The problems keep piling up for Scio.
The Greenville, S.C., lab-grown diamond producer, which over the summer installed a new CEO and board after a series of lawsuits and proxy battles, admitted in its latest Form 10-Q that it’s technically in default for a $1 million loan that matured on June 20.
“We are having discussions with [lender Platinum Capital Partners] on extending the term of the debt agreements, and currently, Platinum has indicated they will not take any action related to this default,” said the filing. Still, it added, the lender does have the option of raising the interest rate, foreclosing on the loan, and taking possession of collateral, including Scio’s assets and intellectual property.
The company also confirmed a “fact-finding” subpoena from the SEC, requesting documents regarding transactions between Scio and its predecessor, Apollo. And Scio’s widely watched joint venture in China to manufacture synthetic gemstones—which it has spent more than $600,000 setting up—remains in the development stage so far. The two trade partners in that venture, Shrikant Mehta and Danny Ratusby, did not reply to JCK’s request for comment.
In positive news, for the quarter ended June 30, Scio recorded net revenue of $454,338—which includes $375,000 in development fees from the joint venture—compared with $258,980 the prior year. It recorded a $1 million net loss for the quarter, an improvement over the $1.5 million loss the prior year. CEO Gerald McGuire told an investor conference call Scio will break even within the next year.
The star of Chow Tai Fook’s 85th anniversary fete on Nov. 28 was this 104 ct. D internally flawless brilliant-cut stunner. The Forevermark stone, cut from the Cullinan Heritage, a 507.55 ct. type IIA diamond found in the Cullinan mine in South Africa, was dubbed Cullinan Heritage I. Chow Tai Fook purchased the diamond at auction in 2010 for a record $35.3 million.