Rockley Photonics announced its intention not to proceed, under current circumstances, with its data-communications-related technical sale to Hengtong Rockley Technology Co. Ltd., its joint venture with Jiangsu Hengtong Optic-Electric Co..
The announcement follows last week's decision by the U.S. Department of Commerce's Bureau of Industry and Security (BIS) to add Jiangsu Hengtong Optic-Electric to its Entity List because of national security and human rights concerns.
“Rockley’s primary focus has been and continues to be on the development and commercialization of our sensing platform in the health monitoring space. We continue to make outstanding progress in this arena, as outlined in our recent customer and technology announcements, and our outlook for this business continues to show momentum,” said Andrew Rickman, founder and chief executive officer of Rockley. “The technical sale to the JV was intended as an efficient way to monetize Rockley’s innovative data communications technology without distracting from our primary focus on our health and wellness solutions.”
Dr. Rickman went on to say, “We continue to fully comply with the regulations and have decided not to proceed with our technical sale to the JV under the current circumstances. The BIS action will require us to adjust our strategy for monetizing our communications technology. While we are disappointed in the near-term impact on our company, we believe that this decision will be a net positive for Rockley and will not affect the long-term outlook for our business because these solutions were not core to our future growth prospects. We will continue to focus our resources on bringing solutions to the health and wellness market to satisfy the significant consumer and medtech demand we have reported. We are evaluating options to monetize our ultra-high-speed fiber optic communication solutions, which we believe could have a net positive impact on our cash.”
