Scio Diamond Technology Corp (OTCBB:SCIO) reported 3Q2015 earnings results in which total revenue dropped compared to a year ago. However, strong execution helped to keep expenses down. The company also finished the quarter in a strong cash position thanks to equity offering and favorable borrowing terms.
Scio Diamond Technology Corp (OTCBB:SCIO)’s joint venture with Renaissance Diamonds Inc. formally took off. Under the joint venture, SCIO will develop high-quality diamond and Renaissance will distribute the same to wholesalers, national retailers and independent retailers. The deal with Renaissance is part of the continued execution of SCIO’s business plan as the company is focused on growing its diamond delivery.
The other significant step made by SCIO during the quarter was the $2.5 million funding deal with Heritage Gemstone Investors (HGI). The funding enabled the company to lower its borrowing interest rate to 7.25% from 18%. The rest of the funds would be channeled to increasing production capacity.
According to CEO, Gerald McGuire, they were able to make operational and strategic gains in the latest quarter, citing $4.5 million in fresh funding and improvement in go-to-market activities.
3Q earnings numbers
The company generated $109,358 of product revenue in the latest quarter, up 16.4% from a year ago. The increase in product revenue was primarily supported by the higher of units sold during the quarter. Without any licensing revenue for the quarter, SCIO reported total revenue of $109,358, below $343,915 a year earlier. The company generated $250,000 of Licensing revenue a year earlier.
Operating loss for the quarter came in at nearly $1.3 million, above $80,479 a year ago.
SCIO disclosed that the cost of goods sold in the latest quarter dropped 3.5% to $495,410. The decrease was supported by headcount reduction and lower depreciation. Combined expenses for the quarter were also down 4.4% to $420,671, a decrease supported by primary by lower executive compensation during the quarter.
Scio Diamond Technology Corp (OTCBB:SCIO) finished the quarter with more than $1 million in cash as of December 31, 2014, way above $47,987 as of March 31, 2014. The increase in cash was due to successful equity offering and increase in borrowing at lower interest rates.