xG Technology will be expanding its xMax cognitive cellular network trial with Townes Tele-communications Inc. in Lewisville, Arkansas. Townes has also offered to host an additional xMax network in one of its other rural markets. One or both of these trials will be used to support xG's efforts to secure Rural Utilities Service certification. RUS is a division of the United States Department of Agriculture, and provides technical guidance and financial assistance for the delivery of advanced communications services to rural communities. RUS certification will allow xG customers to apply for loans from the RUS to buy xMax equipment and deliver advanced mobile VoIP and broadband services to their customers.

In addition to supporting xG's RUS efforts, Larry Townes, Chairman and CEO of Townes Tele-Communications, has recently become a significant investor in MB Technology Holdings, LLC (a substantial holder of xG's shares).

Townes Tele-Communications is a prominent U.S. Independent Local Exchange Carrier with operations in Texas, Kansas, Pennsylvania, Colorado, Arkansas, Missouri and Florida.