Rockley to retain up to $24.5 million of incremental funding, of which $10.0 million will be received at closing

Rockley Photonics Holdings Limited (“Rockley”) (NYSE: RKLY), a global leader in photonics-based health monitoring and communications solutions, today announced that it has entered into a definitive agreement with holders of outstanding Convertible Senior Secured Notes due 2026 (or their affiliates) and one new investor to issue approximately $90.6 million aggregate original principal amount of a new series of Convertible Senior Secured Notes due 2026 (the “New Notes”) generating net proceeds after discount of approximately $89.4 million with an initial conversion price of $0.6888 and warrants (the “Warrants”) to purchase 131.6 million ordinary shares of the Company (the “Ordinary Shares”) at a price of $1.1182 per share, subject to certain anti-dilution adjustments.

Rockley will use approximately $63.9 million of the proceeds to repurchase all currently outstanding Senior Secured Notes due 2022 (the “Bridge Notes”) in an aggregate original principal amount of approximately $12.4 million and a portion of its outstanding Convertible Senior Secured Notes due 2026 (the “Existing Notes”) in an aggregate original principal amount of $50.0 million (inclusive of accrued interest and related fees and expenses). In addition, approximately $14.5 million of the proceeds will be placed in an escrow account for release to Rockley at the direction of the requisite number of holders of the New Notes. Following the repurchases and giving effect to the placement of funds into escrow, Existing Notes in an aggregate original principal amount of $28.5 million will remain outstanding, and Rockley will retain $10.0 million of proceeds (exclusive of the funds placed in escrow). Rockley intends to use these proceeds, together with any such funds released from escrow, for general corporate purposes.

The amounts reflected above include an investment by Dr. Andrew Rickman, Rockley’s chairman and chief executive officer, in approximately $1.1 million of the New Notes and Warrants on the same terms as the other purchasers of the New Notes and Warrants. Dr. Rickman’s participation has been separately reviewed and approved by Rockley’s audit committee and independent members of Rockley’s board of directors.

The transaction is subject to customary closing conditions and is expected to close on October 25, 2022. More detailed information concerning this financing can be found in the Current Report on Form 8-K that Rockley filed with the U.S. Securities and Exchange Commission on October 25, 2022.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities (including the Ordinary Shares, if any, issuable upon conversion of the New Notes and exercise of the Warrants) and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

About Rockley Photonics

A global leader in photonics-based health monitoring and communications solutions, Rockley Photonics is developing a comprehensive range of photonic integrated circuits and associated modules, sensors, and full-stack solutions. From next-generation sensing platforms specifically designed for mobile health monitoring and machine vision to high-speed, high-volume solutions for data communications, Rockley is laying the foundation for a new generation of applications across multiple industries. Rockley believes that photonics will eventually become as pervasive as micro-electronics, and it has developed a platform with the power and flexibility needed to address both mass markets and a wide variety of vertical applications.

Formed in 2013, Rockley is uniquely positioned to support hyper-scale manufacturing and address a multitude of high-volume markets. Rockley has partnered with numerous tier-1 customers across a diverse range of industries to deliver the complex optical systems required to bring transformational products to market.

Cautionary Note Regarding Forward-Looking Statements

Statements in this press release that are not historical facts constitute “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding Rockley’s future expectations, beliefs, plans, objectives, and assumptions regarding future events or performance. The words “accelerate,” “advance,” “anticipate,” “believe,” “can,” “capability,” “continue,” “could,” “develop,” “enable,” “estimate,” “eventual,” “expand, “expect,” “focus,” “forward,” “future,” “goal,” “intend,” “may,” “might,” “opportunity,” “outlook,” “plan,” “possible,” “position,” “potential,” “predict,” “project,” “revolutionize,” “seem,” “should,” “trend,” “vision,” “will,” “would” or other terms that predict or indicate future events, trends, or expectations, and similar expressions or the negative of such expressions may identify forward-looking statements, but the absence of these words or terms does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements regarding the following: (a) the anticipated timing for the closing of the proposed financing and repurchase of outstanding debt; and (b) the anticipated uses of net proceeds from the private placement transaction (including any funds released from escrow) following consummation of the anticipated repurchase of outstanding debt.

Forward-looking statements are subject to several risks, assumptions, and uncertainties (many of which are beyond Rockley’s control) that may cause actual results or performance to differ materially from those expressed or implied by these forward-looking statements. These risks, assumptions, and uncertainties include, but are not limited to, the risk that the closing does not occur on the anticipated timeline, or at all; the risk that we do not receive any of the funds placed into escrow; and the risk factors described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, and in other documents we file with the Securities and Exchange Commission. If any of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, actual results may differ materially from those discussed in or implied by these forward-looking statements. There can be no assurance that future developments affecting Rockley will be those that have been anticipated. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. 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 because of new information, future events, or otherwise, except as required by law.

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