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Lab Diamond Grower Scio Widens its Losses
Aug 17, 2016 9:31 AM
By Rapaport News
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RAPAPORT... Scio
Diamond Technology moved further into the red in the first fiscal quarter as
management admitted its future remains in doubt.
The
company’s loss widened 44 percent to $1.3 million even as revenue advanced 7.5
percent to $185,061 in the three months that ended June 30. The effects of a
water leak at its factory in December, as well as other risks associated with
being a new business, “raise substantial doubt about the company’s ability to
continue as a going concern,” the lab-grown diamond producer said in its quarterly
report.
A
production shutdown caused by the leak negatively affected fourth-quarter sales
last year. The incident could still impact the business even though it has
returned to full production and received a $350,000 insurance payout to cover damages,
the company said.
The rise
in revenue was due to higher prices as it shifted focus to white diamonds, the
company explained. The carat weight of the company’s diamonds continues to
increase and its color and clarity capabilities continue to improve, Gerald
McGuire, Scio’s chief executive officer (pictured), noted.
“Our customer base is growing, and we are beginning to see
the resulting improvements in our financials,” he said.
However,
low revenue to date means operations are subject to risk, the company
cautioned. The comments come after director James Korn quit, while publicly
criticizing management for alleged “horrific operational performance” and misleading
investors. Scio’s board set up a special investigation committee of two
independent directors which concluded the claims were “baseless and
unsupported.”
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Tags:
Gerald McGuire, James Korn, lab-grown diamonds, Rapaport News, scio, scio diamond, scio diamond technology, Synthetic diamonds, Synthetics
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