OXFORD, England & PASADENA, California – (COMMERCIAL THREAD) – Rockley Photonics (NYSE: RKLY) (“the Company” or “Rockley”), a global leader in photonics-based health monitoring and communication solutions, today announced its intention not to proceed , under the current circumstances, to its data. communications-related technical sale to Hengtong Rockley Technology Co. Ltd., its joint venture (“the JV”) with Jiangsu Hengtong Optic-Electric Co., Ltd. (“Hengtong”). As a result, Rockley has released an update on the business outlook for the years 2021 and 2022. The decision not to proceed with the sale is due to the fact that the US Bureau of Industry and Safety (BIS) department American Commerce placed Hengtong and some of its affiliates in the BIS “List of entitiesWith an effective date of December 17, 2021, which means that US Export Administration (EAR) regulations prohibit companies from supplying products and technologies to organizations on the “Entity List” without prior authorization. The Company is currently reviewing its relationship with the JV and will make appropriate decisions based on its findings.
“Rockley’s primary focus has been and continues to be on the development and commercialization of our detection platform in the health surveillance arena. We continue to make remarkable progress in this area, as reflected in our recent customer and technology announcements, and our outlook for this company continues to show momentum, ”said Andrew Rickman, Founder and CEO of Rockley. “Technical JV selling was designed as an effective way to monetize Rockley’s innovative data communications technology without distracting from our primary focus on our health and wellness solutions. ”
Dr Rickman added: “We continue to be in full compliance with the regulations and have decided not to proceed with our technical sale to JV under the current circumstances. The BRI’s action will force us to adjust our strategy of monetizing our communications technology. While we are disappointed with the short term impact on our business, we believe this decision will be a net positive for Rockley and will not affect the long term prospects of our business as these solutions were not at the core of our prospects for future growth. We will continue to focus our resources on providing solutions to the health and wellness marketplace to meet the significant consumer demand and medical technology that we have reported. We are evaluating options to monetize our ultra-high speed fiber optic communications solutions, which we believe could have a net positive impact on our cash flow. ”
Accordingly, the Company is updating its outlook for fiscal 2021 and fiscal 2022 to reflect its current expectations.
Revised outlook for the full year
$ 7-8 million
$ 25 – 30 million
As at September 30, 2021, the Company had cash, cash equivalents and investments of $ 125 million.
About Rockley Photonics
A world leader in photonics-based health monitoring and communication solutions, Rockley Photonics develops a complete line of photonic integrated circuits and associated modules, sensors and complete solutions. From next-generation sensing platforms designed specifically for mobile health monitoring and machine vision to high-speed, high-volume solutions for data communications, Rockley is laying the groundwork for a new generation of applications in several sectors. Rockley believes photonics will eventually become as ubiquitous as microelectronics, and he has developed a platform with the power and flexibility to address both mass markets and a wide variety of vertical applications.
Formed in 2013, Rockley is uniquely positioned to support large-scale manufacturing and address a multitude of high-volume markets. Rockley has partnered with numerous Tier 1 customers across a wide range of industries to provide the complex optical systems required to bring process products to market.
To learn more about Rockley, visit rockleyphotonics.com.
Caution regarding forward-looking statements
Statements in this press release that are not historical facts constitute “forward-looking statements” for the purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding expectations, beliefs, plans, goals and assumptions regarding future events or performance. The words “accelerate”, “advance”, “authorize”, “anticipate”, “believe”, “can”, “continue”, “could”, “develop”, “enable”, “estimate”, “possibly”, “Extend,” expect “,” focus “,” foresee “,” future “,” objective “,” intention “,” could “,” could “,” position “,” potential “,” Predict “,” project “,” revolutionize “,” seem “,” should “,” trend “,” vision “,” will “,” would “or other terms that predict or indicate events, future trends or expectations, and similar expressions or the negative of such expressions may identify forward-looking statements, but the absence of such words or terms does not mean that a statement is not forward-looking. Forward-looking statements contained in this press release include, but are not limited to, statements regarding the following: (a) Rockley’s continued focus on marketing its platform in the health surveillance arena and its progress; (b) the potential impact on Rockley’s business (including the joint venture, the Company’s review of its relationship with the joint venture and data communications activities), direction, resource allocation, revenues, outlook and outlook, as well as its business plan and objectives related to the health and wellness market, due to its intention not to proceed with its technical sale related to data communications to the JV and the placement of Hengtong and certain of its subsidiaries by the US Bureau of Industry and Security (BIS) of the US Department of Commerce on the list of Bureau entities; (c) Rockley’s strategy to monetize its communications technology; (d) Rockley’s outlook for 2021 and 2022; (e) the Company’s emphasis on the efficient deployment of short-term capital and the evaluation of options for its ultra-high speed data communications solutions; (f) the aspects, direction, objectives, opportunities and expected benefits of Rockley’s silicon photonics solutions, including the potential to create an opportunity to revolutionize the data communications industry and accelerate development and the production of ultra-fast solutions for this market; (g) the expected and potential characteristics and benefits of Rockley’s platform, products and technology; (h) its development of a range of photonic integrated circuits and associated modules, sensors and full-stack solutions; (i) Rockley’s belief that photonics will eventually become as ubiquitous as microelectronics; and (j) Rockley’s potential to support large-scale manufacturing, address a multitude of high volume markets and provide the complex optical systems necessary to bring convertible products to market.
Forward-looking statements are subject to several risks and uncertainties (many of which are beyond Rockley’s control) or other assumptions that may cause actual results or performance to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, without limitation, the following: (i) Rockley’s ability to achieve customer acceptance and commercial production of its products and technology, including in a timely and cost effective manner; (ii) Rockley’s ability to secure customer design contracts and convert memoranda of understanding and development contracts into production contracts; (iii) risks associated with purchase orders, including the lack of long-term purchase commitments, cancellation, reduction, delay or other changes to customer purchase orders, and whether and to the extent that customers seek to enter into licensing agreements instead of purchases; (iv) Rockley’s loss history and the need for additional capital and its ability to access additional financing to support its operations and execute its business plan, as well as the associated risks; (v) legal and regulatory risks; (vi) the risks associated with its factory-less manufacturing model and its reliance on third-party suppliers; (vii) Rockley’s dependence on a few major customers for the majority of its sales and its ability to expand and diversify its customer base; (viii) Rockley’s financial performance; (ix) the impacts of COVID-19 on Rockley, its customers and suppliers, its target markets and the global economy; (x) Rockley’s ability to successfully manage its growth and operations as a public company; (xi) fluctuations in the price of Rockley’s shares and Rockley’s ability to maintain the listing of its common shares on the NYSE; (xii) Rockley’s ability to anticipate and respond to industry trends and customer requirements; (xiii) changes in current and future markets in which Rockley is or may be engaged; (xiv) risks related to competition and intellectual property; (xv) market opportunities and demand for Rockley’s products and technology, as well as the customer products into which Rockley’s products and technology are integrated; (xvi) risks associated with international operations; (xvii) cybersecurity, privacy and infrastructure risks; (xviii) risks related to financial and accounting matters; (xix) general economic, financial, political and commercial conditions, both domestic and foreign; (xx) the ability of Rockley to realize the expected benefits of its business combination with SC Health Corporation; and (xxi) Rockley’s ability to utilize its equity line of credit, as well as other factors described under “Risk Factors” in Rockley’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, and in other Rockley filings with the Securities and Exchange Commission going forward.
The forward-looking statements contained in this press release are based on various assumptions, whether or not identified in this press release, and on Rockley’s current expectations, beliefs and assumptions and are not predictions of actual performance. If any of these risks or uncertainties materialize, or if any of these assumptions prove to be incorrect, actual results may differ materially from those discussed or implied by these forward-looking statements. There can be no assurance that future developments affecting Rockley will be those which have been anticipated. These forward-looking statements speak only as of the date hereof and Rockley does not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as the law requires it.