in connection with the Company’s financing and acquisition efforts.



On November 29, 2016, the Company and MBTH
entered into an acquisition services agreement (the “M&A Services Agreement”) pursuant to which the Company engaged
MBTH to provide services in connection with merger and acquisition searches, negotiating and structuring deal terms and other related
services. The M&A Services Agreement incorporates by reference the terms of the Management Agreement, as well as the Company’s
agreement with MBTH on January 12, 2013 to pay MBTH a 3% success fee (the “3% Success Fee”) on any financing arranged
for the Company, merger or consolidation of the Company or sale by the Company of substantially all of its assets. The M&A
Services Agreement has the following additional terms:



(1) The Company will pay MBTH
an acquisition fee equal to the greater of $250,000 or 8% of the total acquisition price (the ‘‘Acquisition Fee’’).
Where possible, the Company will pay MBTH 50% of the Acquisition Fee at closing of a transaction, and in any case, not later than
thirty (30) days following such closing, 25% of the Acquisition Fee three (3) months following such closing and 25% of the Acquisition
Fee six (6) months following such closing.



(2) In addition to any
other fees, the Company will pay MBTH a due diligence fee of $250,000 only on successfully closed transactions. This due diligence
fee shall be paid to MBTH as warrants to purchase shares of common stock of the Company in an amount equal to $250,000 divided
by the lower of the market price of the common stock on the day of closing of the transaction or the price of equity offered to
finance such acquisition. The exercise price of such warrants will be $0.01.



(3) The Company and MBTH agreed
to waive, on a case by case basis, the 3% Success Fee whenever any future Acquisition Fee is more than $1 million.



(4) In the event the Company
engages an independent, external advisor to value an acquisition and the valuation is higher than the price negotiated by MBTH
on behalf of the Company, then MBTH will receive an additional fee of 5% of such gain.



(5) MBTH has the option to convert
up to 50% of its fees into shares of common stock, so long as the receivable remains outstanding. The conversion price will be
the lower of 110% of the price of the common stock on the day of closing of a transaction or the price of equity securities offered
in connection with any acquisition financing. If MBTH converts at least 25% of its fees, then the Company agrees to register all
shares of common stock held by MBTH.



(6) If MBTH’s services
assist the Company in achieving forward sales of at least $50 million via acquisitions, then the Company agrees to offer MBTH a
three (3) year option to acquire up to 25% of the shares of common stock outstanding after such issuance. The price per share of
common stock will be 125% of the price of the common stock on the day the option is exercised





16







On February 16, 2017, the Board amended the terms
of the Block Purchase Option in the M&A Services Agreement to allow MBTH the option to acquire 25% of the fully diluted outstanding
shares of common stock and warrants of the Company at a price of $2.10 per share and for a five-year term.



The M&A Services Agreement is effective as of
November 1, 2016 and will automatically renew annually, unless earlier terminated by the Company or MBTH upon thirty (30) days’
written notice.



On March 3, 2016, our Board approved the issuance
of up to $300,000 in shares of common stock to MBTH as compensation for financial services in connection with our acquisition of
Integrated Microwave Technologies LLC (“IMT”). Such shares of common stock were to be issued to MBTH in an initial
tranche in the amount of $150,000 on March 15, 2016 and a second tranche to MBTH of up to $150,000 in shares of common stock if
IMT achieved certain performance goals by December 31, 2016. On August 10, 2016, the disinterested members of our Board, believing
it to be in the best interest of the Company, resolved to pay the award in cash instead of shares of common stock. The Company
accrued $150,000 in the due to related party balance owed to MBTH and paid these cash fees during 2016.



During the year ended December 31, 2016, the Company
accrued an additional $90,000 for rent expense and $115,000 for additional management fees in the due to related party balance
owed to MBTH.



During the year ended December 31, 2016, the Company
issued 49,712 shares of common stock to MBTH in settlement of amounts due of $364,000. In addition, during the year ended December
31, 2016, the Company repaid $655,000 in amounts due to MBTH in cash. The balance outstanding to MBTH as of December 31, 2016 is
$96,000 and has been included in due to related parties on our consolidated balance sheet for the year ended December 31, 2016.
On February 24, 2015, the Company issued 3,326 shares of common stock to MBTH in consideration of settling $1,756,098 in amounts
due to related parties at a price of $528 per share.



George Schmitt — Due to Related
Party



George Schmitt, our Chairman of the Board and Chief
Executive Officer currently makes an annual salary of $300,000 and receives all of his compensation in shares of common stock.
In 2016, Mr. Schmitt received 46,637 shares of common stock with a fair market value of $296,000. In 2015, Mr. Schmitt received
1,346 shares of common stock with a fair market value of $135,000.



On February 23, 2015, the Company issued
845,000 shares of Series B Preferred Stock, 45 shares of common stock, and warrants to purchase an aggregate 353 shares of common
stock exercisable for five (5) years at a price of $2,400 per share in full settlement and extinguishment of $845,000 due to family
members of George Schmitt.



From January 1, 2015 through December 31,
2015, the Company received a total of $1,900,000 in loans from Mr. Schmitt. On August 19, 2015, the Company repaid $500,000 of
the outstanding due to related party balance owed to Mr. Schmitt.



In October 2015, Mr. Schmitt agreed to
convert $500,000 of existing loans due from the Company into 7,441 shares of common stock with a grant date fair value of approximately
$500,000.





17







On July 25, 2016, the Company repaid the
outstanding principal totaling $300,000 and $70,484 in interest to Mr. Schmitt. As of December 31, 2016, the Company has repaid
in full the advances Mr. Schmitt made to the Company in 2015. For the year ended December 31, 2016, the Company accrued interest
expense of $14,000.



In October 2016, the Board agreed to give
Mr. Schmitt 27,977 shares of common stock for being the guarantor of the $2.5 million debt related to the IMT acquisition and the
Company recorded the fair market value of the shares at $103,000 in general and administrative expenses in the consolidated statement
of operations for the year ended December 31, 2016. These shares of common stock were issued in January 2017. At the same meeting,
the Board also agreed to give Mr. Schmitt 20,833 warrants at an exercise price of $8.40 and the Company recorded the grant date
fair value of the warrants at $77,000.



Deferred Revenue







On March 31, 2015, we shipped additional
equipment purchased by Larry Townes, a former director of xG Technology at the time of purchase order, and we received a partial payment for the equipment that had been previously delivered in those
transactions as the purchasers indicated that the equipment met certain technical specifications associated with their networks.
Despite the technical specifications being met, the customer opted to return a portion of the equipment to the Company during the
year ended December 31, 2015 resulting in the Company reversing accounts receivable of $336,000, with a corresponding reversal
to deferred revenue.



Any transactions subsequent to Larry Townes
resigning will not be considered related party transactions.



Itellum, LLC



In May 2015, the Company received an order
for approximately $100,000 in xMax mobile broadband wireless equipment and services which will be deployed in a network to be initially
installed in Escazu, Costa Rica, with plans to expand in other Latin American locations. The xMax equipment order was received
from Itellum, LLC (“Itellum”), an entity owned by MBTH, a related party, one of four companies who have entered into
a formal agreement to participate in the initial xMax deployment as well as expansion into other Latin American markets thereafter.
The other partners include Level 3 Communications (“Level 3”), Osmin Vargas Corporacion (“OV”), and MBTH.
In June 2015, the Company announced the successful installation and initial deployment of an xMax broadband network in Escazu,
Costa Rica by Itellum. This represents the first stage of xMax network deployments that are expected to cover additional areas
of Costa Rica, with plans for expansion into other Latin American locations. In June 2015, the Company received an additional order
for approximately $58,000 in xMax mobile broadband wireless equipment and services from Itellum.



Related party revenue was $0 for the year
ended December 31, 2016 compared to $156,000 for the year ended December 31, 2015. During the year ended December 31, 2016, the
Company wrote-off accounts receivable – related party of $156,000 to bad debt.



Director Independence



As we are listed on the Nasdaq Capital Market, our
determination of independence of directors is made using the definition of “independent director” contained in Rule
5605(a)(2) of the Marketplace Rules of the Nasdaq Stock Market. Our Board affirmatively determined that Gary Cuccio, Kenneth Hoffman,
General James T. Conway, and Raymond Sidney are “independent” directors, as that term is defined in the Marketplace
Rules of the Nasdaq Stock Market.





18







|Item 14. | Principal Accounting Fees and Services
|-------- | --------------------------------------



Principal
Accounting Fees



The
following table presents aggregate fees for professional services rendered by our  independent registered public accounting
firm, Marcum LLP (“Marcum”), for the  fiscal years ended
December 31, 2016 and 2015.



|                   |  | For the Year Ended December 31, |        
|------------------ |  | ------------------------------- | -------
|                   |  | 2016                            |        
|Audit fees (1)     |  | $                               | 482,408
|Audit-related fees |  |                                 | —      
|Tax fees           |  |                                 | —      
|All other fees (2) |  |                                 | 92,000 
|Total fees         |  | $                               | 574,408





| | (1) | Audit fees consist of the aggregate fees billed for each
of the last two fiscal years for professional services rendered by Marcum for the audit of the Company’s annual financial
statements and review of financial statements included in the Company’s Form 10-Qs, or services that are normally provided
by Marcum in connection with the Company’s statutory and regulatory filings or engagements for those fiscal years.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Other fees were for professional services rendered related
to the audit of IMT.
| | --- | -------------------------------------------------------------------------------





Policy on Audit Committee Pre-Approval of Audit
and Permissible Non-Audit Services of Independent Auditors



The Audit Committee pre-approves all audit and non-audit
services provided by the independent auditors prior to the engagement of the independent auditors with respect to such services.
The Chairman of the Audit Committee has been delegated the authority by the Audit Committee to pre-approve interim services by
the independent auditors other than the annual audit. The Chairman of the Audit Committee must report all such pre-approvals to
the entire Audit Committee at the next Audit Committee meeting.





19







PART IV



|Item 15. | Exhibits, Financial Statement Schedules
|-------- | ---------------------------------------



| | (a) | The
following documents are filed as part of this report:
| | --- | ---------------------------------------------------------



| | (1) | Financial
Statements:
| | --- | ---------------------



The audited balance sheets of the Company
as of December 31, 2016 and 2015, the related statements of operations, stockholders’ equity (deficit) and cash flows for
the years then ended, the footnotes thereto, and the report of Marcum LLP, independent registered public accounting firm, are filed
herewith.



| | (2) | Financial
Schedules:
| | --- | --------------------



| |  | None.
| |  | -----



Financial statement schedules have been
omitted because they are either not applicable or the required information is included in the financial statements or notes hereto.



| | (3) | Exhibits:
| | --- | ---------



The exhibits listed in the accompanying
index to exhibits are filed or incorporated by reference as part of this report.



| | (b) | The
following are exhibits to this report and, if incorporated by reference, we have indicated the document previously filed with
the SEC in which the exhibit was included.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Certain of the agreements filed as exhibits
to this report contain representations and warranties by the parties to the agreements that have been made solely for the benefit
of the parties to the agreement. These representations and warranties:



| | • | may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | may apply standards of materiality that differ from those of a reasonable investor; and
| | - | ---------------------------------------------------------------------------------------



| | • | were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.
| | - | --------------------------------------------------------------------------------------------------------------------------------------



Accordingly, these representations and
warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at
any other time. Investors should not rely on them as statements of fact.



|ExhibitNumber                |  | Description of Exhibit                                                                                                                                                                              
|---------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1(i)                       |  | Amended & Restated Certificate of Incorporation (1)                                                                                                                                                 
|3.1(i)(a)                    |  | Amendment to Certificate of Incorporation filed June 11, 2014 (2)                                                                                                                                   
|3.1 (i)(b)
        3.1(i)(c) |  | Amendment to Certificate of Incorporation filed July 10, 2015
        (13)
        Amended and Restated Certificate of Designation of Series B
        Convertible Stock (16)                       
|3.1(i)(d)                    |  | Certificate of Designation of Series C Convertible Stock (12)                                                                                                                                       
|3.1(i)(e)                    |  | Certificate of Designation of Series D Convertible Stock (17)                                                                                                                                       
|3.1(i)(f)                    |  | Certificate of Elimination for Series C Convertible Preferred Stock (12)                                                                                                                            
|3.1(i)(g)                    |  | Certificate of Elimination for Series B Convertible Preferred Stock (23)                                                                                                                            
|3.1(i)(h)                    |  | Amended to Certificate of Incorporation filed June 10, 2016 (20)                                                                                                                                    
|3.1(ii)                      |  | Amended & Restated Bylaws (3)                                                                                                                                                                       
|4.1                          |  | Form of Common Stock Certificate of the Registrant (4)                                                                                                                                              
|4.2                          |  | Form of Warrant Agreement by and between the Registrant and Continental Stock Transfer & Trust Company and Form of Warrant Certificate for the offering closed July 24, 2013 and August 19, 2013 (5)





20







|4.3   |  | Form of Underwriters’ Warrant for the offering closed July 24, 2013 (1)                                                                               
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|4.4   |  | Form of Underwriters’ Warrant for the offering closed November 18, 2013 (6)                                                                           
|4.5   |  | Form of Warrant issued in December 30, 2014 Offering. (10)                                                                                            
|4.6   |  | Form of Warrant issued in February 11, 2015 Offering. (11)                                                                                            
|4.7   |  | Form of Warrant issued in February 24, 2015 Offering. (12)                                                                                            
|4.8   |  | Form of 8% Convertible Note (13)                                                                                                                      
|4.9   |  | Form of Series A Warrant for the August 2015 Offering (14)                                                                                            
|4.10  |  | Form of Pre-funded Series B Warrant for the August 2015 Offering (14)                                                                                 
|4.11  |  | Form of Series C Warrant for the August 2015 Offering (14)                                                                                            
|4.12  |  | Form of Series D Warrant for the August 2015 Offering (14)                                                                                            
|4.13  |  | Form of 5% Convertible Note (15)                                                                                                                      
|4.14  |  | Form of Amendment, dated April 29, 2016, to Series A Warrant to Purchase Common Stock of xG Technology, Inc., dated August 19, 2015(18)               
|4.15  |  | Form of Amendment, dated April 29, 2016, to Warrant to Purchase Common Stock of xG Technology, Inc., dated February 29, 2016 (18)                     
|4.16  |  | Form of Warrant (19)                                                                                                                                  
|10.1  |  | 2013 Long Term Incentive Plan (7)                                                                                                                     
|10.2  |  | Forms of Agreement Under 2013 Long Term Incentive Plan (7)                                                                                            
|10.3  |  | 2004 Option Plan (7)                                                                                                                                  
|10.4  |  | 2005 Option Plan (7)                                                                                                                                  
|10.5  |  | 2006 Option Plan (7)                                                                                                                                  
|10.6  |  | 2007 Option Plan (7)                                                                                                                                  
|10.7  |  | 2009 Option Plan (7)                                                                                                                                  
|10.8  |  | Forms of Award Documents under 2004, 2005, 2006, 2007, and 2009 Option Plans (7)                                                                      
|10.9  |  | Sunrise Office Lease (7)                                                                                                                              
|10.10 |  | Care21 Agreement (7)                                                                                                                                  
|10.11 |  | Purchase Agreement, dated as of September 22, 2014, by and between the Company and Lincoln Park Capital Fund, LLC. (8)                                
|10.12 |  | Purchase Agreement, dated as of September 19, 2014, by and between the Company and Lincoln Park Capital Fund, LLC. (8)                                
|10.13 |  | Registration Rights Agreement, dated as of September 19, 2014, by and between the Company and Lincoln Park Capital Fund, LLC. (8)                     
|10.14 |  | Purchase Agreement, dated as of November 25, 2014, by and between the Company, LPC, Affiliate Purchasers, and the Other Investors (9)                 
|10.15 |  | Purchase Agreement, dated as of December 30, 2014, by and between the Company and 31 Group, LLC. (10)                                                 
|10.16 |  | Purchase Agreement, dated as of February 11, 2015, by and between the Company and 31 Group, LLC. (11)                                                 
|10.17 |  | Purchase Agreement, dated as of February 24, 2014, by and between the Company and 31 Group, LLC. (12)                                                 
|10.18 |  | Form of Purchase Agreement dated as of June 11, 2015 (13)                                                                                             
|10.19 |  | Amendment to Purchase Agreement dated as of June 11, 2015 (13)                                                                                        
|10.20 |  | Asset Purchase Agreement, dated as of January 29, 2016, by and between the Company and Integrated Microwave Technologies, LLC (15)                    
|10.21 |  | Form of Securities Purchase Agreement (15)                                                                                                            
|10.22 |  | $1,500,000 Initial Payment Note from the Company to IMT (15)                                                                                          
|10.23 |  | Form of Subscription Agreement, dated May 12, 2016, between the Company and the Purchasers thereto (19)                                               
|10.24 |  | 2015 Employee Stock Purchase Plan (21)                                                                                                                
|10.25 |  | 2015 Incentive Compensation Plan (21)                                                                                                                 
|10.26 |  | 2016 Employee Stock Purchase Plan (22)                                                                                                                
|10.27 |  | 2016 Incentive Compensation Plan (22)                                                                                                                 
|14.1  |  | Code of Ethics(8)                                                                                                                                     
|23.1* |  | Consent of Marcum LLP                                                                                                                                 
|31.1  |  | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.





21







|31.2     |  | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|32.1*    |  | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2*    |  | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|101.INS* |  | XBRL Instance Document                                                                                                                                
|101.SCH* |  | XBRL Taxonomy Schema                                                                                                                                  
|101.CAL* |  | XBRL Taxonomy Calculation Linkbase                                                                                                                    
|101.DEF* |  | XBRL Taxonomy Definition Linkbase                                                                                                                     
|101.LAB* |  | XBRL Taxonomy Label Linkbase                                                                                                                          
|101.PRE* |  | XBRL Taxonomy Presentation Linkbase                                                                                                                   



*Previously filed on the Original Report.



In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2
are being furnished and not filed.



|(1)  | Filed as an Exhibit on Form S-1 with the SEC on October 23, 2013.                    
|---- | -------------------------------------------------------------------------------------
|(2)  | Filed as an Exhibit on Current Report on Form 8-K with the SEC on June 13, 2014.     
|(3)  | Filed as an Exhibit on Quarterly Report on Form 10-Q with the SEC on August 30, 2013.
|(4)  | Filed as an Exhibit on Form S-1/A with the SEC on May 21, 2013.                      
|(5)  | Filed as an Exhibit on Current Report to Form 8-K with the SEC on August 19, 2013.   
|(6)  | Filed as an Exhibit on Form S-1/A with the SEC on November 6, 2013.                  
|(7)  | Filed as an Exhibit on Form S-1 with the SEC on March 7, 2013.                       
|(8)  | Filed as an Exhibit on Current Report on Form 8-K with the SEC on September 24, 2014.
|(9)  | Filed as an Exhibit on Current Report on Form 8-K with the SEC on November 26, 2014. 
|(10) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on December 31, 2014. 
|(11) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 13, 2015. 
|(12) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 26, 2015. 
|(13) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on June 12, 2015.     
|(14) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on August 20, 2015.   
|(15) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 3, 2016.  
|(16) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 10, 2016. 
|(17) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on April 27, 2016     
|(18) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 2, 2016        
|(19) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 13, 2016.      
|(20) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on June 20, 2016.     
|(21) | Filed as an Exhibit on Annual Report on Form 10-K with the SEC on April 14, 2016.    
|(22) | Filed as an Exhibit on Form S-1 with the SEC on June 27, 2016                        
|(23) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on December 7, 2016.  



22







SIGNATURES



Pursuant to the requirement of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



|                      | xG TECHNOLOGY, INC.
|--------------------- | -------------------
|                      |                    
|Date: April 28,  2017 | By:                
|                      |                    
|                      |                    
|                      |                    
|                      |                    
|                      |                    
|Date: April 28, 2017  | By:                
|                      |                    
|                      |                    
|                      |                    
|                      |                    



Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.



|Signature             |  | Title                                             |  | Date          
|--------------------- |  | ------------------------------------------------- |  | --------------
|                      |  |                                                   |  |               
|/s/ George Schmitt    |  | Chief Executive Officer and Chairman of the Board |  | April 28, 2017
|George Schmitt        |  | (Principal Executive Officer)                     |  |               
|                      |  |                                                   |  |               
|/s/ Roger G. Branton  |  | Chief Financial Officer                           |  | April 28, 2017
|Roger G. Branton      |  | (Principal Financial and Accounting Officer)      |  |               
|                      |  |                                                   |  |               
|/s/ John C. Coleman   |  | Director                                          |  | April 28, 2017
|John C. Coleman       |  |                                                   |  |               
|                      |  |                                                   |  |               
|/s/ Richard L. Mooers |  | Director                                          |  | April 28, 2017
|Richard L. Mooers     |  |                                                   |  |               
|                      |  |                                                   |  |               
|/s/ Gary Cuccio       |  | Director                                          |  | April 28, 2017
|Gary Cuccio           |  |                                                   |  |               
|                      |  |                                                   |  |               
|/s/ Raymond M. Sidney |  | Director                                          |  | April 28, 2017
|Raymond M. Sidney     |  |                                                   |  |               
|                      |  |                                                   |  |               
|/s/ Kenneth Hoffman   |  | Director                                          |  | April 28, 2017
|Kenneth Hoffman       |  |                                                   |  |               
|                      |  |                                                   |  |               
|/s/ James T. Conway   |  | Director                                          |  | April 28, 2017
|James T. Conway       |  |                                                   |  |               





23









INDEX TO EXHIBITS



|ExhibitNumber                |  | Description of Exhibit                                                                                                                                                                              
|---------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1(i)                       |  | Amended & Restated Certificate of Incorporation (1)                                                                                                                                                 
|3.1(i)(a)                    |  | Amendment to Certificate of Incorporation filed June 11, 2014 (2)                                                                                                                                   
|3.1 (i)(b)
        3.1(i)(c) |  | Amendment to Certificate of Incorporation filed July 10, 2015
        (13)
        Amended and Restated Certificate of Designation of Series B
        Convertible Stock (16)                       
|3.1(i)(d)                    |  | Certificate of Designation of Series C Convertible Stock (12)                                                                                                                                       
|3.1(i)(e)                    |  | Certificate of Designation of Series D Convertible Stock (17)                                                                                                                                       
|3.1(i)(f)                    |  | Certificate of Elimination for Series C Convertible Preferred Stock (12)                                                                                                                            
|3.1(i)(g)                    |  | Certificate of Elimination for Series B Convertible Preferred Stock (23)                                                                                                                            
|3.1(i)(h)                    |  | Amended to Certificate of Incorporation filed June 10, 2016 (20)                                                                                                                                    
|3.1(ii)                      |  | Amended & Restated Bylaws (3)                                                                                                                                                                       
|4.1                          |  | Form of Common Stock Certificate of the Registrant (4)                                                                                                                                              
|4.2                          |  | Form of Warrant Agreement by and between the Registrant and Continental Stock Transfer & Trust Company and Form of Warrant Certificate for the offering closed July 24, 2013 and August 19, 2013 (5)
|4.3                          |  | Form of Underwriters’ Warrant for the offering closed July 24, 2013 (1)                                                                                                                             
|4.4                          |  | Form of Underwriters’ Warrant for the offering closed November 18, 2013 (6)                                                                                                                         
|4.5                          |  | Form of Warrant issued in December 30, 2014 Offering. (10)                                                                                                                                          
|4.6                          |  | Form of Warrant issued in February 11, 2015 Offering. (11)                                                                                                                                          
|4.7                          |  | Form of Warrant issued in February 24, 2015 Offering. (12)                                                                                                                                          
|4.8                          |  | Form of 8% Convertible Note (13)                                                                                                                                                                    
|4.9                          |  | Form of Series A Warrant for the August 2015 Offering (14)                                                                                                                                          
|4.10                         |  | Form of Pre-funded Series B Warrant for the August 2015 Offering (14)                                                                                                                               
|4.11                         |  | Form of Series C Warrant for the August 2015 Offering (14)                                                                                                                                          
|4.12                         |  | Form of Series D Warrant for the August 2015 Offering (14)                                                                                                                                          
|4.13                         |  | Form of 5% Convertible Note (15)                                                                                                                                                                    
|4.14                         |  | Form of Amendment, dated April 29, 2016, to Series A Warrant to Purchase Common Stock of xG Technology, Inc., dated August 19, 2015(18)                                                             
|4.15                         |  | Form of Amendment, dated April 29, 2016, to Warrant to Purchase Common Stock of xG Technology, Inc., dated February 29, 2016 (18)                                                                   
|4.16                         |  | Form of Warrant (19)                                                                                                                                                                                
|10.1                         |  | 2013 Long Term Incentive Plan (7)                                                                                                                                                                   
|10.2                         |  | Forms of Agreement Under 2013 Long Term Incentive Plan (7)                                                                                                                                          
|10.3                         |  | 2004 Option Plan (7)                                                                                                                                                                                
|10.4                         |  | 2005 Option Plan (7)                                                                                                                                                                                
|10.5                         |  | 2006 Option Plan (7)                                                                                                                                                                                
|10.6                         |  | 2007 Option Plan (7)                                                                                                                                                                                
|10.7                         |  | 2009 Option Plan (7)                                                                                                                                                                                
|10.8                         |  | Forms of Award Documents under 2004, 2005, 2006, 2007, and 2009 Option Plans (7)                                                                                                                    
|10.9                         |  | Sunrise Office Lease (7)                                                                                                                                                                            
|10.10                        |  | Care21 Agreement (7)                                                                                                                                                                                
|10.11                        |  | Purchase Agreement, dated as of September 22, 2014, by and between the Company and Lincoln Park Capital Fund, LLC. (8)                                                                              
|10.12                        |  | Purchase Agreement, dated as of September 19, 2014, by and between the Company and Lincoln Park Capital Fund, LLC. (8)                                                                              
|10.13                        |  | Registration Rights Agreement, dated as of September 19, 2014, by and between the Company and Lincoln Park Capital Fund, LLC. (8)                                                                   
|10.14                        |  | Purchase Agreement, dated as of November 25, 2014, by and between the Company, LPC, Affiliate Purchasers, and the Other Investors (9)                                                               
|10.15                        |  | Purchase Agreement, dated as of December 30, 2014, by and between the Company and 31 Group, LLC. (10)                                                                                               
|10.16                        |  | Purchase Agreement, dated as of February 11, 2015, by and between the Company and 31 Group, LLC. (11)                                                                                               





24







|10.17    |  | Purchase Agreement, dated as of February 24, 2014, by and between the Company and 31 Group, LLC. (12)                                                 
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|10.18    |  | Form of Purchase Agreement dated as of June 11, 2015 (13)                                                                                             
|10.19    |  | Amendment to Purchase Agreement dated as of June 11, 2015 (13)                                                                                        
|10.20    |  | Asset Purchase Agreement, dated as of January 29, 2016, by and between the Company and Integrated Microwave Technologies, LLC (15)                    
|10.21    |  | Form of Securities Purchase Agreement (15)                                                                                                            
|10.22    |  | $1,500,000 Initial Payment Note from the Company to IMT (15)                                                                                          
|10.23    |  | Form of Subscription Agreement, dated May 12, 2016, between the Company and the Purchasers thereto (19)                                               
|10.24    |  | 2015 Employee Stock Purchase Plan (21)                                                                                                                
|10.25    |  | 2015 Incentive Compensation Plan (21)                                                                                                                 
|10.26    |  | 2016 Employee Stock Purchase Plan (22)                                                                                                                
|10.27    |  | 2016 Incentive Compensation Plan (22)                                                                                                                 
|14.1     |  | Code of Ethics(8)                                                                                                                                     
|23.1*    |  | Consent of Marcum LLP                                                                                                                                 
|31.1     |  | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|31.2     |  | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|32.1*    |  | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2*    |  | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|101.INS* |  | XBRL Instance Document                                                                                                                                
|101.SCH* |  | XBRL Taxonomy Schema                                                                                                                                  
|101.CAL* |  | XBRL Taxonomy Calculation Linkbase                                                                                                                    
|101.DEF* |  | XBRL Taxonomy Definition Linkbase                                                                                                                     
|101.LAB* |  | XBRL Taxonomy Label Linkbase                                                                                                                          
|101.PRE* |  | XBRL Taxonomy Presentation Linkbase                                                                                                                   



*Previously filed on the Original Report.



In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2
are being furnished and not filed.



|(1)  | Filed as an Exhibit on Form S-1 with the SEC on October 23, 2013.                    
|---- | -------------------------------------------------------------------------------------
|(2)  | Filed as an Exhibit on Current Report on Form 8-K with the SEC on June 13, 2014.     
|(3)  | Filed as an Exhibit on Quarterly Report on Form 10-Q with the SEC on August 30, 2013.
|(4)  | Filed as an Exhibit on Form S-1/A with the SEC on May 21, 2013.                      
|(5)  | Filed as an Exhibit on Current Report to Form 8-K with the SEC on August 19, 2013.   
|(6)  | Filed as an Exhibit on Form S-1/A with the SEC on November 6, 2013.                  
|(7)  | Filed as an Exhibit on Form S-1 with the SEC on March 7, 2013.                       
|(8)  | Filed as an Exhibit on Current Report on Form 8-K with the SEC on September 24, 2014.
|(9)  | Filed as an Exhibit on Current Report on Form 8-K with the SEC on November 26, 2014. 
|(10) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on December 31, 2014. 
|(11) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 13, 2015. 
|(12) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 26, 2015. 
|(13) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on June 12, 2015.     
|(14) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on August 20, 2015.   
|(15) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 3, 2016.  
|(16) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 10, 2016. 
|(17) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on April 27, 2016     
|(18) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 2, 2016        
|(19) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 13, 2016.      
|(20) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on June 20, 2016.     
|(21) | Filed as an Exhibit on Annual Report on Form 10-K with the SEC on April 14, 2016.    
|(22) | Filed as an Exhibit on Form S-1 with the SEC on June 27, 2016                        
|(23) | Filed as an Exhibit on Current Report on Form 8-K with the SEC on December 7, 2016.  





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