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RAPAPORT... Lazare Kaplan International anticipates that revenue rose by $3 million to $71 million for the fiscal year that ended on May 31, 2014. However, sales plummeted 20.4 percent year on year $54.3 million, due to a decrease in sales of commercial (non-branded) polished diamonds. Nonetheless, Lazare Kaplan gained $16.7 million from a settlement and license agreement with the Gemological Institute of America (GIA). The agreement granted GIA a license to practice certain patents and GIA agreed to pay the company a per inscription royalty until July 31, 2016. Lazare Kaplan anticipates that the range of potential future royalty payments associated with the license agreement will not exceed 10 percent of revenue. The diamond firm contended that uncertain economic conditions prevail across certain sectors of the diamond and jewelry industry. Rough diamond prices have generally been rising ahead of polished diamond prices, placing significant pressure on diamond manufacturers. In addition, the continued existence of Lazare Kaplan's litigation with Antwerp Diamond Bank N.V. and KBC Bank N.V. and the inability to timely resolve material uncertainties has adversely impacted the company's ability to transact business. Lazare Kaplan reiterated its intention to file official quarterly and annual financial reports dating back to May 31, 2009, only after it has resolved material uncertainties. Lazare Kaplan denies that any amount is currently due or owed to Antwerp Diamond Bank under a $45 million facility and further denies that any action under that agreement be brought by the bank in the courts of Belgium. In the U.S. court system, Lazare Kaplan is seeking, among other things, in excess of $500 million in damages that could be trebled under the Racketeer Influenced and Corrupt Organizations Act (RICO) and state law against the banks. The company alleges that the banks engaged in money laundering and other illegal activity that includes the theft of over $135 million from the sales of diamonds belonging to Lazare Kaplan and its affiliates.
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