SCIO DIAMOND TECHNOLOGY CORP, 10-Q filed on 11/13/2015
Quarterly Report
Document And Entity Information
6 Months Ended
Sep. 30, 2015
Nov. 9, 2015
Document Information [Line Items]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 30, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q2 
 
Entity Registrant Name
Scio Diamond Technology Corp 
 
Entity Central Index Key
0001488934 
 
Current Fiscal Year End Date
--03-31 
 
Entity Filer Category
Smaller Reporting Company 
 
Trading Symbol
SCIO 
 
Entity Common Stock, Shares Outstanding
 
63,844,291 
CONDENSED BALANCE SHEETS (USD $)
Sep. 30, 2015
Mar. 31, 2015
Current Assets:
 
 
Cash and cash equivalents
$ 942,802 
$ 767,214 
Accounts receivable
220,224 
243,929 
Deferred contract costs
178,066 
179,969 
Inventory
333,464 
295,760 
Prepaid expenses
43,830 
57,012 
Prepaid rent
23,050 
23,050 
Total current assets
1,741,436 
1,566,934 
Property, plant and equipment
 
 
Facility
904,813 
904,813 
Manufacturing equipment
3,412,777 
2,927,761 
Other equipment
74,338 
71,059 
Construction in progress
0 
207,252 
Total property, plant and equipment
4,391,928 
4,110,885 
Less accumulated depreciation
(1,837,681)
(1,543,652)
Net property, plant and equipment
2,554,247 
2,567,233 
Intangible assets, net
7,660,528 
8,047,948 
Prepaid rent, noncurrent
7,713 
19,238 
Investment in joint venture - RCDC
64,743 
30,041 
TOTAL ASSETS
12,028,667 
12,231,394 
Current Liabilities:
 
 
Accounts payable
651,872 
708,760 
Customer deposits
13,911 
38,603 
Deferred revenue
215,480 
215,375 
Accrued expenses
331,469 
517,942 
Current portion of notes payable
64,182 
0 
Current portion of capital lease obligations
167,614 
0 
Total current liabilities
1,444,528 
1,480,680 
Notes Payable
2,235,818 
2,500,000 
Capital lease obligation, non-current
32,386 
0 
Other liabilities
105,791 
118,092 
TOTAL LIABILITIES
3,818,523 
4,098,772 
Common stock $0.001 par value, 75,000,000 shares authorized; 63,844,291 and 56,531,499 shares issued and outstanding at September 30, 2015 and March 31, 2015, respectively
63,845 
56,532 
Additional paid-in capital
28,571,897 
26,815,005 
Accumulated deficit
(20,425,598)
(18,738,915)
Total shareholders’ equity
8,210,144 
8,132,622 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 12,028,667 
$ 12,231,394 
CONDENSED BALANCE SHEETS (Parenthetical) (USD $)
Sep. 30, 2015
Mar. 31, 2015
Common stock, par value (in dollars per share)
$ 0.001 
$ 0.001 
Common stock, shares authorized
75,000,000 
75,000,000 
Common stock, shares issued
63,844,291 
56,531,499 
Common Stock, Shares, Outstanding
63,844,291 
56,531,499 
CONDENSED STATEMENTS OF OPERATIONS (USD $)
3 Months Ended 6 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Revenue
 
 
 
 
Product revenue, net
$ 236,292 
$ 103,976 
$ 408,467 
$ 183,314 
Licensing revenue
0 
0 
0 
375,000 
Revenue, net
236,292 
103,976 
408,467 
558,314 
Cost of goods sold
 
 
 
 
Cost of goods sold
461,279 
407,345 
876,646 
781,768 
Gross deficit
(224,987)
(303,369)
(468,179)
(223,454)
General and administrative expenses
 
 
 
 
Salaries and benefits
255,389 
163,832 
457,691 
560,700 
Professional and consulting fees
44,122 
(93,239)
96,065 
166,996 
Rent, equipment lease and facilities expense
40,961 
37,884 
79,974 
72,031 
Marketing costs
28,463 
8,179 
56,646 
18,867 
Corporate general and administrative
146,631 
58,106 
232,178 
182,259 
Depreciation and amortization
198,477 
200,124 
396,882 
400,248 
Forgiveness of severance liability
(137,561)
0 
(137,561)
0 
Loss from operations
(801,469)
(678,255)
(1,650,054)
(1,624,555)
Other expense
 
 
 
 
Income from RCDC joint venture
18,363 
0 
34,702 
0 
Interest expense
(26,482)
(70,238)
(71,331)
(132,165)
Net loss
$ (809,588)
$ (748,493)
$ (1,686,683)
$ (1,756,720)
Basic:
 
 
 
 
Weighted average number of shares outstanding (in shares)
58,385,140 
50,706,794 
57,464,860 
50,702,418 
Loss per share (in dollars per share)
$ (0.01)
$ (0.01)
$ (0.03)
$ (0.03)
Fully diluted:
 
 
 
 
Weighted average number of shares outstanding (in shares)
58,385,140 
50,706,794 
57,464,860 
50,702,418 
Loss per share (in dollars per share)
$ (0.01)
$ (0.01)
$ (0.03)
$ (0.03)
CONDENSED STATEMENTS OF CASH FLOW (USD $)
6 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash flows from operating activities:
 
 
Net loss
$ (1,686,683)
$ (1,756,720)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Depreciation and amortization
685,349 
760,829 
Expense for stock and inventory issued in exchange for services
0 
34,200 
Employee stock-based compensation
187,967 
155,000 
Income from joint venture - RCDC
(34,702)
0 
Inventory write down
0 
68,722 
Changes in assets and liabilities:
 
 
Decrease in accounts receivable and deferred revenue
23,810 
42,085 
Decrease in other receivables
0 
89,192 
Decrease/(increase) in prepaid expenses, rent, and deferred contract costs
22,710 
(8,642)
Increase in inventory and other assets
(37,704)
(112,996)
Increase/(decrease) in accounts payable
(148,888)
102,050 
Decrease in customer deposits
(24,692)
(137,884)
Increase/(decrease) in accrued expenses
(186,473)
17,743 
Increase/(decrease) in other liabilities
(12,301)
16,974 
Net cash used in operating activities
(1,211,607)
(729,447)
Cash flows from investing activities:
 
 
Purchase of property, plant and equipment
(189,043)
(13,152)
Net cash used in investing activities
(189,043)
(13,152)
Cash flows from financing activities:
 
 
Proceeds from note payable
0 
129,072 
Proceeds from the exercise of stock options
11,238 
0 
Proceeds from sale of common stock
1,565,000 
570,500 
Net cash provided by financing activities
1,576,238 
699,572 
Change in cash and cash equivalents
175,588 
(43,027)
Cash and cash equivalents, beginning of period
767,214 
47,987 
Cash and cash equivalents, end of period
942,802 
4,960 
Supplemental cash flow disclosures:
 
 
Cash paid for Interest, includes capitalized interest of $19,031
72,097 
0 
Cash paid for Income taxes
0 
0 
Non-cash financing activities:
 
 
Payment of accrued expenses with stock
0 
12,000 
Purchase of property, plant and equipment in accounts payable
92,000 
0 
Reclass of debt to capital lease due to completion of sale leaseback transaction
$ 200,000 
$ 0 
CONDENSED STATEMENTS OF CASH FLOW (Parenthetical) (USD $)
6 Months Ended
Sep. 30, 2015
Interest Costs Capitalized Adjustment
$ 19,031 
CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
Total
Common Stock
Additional Paid in Capital
Accumulated Deficit
Balance at Mar. 31, 2015
$ 8,132,622 
$ 56,532 
$ 26,815,005 
$ (18,738,915)
Balance (in shares) at Mar. 31, 2015
 
56,531,499 
 
 
Common stock issued for cash @ $0.30 per share
1,565,000 
5,217 
1,559,783 
0 
Common stock issued for cash @ $0.30 per share (in shares)
 
5,216,667 
 
 
Common stock issued upon exercise of stock options
11,238 
11 
11,227 
0 
Common stock issued upon exercise of stock options (in shares)
 
11,125 
 
 
Issuance of restricted stock to employees
0 
0 
0 
0 
Issuance of restricted stock to employees (in shares)
 
1,335,000 
 
 
Issuance of restricted stock to Renaissance Diamond Inc.
0 
0 
0 
0 
Issuance of restricted stock to Renaissance Diamond Inc. (in shares)
 
750,000 
 
 
Stock-based incentive compensation
187,967 
2,085 
185,882 
0 
Net loss for the six months ended September 30, 2015
(1,686,683)
0 
0 
(1,686,683)
Balance at Sep. 30, 2015
$ 8,210,144 
$ 63,845 
$ 28,571,897 
$ (20,425,598)
Balance (in shares) at Sep. 30, 2015
 
63,844,291 
 
 
CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical)
Sep. 30, 2015
Shares Issued, Price Per Share
$ 0.30 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Organization and Business
 
Scio Diamond Technology Corporation (referred to herein as the “Company”, “we”, “us” or “our”) was incorporated under the laws of the State of Nevada as Krossbow Holding Corp. on September 17, 2009. The Company’s focus is on man-made diamond technology development and commercialization.
 
Going Concern
 
The Company has generated little revenue to date and consequently its operations are subject to all risks inherent in the establishment and commercial launch of a new business enterprise.
 
These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management has responded to these circumstances by taking the following actions:
 
⋅
Successfully raised $1.565 million in the form of private placements of common shares to accredited investors. Funds have been used to fund current operations;
 
⋅
Recently expanded and continue to optimize production of existing manufacturing capabilities to increase product revenues;
 
⋅
Continued development of white gemstone material to expand our product offerings and enhance our product marketability; and
 
⋅
Continue to explore strategic joint ventures and technology licensing agreements to expand Company revenue and cash flow.
 
In the opinion of management, these actions have been sufficient to provide the Company with the liquidity it needs to meet its obligations and continue as a going concern. There can be no assurance, however, that the Company will successfully implement these plans. If necessary, the Company will pursue further issuances of equity securities, and future credit facilities or corporate borrowings. Additional issuances of equity or convertible debt securities will result in dilution to our current stockholders. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
Accounting Basis
 
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.
 
In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company’s financial position as of September 30, 2015 and March 31, 2015 and the results of operations and cash flows for the three and six month interim periods ended September 30, 2015 and 2014. The interim amounts have not been audited, and the results of operations for the interim periods herein are not necessarily indicative of the results of operations to be expected for future periods or the year. The balance sheet at March 31, 2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Form 10-K Annual Report of the Company for the year ended March 31, 2015.
 
In accordance with Accounting Standards Codification (“ASC”) 323, Investments—Equity Method and Joint Ventures, the Company uses the equity method of accounting for investments in corporate joint ventures for which the Company has the ability to exercise significant influence but does not control and is not the primary beneficiary. Significant influence typically exists if the Company has a 20% to 50% ownership interest in the venture unless predominant evidence to the contrary exists. Under this method of accounting, the Company records its proportionate share of the net earnings or losses of equity method investees and a corresponding increase or decrease to the investment balances. Cash payments to equity method investees such as additional investments, loans and advances and expenses incurred on behalf of investees, as well as payments from equity method investees such as dividends, distributions and repayments of loans and advances are recorded as adjustments to investment balances. When the Company’s carrying value in an equity method investee is reduced to zero, no further losses are recorded in the Company’s financial statements unless the Company guaranteed obligations of the equity method investee or has committed additional funding.   When the equity method investee subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.  The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.
 
Basic and Diluted Net Loss per Share
 
Net loss per share is presented under two formats: basic net loss per common share, which is computed using the weighted average number of common shares outstanding excluding non-vested restricted stock, during the period, and diluted net loss per common share, which is computed using the weighted average number of common shares outstanding, and the weighted average dilutive potential common shares outstanding, computed using the treasury stock method. Currently, for all periods presented, diluted net loss per share is the same as basic net loss per share as the inclusion of weighted average shares of non-vested restricted stock and common stock issuable upon the exercise of options and warrants would be anti-dilutive.
 
The following table summarizes the number of securities outstanding at each of the periods presented, which were not included in the calculation of diluted net loss per share as their inclusion would be anti-dilutive:
 
 
 
September 30,
 
 
 
2015
 
2014
 
Common stock options and warrants
 
 
2,015,753
 
 
6,459,295
 
Non-vested restricted stock
 
 
2,085,000
 
 
—
 
 
Allowance for Doubtful Accounts
 
An allowance for uncollectible accounts receivable is maintained for estimated losses from customers’ failure to make payment on accounts receivable due to the Company. Management determines the estimate of the allowance for uncollectible accounts receivable by considering a number of factors, including: (1) historical experience, (2) aging of accounts receivable and (3) specific information obtained by the Company on the financial condition and the current credit worthiness of its customers. The Company has determined that an allowance was not necessary at September 30, 2015 or March 31, 2015.
 
Inventories
 
Inventories are stated at the lower of average cost or market. The carrying value of inventory is reviewed and adjusted based upon slow moving and obsolete items. Inventory costs include material, labor, and manufacturing overhead and are determined by the “first-in, first-out” (FIFO) method. The components of inventories are as follows:
 
 
 
September 30,
 
March 31,
 
 
 
2015
 
2015
 
Raw materials and supplies
 
$
43,684
 
$
58,390
 
Work in process
 
 
40,882
 
 
31,371
 
Finished goods
 
 
248,898
 
 
205,999
 
 
 
$
333,464
 
$
295,760
 
 
During the six months ended September 30, 2014, we experienced selling prices lower than cost and as a result we recorded a lower of cost or market write down of $68,722 to the value of our inventory which was included in cost of goods sold. The estimation of the total write-down involved management judgments and assumptions including assumptions regarding future selling price forecasts, the estimated costs to complete, disposal costs and a normal profit margin.
 
Property, Plant and Equipment
 
Depreciation of property, plant and equipment is on a straight line basis beginning at the time it is placed in service, based on the following estimated useful lives:
 
 
 
Years
 
Machinery and equipment
 
3 to15
 
Furniture and fixtures
 
3 to10
 
Engineering equipment
 
5 to 12
 
 
Leasehold improvements which are included in facility fixed assets on the balance sheet are depreciated over the lesser of the remaining term of the lease or the life of the asset (generally three to seven years).
 
Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.
 
Intangible Assets
 
Acquired in-process research and development costs are considered to have an indefinite useful life until such time as they are put into service at which time they will be amortized on a straight-line basis over the shorter of their economic or legal useful life. Management evaluates indefinite life intangible assets for impairment on an annual basis and on an interim basis if events or changes in circumstances between annual impairment tests indicate that the asset might be impaired. The ongoing evaluation for impairment of its indefinite life intangible assets requires significant management estimates and judgment. Management reviews definite life intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges during the three and six months ended September 30, 2015 and 2014.
 
Stock-based Compensation
 
Stock-based compensation expense for the value of stock options is estimated on the date of the grant using the Black-Scholes option-pricing model. The Black-Scholes model takes into account implied volatility in the price of the Company’s stock, the risk-free interest rate, the estimated life of the equity-based award, the closing market price of the Company’s stock on the grant date and the exercise price. The estimates utilized in the Black-Scholes calculation involve inherent uncertainties and the application of management judgment.
 
Concentration of Credit Risk/Revenue Concentrations
 
During the three and six months ended September 30, 2015, the Company sold a majority of its production to the RCDC joint venture and had a receivable from RCDC at September 30, 2015 of $215,613. The Company expects this concentration of sales to RCDC to continue in the future.
 
Revenue Recognition
 
We recognize product revenue when persuasive evidence of an arrangement exists, delivery of products has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. For our Company, this generally means that we recognize revenue when we or our fabrication vendor has shipped finished product to the customer. Our sales terms do not allow for a right of return except for matters related to any manufacturing defects on our part.
 
For product sales to our joint venture partners for further processing and finishing, we currently defer all revenues when products are shipped. We currently recognize revenue at the earlier of when the joint venture partner sells the finished goods manufactured from our materials or we are paid for our goods. Licensing and development revenues are recognized in the month as detailed in appropriate licensing and development contracts. In the event that licensing funds are received prior to the contractual commitment, the Company will recognize deferred revenue (liability) for the amount received.
 
Recent Accounting Pronouncements
 
On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition guidance in Topic 605, "Revenue Recognition", and most industry-specific guidance throughout the Industry Topics of the Codification. The guidance also supersedes some cost guidance included in Subtopic 605-35, "Revenue Recognition- Contract-Type and Production-Type Contracts". On April 1, 2015, the FASB voted to defer the effective date of the pronouncement by one year. ASU 2014-9, as amended, is effective for annual periods, and interim periods within those years, beginning after December 31, 2017. An entity is required to apply the amendments using one of the following two methods: i) retrospectively to each prior period presented with three possible expedients: a) for completed contracts that begin and end in the same reporting period no restatement is required, b) for completed contract with variable consideration an entity may use the transaction price at completion rather than restating estimated variable consideration amounts in comparable reporting periods and c) for comparable reporting periods before date of initial application reduced disclosure requirements related to transaction price; ii) retrospectively with the cumulative effect of initially applying the amendment recognized at the date of initial application with additional disclosures for the differences of the prior guidance to the reporting periods compared to the new guidance and an explanation of the reasons for significant changes. We are required to adopt ASU 2014-09 in the first quarter of fiscal 2018, or in the first quarter of fiscal 2019, if deferred, and we are currently assessing the impact of this pronouncement on our financial statements.
 
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which requires management to assess, at each annual and interim reporting period, the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and provide related disclosures. The ASU is effective for our fiscal year ending March 31, 2017, with early adoption permitted. The Company has assessed the impact of this standard and does not believe that it will have a material impact on the Company’s financial statements or disclosures.
 
In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, ("ASU 2015-11"). This new guidance requires an entity to measure inventory at the lower of cost and net realizable value. Currently, entities measure inventory at the lower of cost and market. ASU 2015-11 replaces market with net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured under last-in, first-out or the retail inventory method. ASU 2015-11 requires prospective adoption for inventory measurements for fiscal years beginning after December 15, 2016, and interim periods within those years for public business entities. Early application is permitted. ASU 2015-11 is therefore effective in our fiscal year beginning April 1, 2017. We are evaluating the effect that ASU 2015-11 will have on our financial statements and related disclosures.
 
There are currently no other accounting standards that have been issued but not yet adopted by the Company that will have a significant impact on the Company’s financial position, results of operations or cash flows upon adoption.
INTANGIBLE ASSETS
INTANGIBLE ASSETS
NOTE 2 — INTANGIBLE ASSETS
 
Acquired in-process research and development costs are considered to have an indefinite useful life until such time as they are put into service at which time they will be amortized on a straight-line basis over the shorter of their economic or legal useful life.
 
Intangible assets consist of the following:
 
 
 
 
 
September 30,
 
March 31,
 
 
 
Life
 
2015
 
2015
 
Patents, gross
 
6.75 – 19.46
 
$
8,135,063
 
$
8,135,063
 
In-process research and development
 
Indefinite
 
 
1,832,370
 
 
1,832,370
 
 
 
 
 
 
9,967,433
 
 
9,967,433
 
Accumulated amortization
 
 
 
 
(2,306,905)
 
 
(1,919,485)
 
Net intangible assets
 
 
 
$
7,660,528
 
$
8,047,948
 
 
Total amortization expense for the three and six months ending September 30, 2015 was $193,710 and $387,420, respectively. The amortization expense for the three and six months ended September 30, 2014 was $193,710 and $387,211, respectively.
 
Total annual amortization expense of finite lived intangible assets is estimated to be as follows:
 
Fiscal Year Ending
 
 
 
Six months ending March 31, 2016
 
$
387,420
 
March 31, 2017
 
 
774,840
 
March 31, 2018
 
 
774,840
 
March 31, 2019
 
 
774,840
 
March 31, 2020
 
 
595,159
 
Thereafter
 
$
2,521,059
 
NOTES PAYABLE
NOTES PAYABLE
NOTE 3 — NOTES PAYABLE
 
On December 16, 2014 the Company entered into a Loan Agreement (the “HGI Loan Agreement”) and a Security Agreement (the “HGI Security Agreement”) with Heritage Gemstone Investors, LLC (“HGI”) providing for a $2,000,000 secured non-revolving line of credit (the “HGI Loan”). The HGI Loan, which is represented by a Promissory Note dated as of December 15, 2014 (the “HGI Note”), matures on December 15, 2017. Borrowings accrue interest at the rate of 7.25% per annum and the Company intends to make monthly interest payments. On December 18, 2014, $2,000,000 was drawn on the HGI Loan. The Company utilized funds drawn on the HGI Loan to repay its existing indebtedness and to continue to fund its ongoing operations. The HGI Loan Agreement contains a number of restrictions on the Company’s business, including restrictions on its ability to merge, sell assets, create or incur liens on assets, make distributions to its stockholders and sell, purchase or lease real or personal property or other assets or equipment. The HGI Loan Agreement contains standard provisions relating to a default and acceleration of the Company’s payment obligations thereunder upon the occurrence of an event of default, which includes, among other things, the failure to pay principal, interest, fees or other amounts payable under the agreement when due; failure to comply with specified agreements, covenants or obligations; cross-default with other indebtedness; the making of any material false representation or warranty; commencement of bankruptcy or other insolvency proceedings by or against the Company; and failure by the Company to maintain a book net worth of at least $4,000,000 at all times. The Company’s obligations under the HGI Loan Agreement are not guaranteed by any other party. The Company may prepay borrowings without premium or penalty upon notice to HGI as provided in the HGI Loan Agreement. The HGI Loan Agreement requires the Company to enter into the HGI Security Agreement. Under the HGI Security Agreement, the Company grants HGI a first priority security interest in the Company’s inventory, equipment, accounts and other rights to payments and intangibles as security for the HGI Loan.
 
Also on December 16, 2014, the Company entered into an agreement for the sale and lease of diamond growing equipment (the “Grower Sale-Lease Agreement”) with HGI to allow for the expansion of current growers and the purchase of new growers. Pursuant to the Grower Sale-Lease Agreement, the Company agreed to a sale-leaseback arrangement for certain diamond growers produced by the Company during the term of the Grower Sale-Leaseback Agreement by which the Company will sell diamond growers to HGI and then lease the growers back from HGI. The term of the Grower Sale-Leaseback Agreement is ten years. For the new and upgraded growers, the direct profit margin generated from the growers as defined in the Grower Sale-Lease Agreement will be split between the Company and HGI in accordance with the Grower Sale-Lease Agreement. The Grower Sale-Lease Agreement requires the Company to operate and service the growers, and requires HGI to up-fit certain existing growers and to make capital improvements to the new growers under certain circumstances. At the end of the Grower Sale-Leaseback Agreement, the Company takes ownership of the leased equipment. The Company will also have the right to repurchase the leased growers upon the occurrence of certain events prior to the expiration of the Grower Sale-Leaseback Agreement.
 
As of September 30, 2015, HGI has advanced the Company $300,000 to fund improvements to our current growers that will expand manufacturing capacity in our production facility and the Company considers this advance as notes payable. The Company completed the grower expansion during the three months ended September 30, 2015 and the assets were placed in service.
 
Payments to HGI for the portion of notes payable that funded capital improvements are contingent on the direct profit margin generated by the upgraded equipment and are expected to continue for three years. The Company has estimated our expected payments to HGI for the direct profit sharing related to these borrowings and determined that the current portion of this note payable is $64,182 at September 30, 2015, which is considered a current liability.
CAPITAL LEASES
CAPITAL LEASES
NOTE 4 – CAPITAL LEASES
 
As discussed in Note 3, the Company entered in the Grower Sale-Lease Agreement with HGI on December 16, 2014. HGI has advanced the Company $200,000 for the purchase of new grower equipment under the Sale-Leaseback Agreement. The Company considered this advance as a notes payable at March 31, 2015. The sale and leaseback transaction occurred during the three months ended September 30, 2015, and the Company has put the assets into service. Since the sale and leaseback has occurred, the Company has reclassified the $200,000 from notes payable to capital lease obligations. The value of the assets sold and leased back was $200,000 and the Company did not recognize any gain or loss on the sale and lease back transaction.
 
Payments to HGI under the capital lease are contingent on the direct profit margin generated by the equipment as defined in the Grower Sale-Lease Agreement and will continue until the lease obligation is satisfied. The Company has estimated our expected payments to HGI for the direct profit margin sharing related to the equipment under capital lease and determined that the current portion of this capital lease obligation is $167,614 at September 30, 2015, which is considered a current liability.
CAPITAL STOCK
CAPITAL STOCK
NOTE 5 — CAPITAL STOCK
 
The authorized capital of the Company is 75,000,000 common shares with a par value of $  0.001 per share.
 
During the three months ended September 30, 2015, the Board of Directors approved the issuance and sale of up to 5,220,000 shares of common stock to accredited investors at a price of $0.30. The Company closed the offering having issued 5,216,667 shares under this offering and raised $1,565,000. The Company did not incur any material expenses related to the offering.
 
The Company had 63,844,291 shares of common stock issued and outstanding as of September 30, 2015. This total includes 2,085,000 shares of non-vested restricted stock.
 
The Company had 988,045 warrants outstanding with a weighted average exercise price of $1.15 per share as of September, 2015. During the six months ended September 30, 2015, 4,578,750 warrants expired and none were issued. During the next three months of 2015, 312,500 warrants will expire with the balance of the warrants will expire in 2017 and 2018.
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION
NOTE 6 — SHARE-BASED COMPENSATION
 
The Company currently has one equity-based compensation plan under which stock-based compensation awards can be granted to directors, officers, employees and consultants providing bona fide services to or for the Company. The Company’s 2012 Share Incentive Plan was adopted on May 7, 2012 (the “2012 Share Incentive Plan” or “Plan”) and allows the Company to issue up to 5,000,000 shares of its common stock pursuant to awards granted under the 2012 Share Incentive Plan. The Plan permits the granting of stock options, stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards, other stock-based awards, or any combination of the foregoing. The only awards that have been issued under the Plan are stock options. Because the Plan has not been approved by our shareholders, all such stock option awards are non-qualified stock options.
 
On May 7, 2015, the Board of Directors of the Company approved restricted stock awards for Mr. Gerald McGuire, the Company President and Chief Executive Officer and Mr. Jonathan Pfohl, the Company Chief Financial Officer. Mssrs. McGuire and Pfohl were granted 400,000 and 385,000 restricted shares of stock, respectively, that will vest on July 1, 2018. The restricted shares are valued at $1.03, the closing price of the Company’s stock on May 7, 2015. Also on May 7, 2015, the Board of Directors granted Renaissance Diamond Inc. a restricted stock award of 200,000 shares that only vests based on the attainment of specific performance criteria.
 
On July 1, 2015, the Renaissance Diamond Inc. was granted restricted stock awards for 550,000 shares that only vest based on the attainment of specific performance criteria.
 
On August 14, 2015, the Board of Directors of the Company approved restricted stock awards for Mr. McGuire and Mr. Pfohl. Mssrs. McGuire and Pfohl were granted 400,000 and 150,000 restricted shares of stock, respectively, that will vest on July 1, 2018. The restricted shares are valued at $0.85, the closing price of the Company’s stock on August 14, 2015.
 
The Company recognizes compensation expense for the restricted stock awards to Company executives on a straight line basis over the vesting period. The Company recognized $90,547 and $133,102 in compensation expenses for these awards during the three months and six months ended September 30, 2015, respectively. For the restricted stock awards to Renaissance Diamond, Inc., the Company does not anticipate recognizing any financial impact for these restricted stock awards until it is deemed likely that the performance criteria will be met.
 
The following sets forth the restricted stock outstanding as of September 30, 2015:
 
Restricted Stock
 
Shares
 
Restricted stock outstanding March 31, 2015
 
 
—
 
Granted
 
 
2,085,000
 
Vested
 
 
—
 
Expired/cancelled
 
 
—
 
Restricted stock outstanding September  30, 2015
 
 
2,085,000
 
 
On May 7, 2015, the Board of Directors granted Renaissance Diamond Inc. non-qualified stock options for 333,333 shares of common stock. These options will vest on June 29, 2016 if the RCDC joint venture attains specific performance criteria. The strike price of these options will be set at fifty percent of the market closing price upon vesting. The options will need to be exercised within 60 days of vesting. . The Company does not anticipate recognizing any financial impact for these options until it is deemed likely that the performance criteria will be met.
 
In addition, on May 7, 2015, the Company granted seven non-executive employees options to purchase a total of 685,000 shares of the Company’s stock. The vesting schedule for these options call for 33.3% to vest upon the first, second and third anniversaries of the grant date. The exercise price of $1.03 per share is equal to the closing price of a share of the Company’s common stock on the date of grant. Using the Black-Scholes option pricing model, management has estimated these options had a value of $0.98 per option on the date of the grant. The Black-Scholes model assumptions used were: Expected dividend yield, 0.00%; Risk-free interest rate, 2.18%; Expected life in years, 10.0; Expected volatility, 124.3%; Forfeiture rate, 25.0%. None of these options were vested upon issuance and the Company recognized $32,919 and $54,865 in compensation costs for these options during the three and six months ending September 30, 2015, respectively.
 
The following sets forth the employee options to purchase shares of the Company’s stock issued and outstanding as of September 30, 2015 and does not include options granted to Renaissance Diamond Inc.:
 
 
 
 
 
Weighted-
 
Weighted-Average
 
 
 
 
 
Average Exercise
 
Remaining
 
Options
 
Shares
 
Price
 
Contractual Term
 
Employee options outstanding March 31, 2015
 
 
232,500
 
$
0.35
 
 
1.45
 
Granted
 
 
685,000
 
 
1.03
 
 
9.61
 
Exercised
 
 
(11,125)
 
 
0.51
 
 
—
 
Expired/cancelled
 
 
(212,000)
 
 
0.83
 
 
—
 
Employee options outstanding September 30, 2015
 
 
694,375
 
$
0.87
 
 
7.63
 
Exercisable at September 30, 2015
 
 
12,000
 
$
0.33
 
 
0.99
 
 
A summary of the status of non-vested employee options as of September 30, 2015 and changes during the six months ended September 30, 2015 is presented below.
 
 
 
 
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Grant-Date
 
Non-vested Shares
 
Shares
 
Fair Value
 
Non-vested at March 31, 2015
 
 
209,375
 
 
0.21
 
Granted
 
 
685,000
 
 
0.98
 
Vested
 
 
—
 
 
—
 
Expired/cancelled: non-vested
 
 
(212,000)
 
 
0.76
 
Non-vested at September 30, 2015
 
 
682,375
 
$
0.81
 
 
The following table summarizes information about employee stock options outstanding by price range as of September 30, 2015:
 
 
 
 
Options Outstanding
 
Options Exercisable
 
 
 
 
 
 
Weighted Average
 
 
 
 
 
 
 
 
 
 
 
 
Remaining
 
Weighted
 
Number
 
 
 
Exercise
 
Number
 
Contractual Life
 
Average Exercise
 
of
 
Weighted Average
 
Price
 
Outstanding
 
(years)
 
Price
 
Shares
 
Exercise Price
 
$
1.03
 
 
535,000
 
 
9.61
 
$
1.03
 
 
—
 
$
—
 
$
0.33
 
 
159,375
 
 
0.99
 
 
0.33
 
 
12,000
 
 
0.33
 
 
 
 
 
694,375
 
 
7.63
 
$
0.87
 
 
12,000
 
$
0.33
 
 
At September 30, 2015, unrecognized compensation costs related to non-vested employee awards was $502,791. Of this unrecognized compensation cost, $30,949 is only expected to be recognized if certain performance criteria are attained over a weighted average period of 1.0 years.
RELATED PARTIES
RELATED PARTIES
NOTE 7 — RELATED PARTIES
 
On August 7, 2015, the Company reached an amendment to the separation, waiver and release agreement executed on December 4, 2012 with our former Chief Executive Officer Mr. Joseph Lancia. This amendment allowed for no further severance payments to Mr. Lancia and resulted in the Company reversing $137,561 in previously accrued severance liabilities. The Company included this adjustment as a forgiveness of severance liability in statement of operations for the three and six months ended September 30, 2015.
 
During the three and six months ended September 30, 2015, the Company sold product to the RCDC joint venture valued at $27,200 and $184,000, respectively. The Company defers recognition of revenues and expenses on these sales to RCDC until finished goods are sold by RCDC or RCDC pays the Company for its purchases. For the three and six months ended September 30, 2015, the Company recognized $60,645 and $183,895 in revenue for product sold to RCDC. As of September 30, 2015, the Company has deferred $215,480 of revenue and $178,066 of expenses related to our sales to RCDC. In addition, at September 30, 2015, the Company had a receivable from RCDC of $215,613. Additional detail on the RCDC joint venture is detailed in Note 9.
 
The Company has granted Renaissance Diamond Inc., our partner in the RCDC joint venture, restricted stock awards totaling 750,000 shares that only vests based on the attainment of specific performance criteria.
LITIGATION
LITIGATION
NOTE 8 – LITIGATION
 
We are subject, from time to time, to various claims, lawsuits or actions that arise in the ordinary course of business. As of September 30, 2015 there were no material outstanding claims by the Company or against the Company.
 
On May 16, 2014, the Company received a subpoena issued by the SEC ordering the provision of documents and related information concerning various corporate transactions between the Company and its predecessors and other persons and entities.  The Company continues to cooperate with this inquiry.
INVESTMENT IN RCDC JOINT VENTURE
INVESTMENT IN RCDC JOINT VENTURE
NOTE 9 — INVESTMENT IN RCDC JOINT VENTURE
 
On December 18, 2014 the Company entered into an arrangement with Renaissance Diamonds, Inc. (“Renaissance”) through the execution of a limited liability company agreement (the “LLC Agreement”) of Renaissance Created Diamond Company, LLC, a Florida limited liability company (“RCDC”), pursuant to which the Company and Renaissance are each 50% members of RCDC.
 
The LLC Agreement provides that RCDC is a manager-managed limited liability company, and each of the Company and Renaissance will appoint one manager, with both such managers appointing a third manager.  The managers will manage the day-to-day operations of RCDC, subject to certain customary limitations on managerial actions that require the consent of the Company and Renaissance, including but not limited to making or guaranteeing loans, distributing cash or other property to the members of RCDC, entering into affiliate transactions, amending or modifying limited liability company organizational documents, and entering into major corporate events, such as a merger, acquisition or asset sale. The arrangement was entered into in order to facilitate the development of procedures and recipes for, and to market and sell, lab-grown fancy-colored diamonds.  Pursuant to the LLC Agreement, the arrangement will last three years, unless terminated earlier, with the option to automatically renew for additional two-year periods. The Company made an initial $1,000 investment in RCDC and was granted a 50% equity stake. RCDC has the right of first refusal to purchase diamond gemstones from the Company, including rough diamond preforms or processed stones.  RCDC purchase rough diamond material produced by the Company, finishes the rough gemstones and, in turn, sells the finished stones to various retailers and other participants in the market for gemstones.  Profits generated by RCDC’s operations will be distributed between the Company and Renaissance according to the terms of the LLC Agreement.
 
Through September 30, 2015 the operations of RCDC have been focused on the development and processing of diamond material into finished Gemstone material and establishing sales and distribution channels for the finished goods. During the three and six months ended September 30, 2015, the Company sold product to RCDC valued at $27,200 and $184,000, respectively. The Company defers recognition of revenues and expenses on these sales to RCDC until finished goods are sold by RCDC or RCDC pays the Company for its purchases. For the three and six months ended September 30, 2015, the Company recognized $60,645 and $183,895 in revenue for product sold to RCDC. As of September 30, 2015, the Company has deferred $215,480 of revenue and $178,066 of expenses related to our sales to RCDC. The Company anticipates recognizing this deferred revenue and expense at the earlier date of RCDC selling through its inventory or the Company collects its receivables from RCDC.
 
The Company utilizes the equity method of accounting for its investment in RCDC. As such, the Company recognized $18,363 and $34,702 as its proportional shares of RCDC’s net income during the three and six months ended September 30, 2015, respectively, as other income.
 
Rollforward of the Company’s ownership interest in the joint venture for the six months ended September 30, 2015:
 
Balance of ownership interest in joint venture at March 31, 2015
 
$
30,041
 
Aggregate fiscal 2016 equity gain – share of joint venture income
 
 
34,702
 
Balance of ownership interest in joint venture at September 30, 2015
 
$
64,743
 
 
 
 
 
 
Cumulative recognized income on ownership interest in joint venture at September 30, 2015
 
$
63,743
 
 
Selected financial results for RCDC for the six months ended September 30, 2015 are as follows:
 
Revenues
 
$
382,261
 
Expenses
 
 
312,859
 
Net Income
 
$
69,402
 
 
 
 
 
 
Total Assets
 
$
680,755
 
 
 
 
 
 
Total Liabilities
 
$
551,270
 
Total Partners Capital
 
 
129,485
 
Total Liabilities and Partner Capital
 
$
680,755
 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Going Concern 
Going Concern
 
The Company has generated little revenue to date and consequently its operations are subject to all risks inherent in the establishment and commercial launch of a new business enterprise.
 
These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management has responded to these circumstances by taking the following actions:
 
⋅
Successfully raised $1.565 million in the form of private placements of common shares to accredited investors. Funds have been used to fund current operations;
 
⋅
Recently expanded and continue to optimize production of existing manufacturing capabilities to increase product revenues;
 
⋅
Continued development of white gemstone material to expand our product offerings and enhance our product marketability; and
 
⋅
Continue to explore strategic joint ventures and technology licensing agreements to expand Company revenue and cash flow.
 
In the opinion of management, these actions have been sufficient to provide the Company with the liquidity it needs to meet its obligations and continue as a going concern. There can be no assurance, however, that the Company will successfully implement these plans. If necessary, the Company will pursue further issuances of equity securities, and future credit facilities or corporate borrowings. Additional issuances of equity or convertible debt securities will result in dilution to our current stockholders. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Accounting Basis 
Accounting Basis
 
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.
 
In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company’s financial position as of September 30, 2015 and March 31, 2015 and the results of operations and cash flows for the three and six month interim periods ended September 30, 2015 and 2014. The interim amounts have not been audited, and the results of operations for the interim periods herein are not necessarily indicative of the results of operations to be expected for future periods or the year. The balance sheet at March 31, 2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Form 10-K Annual Report of the Company for the year ended March 31, 2015.
 
In accordance with Accounting Standards Codification (“ASC”) 323, Investments—Equity Method and Joint Ventures, the Company uses the equity method of accounting for investments in corporate joint ventures for which the Company has the ability to exercise significant influence but does not control and is not the primary beneficiary. Significant influence typically exists if the Company has a 20% to 50% ownership interest in the venture unless predominant evidence to the contrary exists. Under this method of accounting, the Company records its proportionate share of the net earnings or losses of equity method investees and a corresponding increase or decrease to the investment balances. Cash payments to equity method investees such as additional investments, loans and advances and expenses incurred on behalf of investees, as well as payments from equity method investees such as dividends, distributions and repayments of loans and advances are recorded as adjustments to investment balances. When the Company’s carrying value in an equity method investee is reduced to zero, no further losses are recorded in the Company’s financial statements unless the Company guaranteed obligations of the equity method investee or has committed additional funding.   When the equity method investee subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.  The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.
Basic and Diluted Net Loss per Share 
Basic and Diluted Net Loss per Share
 
Net loss per share is presented under two formats: basic net loss per common share, which is computed using the weighted average number of common shares outstanding excluding non-vested restricted stock, during the period, and diluted net loss per common share, which is computed using the weighted average number of common shares outstanding, and the weighted average dilutive potential common shares outstanding, computed using the treasury stock method. Currently, for all periods presented, diluted net loss per share is the same as basic net loss per share as the inclusion of weighted average shares of non-vested restricted stock and common stock issuable upon the exercise of options and warrants would be anti-dilutive.
 
The following table summarizes the number of securities outstanding at each of the periods presented, which were not included in the calculation of diluted net loss per share as their inclusion would be anti-dilutive:
 
 
 
September 30,
 
 
 
2015
 
2014
 
Common stock options and warrants
 
 
2,015,753
 
 
6,459,295
 
Non-vested restricted stock
 
 
2,085,000
 
 
—
 
Allowance for Doubtful Accounts 
Allowance for Doubtful Accounts
 
An allowance for uncollectible accounts receivable is maintained for estimated losses from customers’ failure to make payment on accounts receivable due to the Company. Management determines the estimate of the allowance for uncollectible accounts receivable by considering a number of factors, including: (1) historical experience, (2) aging of accounts receivable and (3) specific information obtained by the Company on the financial condition and the current credit worthiness of its customers. The Company has determined that an allowance was not necessary at September 30, 2015 or March 31, 2015.
Inventories 
Inventories
 
Inventories are stated at the lower of average cost or market. The carrying value of inventory is reviewed and adjusted based upon slow moving and obsolete items. Inventory costs include material, labor, and manufacturing overhead and are determined by the “first-in, first-out” (FIFO) method. The components of inventories are as follows:
 
 
 
September 30,
 
March 31,
 
 
 
2015
 
2015
 
Raw materials and supplies
 
$
43,684
 
$
58,390
 
Work in process
 
 
40,882
 
 
31,371
 
Finished goods
 
 
248,898
 
 
205,999
 
 
 
$
333,464
 
$
295,760
 
 
During the six months ended September 30, 2014, we experienced selling prices lower than cost and as a result we recorded a lower of cost or market write down of $68,722 to the value of our inventory which was included in cost of goods sold. The estimation of the total write-down involved management judgments and assumptions including assumptions regarding future selling price forecasts, the estimated costs to complete, disposal costs and a normal profit margin.
Property, Plant and Equipment 
Property, Plant and Equipment
 
Depreciation of property, plant and equipment is on a straight line basis beginning at the time it is placed in service, based on the following estimated useful lives:
 
 
 
Years
 
Machinery and equipment
 
3 to15
 
Furniture and fixtures
 
3 to10
 
Engineering equipment
 
5 to 12
 
 
Leasehold improvements which are included in facility fixed assets on the balance sheet are depreciated over the lesser of the remaining term of the lease or the life of the asset (generally three to seven years).
 
Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.
Intangible Assets 
Intangible Assets
 
Acquired in-process research and development costs are considered to have an indefinite useful life until such time as they are put into service at which time they will be amortized on a straight-line basis over the shorter of their economic or legal useful life. Management evaluates indefinite life intangible assets for impairment on an annual basis and on an interim basis if events or changes in circumstances between annual impairment tests indicate that the asset might be impaired. The ongoing evaluation for impairment of its indefinite life intangible assets requires significant management estimates and judgment. Management reviews definite life intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges during the three and six months ended September 30, 2015 and 2014.
Stock-based Compensation 
Stock-based Compensation
 
Stock-based compensation expense for the value of stock options is estimated on the date of the grant using the Black-Scholes option-pricing model. The Black-Scholes model takes into account implied volatility in the price of the Company’s stock, the risk-free interest rate, the estimated life of the equity-based award, the closing market price of the Company’s stock on the grant date and the exercise price. The estimates utilized in the Black-Scholes calculation involve inherent uncertainties and the application of management judgment.
Concentration of Credit Risk 
Concentration of Credit Risk/Revenue Concentrations
 
During the three and six months ended September 30, 2015, the Company sold a majority of its production to the RCDC joint venture and had a receivable from RCDC at September 30, 2015 of $215,613. The Company expects this concentration of sales to RCDC to continue in the future.
Revenue Recognition 
Revenue Recognition
 
We recognize product revenue when persuasive evidence of an arrangement exists, delivery of products has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. For our Company, this generally means that we recognize revenue when we or our fabrication vendor has shipped finished product to the customer. Our sales terms do not allow for a right of return except for matters related to any manufacturing defects on our part.
 
For product sales to our joint venture partners for further processing and finishing, we currently defer all revenues when products are shipped. We currently recognize revenue at the earlier of when the joint venture partner sells the finished goods manufactured from our materials or we are paid for our goods. Licensing and development revenues are recognized in the month as detailed in appropriate licensing and development contracts. In the event that licensing funds are received prior to the contractual commitment, the Company will recognize deferred revenue (liability) for the amount received.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
 
On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition guidance in Topic 605, "Revenue Recognition", and most industry-specific guidance throughout the Industry Topics of the Codification. The guidance also supersedes some cost guidance included in Subtopic 605-35, "Revenue Recognition- Contract-Type and Production-Type Contracts". On April 1, 2015, the FASB voted to defer the effective date of the pronouncement by one year. ASU 2014-9, as amended, is effective for annual periods, and interim periods within those years, beginning after December 31, 2017. An entity is required to apply the amendments using one of the following two methods: i) retrospectively to each prior period presented with three possible expedients: a) for completed contracts that begin and end in the same reporting period no restatement is required, b) for completed contract with variable consideration an entity may use the transaction price at completion rather than restating estimated variable consideration amounts in comparable reporting periods and c) for comparable reporting periods before date of initial application reduced disclosure requirements related to transaction price; ii) retrospectively with the cumulative effect of initially applying the amendment recognized at the date of initial application with additional disclosures for the differences of the prior guidance to the reporting periods compared to the new guidance and an explanation of the reasons for significant changes. We are required to adopt ASU 2014-09 in the first quarter of fiscal 2018, or in the first quarter of fiscal 2019, if deferred, and we are currently assessing the impact of this pronouncement on our financial statements.
 
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which requires management to assess, at each annual and interim reporting period, the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and provide related disclosures. The ASU is effective for our fiscal year ending March 31, 2017, with early adoption permitted. The Company has assessed the impact of this standard and does not believe that it will have a material impact on the Company’s financial statements or disclosures.
 
In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, ("ASU 2015-11"). This new guidance requires an entity to measure inventory at the lower of cost and net realizable value. Currently, entities measure inventory at the lower of cost and market. ASU 2015-11 replaces market with net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured under last-in, first-out or the retail inventory method. ASU 2015-11 requires prospective adoption for inventory measurements for fiscal years beginning after December 15, 2016, and interim periods within those years for public business entities. Early application is permitted. ASU 2015-11 is therefore effective in our fiscal year beginning April 1, 2017. We are evaluating the effect that ASU 2015-11 will have on our financial statements and related disclosures.
 
There are currently no other accounting standards that have been issued but not yet adopted by the Company that will have a significant impact on the Company’s financial position, results of operations or cash flows upon adoption.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
Summary of anti-dilutive securities excluded from the calculation of diluted net loss per share 
The following table summarizes the number of securities outstanding at each of the periods presented, which were not included in the calculation of diluted net loss per share as their inclusion would be anti-dilutive:
 
 
 
September 30,
 
 
 
2015
 
2014
 
Common stock options and warrants
 
 
2,015,753
 
 
6,459,295
 
Non-vested restricted stock
 
 
2,085,000
 
 
—
 
Schedule of components of inventories 
The components of inventories are as follows:
 
 
 
September 30,
 
March 31,
 
 
 
2015
 
2015
 
Raw materials and supplies
 
$
43,684
 
$
58,390
 
Work in process
 
 
40,882
 
 
31,371
 
Finished goods
 
 
248,898
 
 
205,999
 
 
 
$
333,464
 
$
295,760
 
Schedule of estimated useful lives of property, plant and equipment 
Depreciation of property, plant and equipment is on a straight line basis beginning at the time it is placed in service, based on the following estimated useful lives:
 
 
 
Years
 
Machinery and equipment
 
3 to15
 
Furniture and fixtures
 
3 to10
 
Engineering equipment
 
5 to 12
 
INTANGIBLE ASSETS (Tables)
Schedule of intangible assets 
Intangible assets consist of the following:
 
 
 
 
 
September 30,
 
March 31,
 
 
 
Life
 
2015
 
2015
 
Patents, gross
 
6.75 – 19.46
 
$
8,135,063
 
$
8,135,063
 
In-process research and development
 
Indefinite
 
 
1,832,370
 
 
1,832,370
 
 
 
 
 
 
9,967,433
 
 
9,967,433
 
Accumulated amortization
 
 
 
 
(2,306,905)
 
 
(1,919,485)
 
Net intangible assets
 
 
 
$
7,660,528
 
$
8,047,948
 
Schedule of estimated annual amortization expense of intangible assets 
Fiscal Year Ending
 
 
 
Six months ending March 31, 2016
 
$
387,420
 
March 31, 2017
 
 
774,840
 
March 31, 2018
 
 
774,840
 
March 31, 2019
 
 
774,840
 
March 31, 2020
 
 
595,159
 
Thereafter
 
$
2,521,059
 
SHARE-BASED COMPENSATION (Tables)
Schedule of restricted stock outstanding 
The following sets forth the restricted stock outstanding as of September 30, 2015:
 
Restricted Stock
 
Shares
 
Restricted stock outstanding March 31, 2015
 
 
—
 
Granted
 
 
2,085,000
 
Vested
 
 
—
 
Expired/cancelled
 
 
—
 
Restricted stock outstanding September  30, 2015
 
 
2,085,000
 
Schedule of options to purchase shares of the Company's stock issued and outstanding 
The following sets forth the employee options to purchase shares of the Company’s stock issued and outstanding as of September 30, 2015 and does not include options granted to Renaissance Diamond Inc.:
 
 
 
 
 
Weighted-
 
Weighted-Average
 
 
 
 
 
Average Exercise
 
Remaining
 
Options
 
Shares
 
Price
 
Contractual Term
 
Employee options outstanding March 31, 2015
 
 
232,500
 
$
0.35
 
 
1.45
 
Granted
 
 
685,000
 
 
1.03
 
 
9.61
 
Exercised
 
 
(11,125)
 
 
0.51
 
 
—
 
Expired/cancelled
 
 
(212,000)
 
 
0.83
 
 
—
 
Employee options outstanding September 30, 2015
 
 
694,375
 
$
0.87
 
 
7.63
 
Exercisable at September 30, 2015
 
 
12,000
 
$
0.33
 
 
0.99
 
Summary of the status of non-vested shares 
A summary of the status of non-vested employee options as of September 30, 2015 and changes during the six months ended September 30, 2015 is presented below.
 
 
 
 
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Grant-Date
 
Non-vested Shares
 
Shares
 
Fair Value
 
Non-vested at March 31, 2015
 
 
209,375
 
 
0.21
 
Granted
 
 
685,000
 
 
0.98
 
Vested
 
 
—
 
 
—
 
Expired/cancelled: non-vested
 
 
(212,000)
 
 
0.76
 
Non-vested at September 30, 2015
 
 
682,375
 
$
0.81
 
Summary of information about stock options outstanding by price range 
The following table summarizes information about employee stock options outstanding by price range as of September 30, 2015:
 
 
 
 
Options Outstanding
 
Options Exercisable
 
 
 
 
 
 
Weighted Average
 
 
 
 
 
 
 
 
 
 
 
 
Remaining
 
Weighted
 
Number
 
 
 
Exercise
 
Number
 
Contractual Life
 
Average Exercise
 
of
 
Weighted Average
 
Price
 
Outstanding
 
(years)
 
Price
 
Shares
 
Exercise Price
 
$
1.03
 
 
535,000
 
 
9.61
 
$
1.03
 
 
—
 
$
—
 
$
0.33
 
 
159,375
 
 
0.99
 
 
0.33
 
 
12,000
 
 
0.33
 
 
 
 
 
694,375
 
 
7.63
 
$
0.87
 
 
12,000
 
$
0.33
 
INVESTMENT IN RCDC JOINT VENTURE (Tables)
Schedule Of Rollforward Of Ownership Interest In Joint Venture 
Rollforward of the Company’s ownership interest in the joint venture for the six months ended September 30, 2015:
 
Balance of ownership interest in joint venture at March 31, 2015
 
$
30,041
 
Aggregate fiscal 2016 equity gain – share of joint venture income
 
 
34,702
 
Balance of ownership interest in joint venture at September 30, 2015
 
$
64,743
 
 
 
 
 
 
Cumulative recognized income on ownership interest in joint venture at September 30, 2015
 
$
63,743
 
Schedule Of Selected Financial Results Of Joint Venture 
Selected financial results for RCDC for the six months ended September 30, 2015 are as follows:
 
Revenues
 
$
382,261
 
Expenses
 
 
312,859
 
Net Income
 
$
69,402
 
 
 
 
 
 
Total Assets
 
$
680,755
 
 
 
 
 
 
Total Liabilities
 
$
551,270
 
Total Partners Capital
 
 
129,485
 
Total Liabilities and Partner Capital
 
$
680,755
 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)
6 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Common stock options and warrants (in shares)
2,015,753 
6,459,295 
Restricted Stock [Member]
 
 
Non-vested restricted stock
2,085,000 
0 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $)
Sep. 30, 2015
Mar. 31, 2015
Inventories
 
 
Raw materials and supplies
$ 43,684 
$ 58,390 
Work in process
40,882 
31,371 
Finished goods
248,898 
205,999 
Inventory Net
$ 333,464 
$ 295,760 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2)
6 Months Ended
Sep. 30, 2015
Machinery and Equipment [Member] |
Maximum [Member]
 
Property, Plant and Equipment
 
Estimated useful lives
15 years 
Machinery and Equipment [Member] |
Minimum [Member]
 
Property, Plant and Equipment
 
Estimated useful lives
3 years 
Furniture and Fixtures [Member] |
Maximum [Member]
 
Property, Plant and Equipment
 
Estimated useful lives
10 years 
Furniture and Fixtures [Member] |
Minimum [Member]
 
Property, Plant and Equipment
 
Estimated useful lives
3 years 
Engineering equipment [Member] |
Maximum [Member]
 
Property, Plant and Equipment
 
Estimated useful lives
12 years 
Engineering equipment [Member] |
Minimum [Member]
 
Property, Plant and Equipment
 
Estimated useful lives
5 years 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $)
6 Months Ended
Sep. 30, 2015
Sep. 30, 2014
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 
Inventory reserves
 
$ 68,722 
Proceeds from Issuance of Private Placement
1,565,000 
 
Renaissance Created Diamond Company [Member]
 
 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 
Other Receivables
$ 215,613 
 
Maximum
 
 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 
Equity Method Investment, Ownership Percentage
50.00% 
 
Minimum
 
 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 
Equity Method Investment, Ownership Percentage
20.00% 
 
INTANGIBLE ASSETS (Details) (USD $)
6 Months Ended
Sep. 30, 2015
Mar. 31, 2015
Sep. 30, 2015
Patents [Member]
Mar. 31, 2015
Patents [Member]
Sep. 30, 2015
Patents [Member]
Minimum [Member]
Sep. 30, 2015
Patents [Member]
Maximum [Member]
Sep. 30, 2015
In Process Research and Development [Member]
Mar. 31, 2015
In Process Research and Development [Member]
INTANGIBLE ASSETS
 
 
 
 
 
 
 
 
Finite-Lived Intangible Assets, Gross
$ 9,967,433 
$ 9,967,433 
$ 8,135,063 
$ 8,135,063 
 
 
$ 1,832,370 
$ 1,832,370 
Accumulated amortization
(2,306,905)
(1,919,485)
 
 
 
 
 
 
Net intangible assets
$ 7,660,528 
$ 8,047,948 
 
 
 
 
 
 
Amortization period
 
 
 
 
6 years 9 months 
19 years 5 months 16 days 
 
 
INTANGIBLE ASSETS (Details 1) (USD $)
Sep. 30, 2015
Estimated annual amortization expense of intangible assets
 
Six months ending March 31, 2016
$ 387,420 
March 31, 2017
774,840 
March 31, 2018
774,840 
March 31, 2019
774,840 
March 31, 2020
595,159 
Thereafter
$ 2,521,059 
INTANGIBLE ASSETS (Details Textual) (USD $)
3 Months Ended 6 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Intangible Assets
$ 193,710 
$ 193,710 
$ 387,420 
$ 387,211 
NOTES PAYABLE (Details Textual) (USD $)
0 Months Ended 1 Months Ended
Sep. 30, 2015
Mar. 31, 2015
Dec. 16, 2014
Sep. 30, 2015
Heritage Gemstone Investors Llc [Member]
Manufacturing Facility [Member]
Dec. 16, 2014
Hgi Loan Agreement [Member]
Dec. 18, 2014
Hgi Loan Agreement [Member]
Notes payable
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
$ 2,000,000 
 
Annual interest rate (as a percent)
 
 
 
 
7.25% 
 
Loan draw
 
 
 
 
 
2,000,000 
Minimum Amount Of Maintain Book Net Worth
 
 
4,000,000 
 
 
 
Other Borrowings
 
 
 
300,000 
 
 
Debt Instrument, Maturity Date
 
 
 
 
Dec. 15, 2017 
 
Notes Payable, Current, Total
$ 64,182 
$ 0 
 
 
 
 
CAPITAL LEASES (Details Textual) (USD $)
3 Months Ended 6 Months Ended
Sep. 30, 2015
Sep. 30, 2015
Sep. 30, 2014
Mar. 31, 2015
Sale Leaseback Transaction, Gross Proceeds, Investing Activities
$ 200,000 
 
 
 
Reclassification of Debt to Capital Lease
200,000 
200,000 
0 
 
Capital Lease Obligations, Current
$ 167,614 
$ 167,614 
 
$ 0 
CAPITAL STOCK (Details Textual) (USD $)
3 Months Ended 6 Months Ended 3 Months Ended
Sep. 30, 2015
Sep. 30, 2015
Sep. 30, 2014
Mar. 31, 2015
May 7, 2012
Dec. 31, 2015
Scenario, Forecast [Member]
Sep. 30, 2015
Restricted Stock [Member]
CAPITAL STOCK
 
 
 
 
 
 
 
Common stock, shares authorized
75,000,000 
75,000,000 
 
75,000,000 
 
 
 
Common stock, par value (in dollars per share)
$ 0.001 
$ 0.001 
 
$ 0.001 
 
 
 
Common stock, issued (in shares)
63,844,291 
63,844,291 
 
56,531,499 
 
 
 
Warrants outstanding
988,045 
988,045 
 
 
 
 
 
Class of Warrant or Right, Exercise Price of Warrants or Rights
$ 1.15 
$ 1.15 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares
 
 
 
 
 
 
2,085,000 
Class Of Warrant Or Right Expired
 
4,578,750 
 
 
 
312,500 
 
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized
5,220,000 
5,220,000 
 
 
5,000,000 
 
 
Sale of Stock, Price Per Share
$ 0.30 
$ 0.30 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period
5,216,667 
 
 
 
 
 
 
Proceeds from Issuance of Common Stock
$ 1,565,000 
$ 1,565,000 
$ 570,500 
 
 
 
 
SHARE-BASED COMPENSATION (Details) (Restricted Stock [Member])
6 Months Ended
Sep. 30, 2015
Restricted Stock [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Options outstanding at beginning of period (in shares)
0 
Granted (in shares)
2,085,000 
Vested (in shares)
0 
Expired/cancelled (in shares)
0 
Options outstanding at the end of the period (in shares)
2,085,000 
SHARE-BASED COMPENSATION (Details 1) (Employee Stock Option [Member], USD $)
3 Months Ended 6 Months Ended
Mar. 31, 2015
Sep. 30, 2015
Employee Stock Option [Member]
 
 
Shares
 
 
Options outstanding at beginning of period (in shares)
 
232,500 
Granted (in shares)
 
685,000 
Exercised (in shares)
 
(11,125)
Expired/Cancelled (in shares)
 
(212,000)
Options outstanding at the end of the period (in shares)
232,500 
694,375 
Exercisable at the end of the period (in shares)
 
12,000 
Weighted Average Exercise Price
 
 
Options outstanding at the beginning of the period (in dollars per share)
 
$ 0.35 
Granted (in dollars per share)
 
$ 1.03 
Exercised (in dollars per share)
 
$ 0.51 
Expired/cancelled (in dollars per share)
 
$ 0.83 
Options outstanding at the end of the period (in dollars per share)
$ 0.35 
$ 0.87 
Exercisable at the end of the period (in dollars per share)
 
$ 0.33 
Weighted-Average Remaining Contractual Term
 
 
Options outstanding (in years)
1 year 5 months 12 days 
7 years 7 months 17 days 
Granted (in years)
 
9 years 7 months 10 days 
Exercisable at June 30, 2015 (in years)
 
11 months 26 days 
SHARE-BASED COMPENSATION (Details 2) (Employee Stock Option [Member], USD $)
6 Months Ended
Sep. 30, 2015
Employee Stock Option [Member]
 
Shares
 
Non-vested at the beginning of the period (in shares)
209,375 
Granted (in shares)
685,000 
Vested (in shares)
0 
Expired/cancelled: non-vested (in shares)
(212,000)
Non-vested at the end of the period (in shares)
682,375 
Weighted Average Grant-Date Fair Value
 
Non-vested at the beginning of the period (in dollars per share)
$ 0.21 
Granted (in dollars per share)
$ 0.98 
Vested (in dollars per share)
$ 0 
Expired/cancelled: non-vested (in dollars per share)
$ 0.76 
Non-vested at the end of the period (in dollars per share)
$ 0.81 
SHARE-BASED COMPENSATION (Details 3) (USD $)
6 Months Ended
Sep. 30, 2015
Options Outstanding
 
Number Outstanding
694,375 
Weighted Average Remaining Contractual Life (years)
7 years 7 months 17 days 
Weighted Average Exercise Price (in dollars per share)
$ 0.87 
Options Exercisable
 
Number of Shares
12,000 
Weighted Average Exercise Price (in dollars per share)
$ 0.33 
Exercise Price Range One [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Exercise Price
$ 1.03 
Options Outstanding
 
Number Outstanding
535,000 
Weighted Average Remaining Contractual Life (years)
9 years 7 months 10 days 
Weighted Average Exercise Price (in dollars per share)
$ 1.03 
Options Exercisable
 
Number of Shares
0 
Weighted Average Exercise Price (in dollars per share)
$ 0 
Exercise Price Range Two [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Exercise Price
$ 0.33 
Options Outstanding
 
Number Outstanding
159,375 
Weighted Average Remaining Contractual Life (years)
11 months 26 days 
Weighted Average Exercise Price (in dollars per share)
$ 0.33 
Options Exercisable
 
Number of Shares
12,000 
Weighted Average Exercise Price (in dollars per share)
$ 0.33 
SHARE-BASED COMPENSATION (Details Textual) (USD $)
6 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 1 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended
Sep. 30, 2015
May 7, 2012
Aug. 14, 2015
Restricted Stock [Member]
May 7, 2015
Restricted Stock [Member]
Sep. 30, 2015
Restricted Stock [Member]
Sep. 30, 2015
Restricted Stock [Member]
Jul. 31, 2015
Renaissance Diamond Inc [Member]
May 7, 2015
Renaissance Diamond Inc [Member]
Common Stock [Member]
May 7, 2015
Renaissance Diamond Inc [Member]
Restricted Stock [Member]
Aug. 14, 2015
Mr. Gerald McGuire [Member]
Restricted Stock [Member]
May 7, 2015
Mr. Gerald McGuire [Member]
Restricted Stock [Member]
Aug. 14, 2015
Mr. Jonathan Pfohl [Member]
Restricted Stock [Member]
May 7, 2015
Mr. Jonathan Pfohl [Member]
Restricted Stock [Member]
May 7, 2015
Non Executive Employees [Member]
Sep. 30, 2015
Non Executive Employees [Member]
Sep. 30, 2015
Non Executive Employees [Member]
Number of shares of common stock authorized under the 2012 Share Incentive Plan
5,220,000 
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation cost related to nonvested awards
$ 502,791 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average period to recognize unrecognized compensation expense related to nonvested awards
1 year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross
 
 
 
 
 
2,085,000 
550,000 
 
200,000 
400,000 
400,000 
150,000 
385,000 
685,000 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value
 
 
 
$ 1.03 
 
 
 
 
 
 
 
 
 
$ 0.98 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost, Total
 
 
 
 
90,547 
133,102 
 
 
 
 
 
 
 
 
32,919 
54,865 
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted
 
 
 
 
 
 
 
333,333 
 
 
 
 
 
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award Vesting Period Description
 
 
 
 
 
 
 
 
 
 
 
 
 
The vesting schedule for these options call for 33.3% to vest upon the first, second and third anniversaries of the grant date. 
 
 
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price
 
 
$ 0.85 
 
 
 
 
 
 
 
 
 
 
$ 1.03 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
0.00% 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
2.18% 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
124.30% 
 
 
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Expected Forfeiture Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
25.00% 
 
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total
$ 30,949 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RELATED PARTIES (Details Textual) (USD $)
0 Months Ended 3 Months Ended 6 Months Ended
Aug. 7, 2015
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Mar. 31, 2015
Related Party Transaction [Line Items]
 
 
 
 
 
 
Restructuring Reserve, Settled without Cash
$ 137,561 
$ 137,561 
$ 0 
$ 137,561 
$ 0 
 
Sales Revenue, Goods, Net
 
236,292 
103,976 
408,467 
183,314 
 
Deferred Revenue, Current
 
215,480 
 
215,480 
 
215,375 
Deferred Costs, Current
 
178,066 
 
178,066 
 
179,969 
Stock Issued During Period, Value, Restricted Stock Award, Gross
 
 
 
0 
 
 
RCDC Joint Venture [Member]
 
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
 
Sales Revenue, Goods, Net
 
27,200 
 
184,000 
 
 
Deferred Revenue, Revenue Recognized
 
60,645 
 
183,895 
 
 
Deferred Revenue, Current
 
215,480 
 
215,480 
 
 
Deferred Costs, Current
 
178,066 
 
178,066 
 
 
Receivables, Long-term Contracts or Programs
 
215,613 
 
215,613 
 
 
Stock Issued During Period, Value, Restricted Stock Award, Gross
 
 
 
$ 750,000 
 
 
INVESTMENT IN RCDC JOINT VENTURE (Details) (USD $)
3 Months Ended 6 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Schedule of Equity Method Investments [Line Items]
 
 
 
 
Balance of ownership interest in joint venture at March 31,2015
 
 
$ 30,041 
 
Aggregate fiscal 2016 equity gain - share of joint venture income
18,363 
0 
34,702 
0 
Balance of ownership interest in joint venture at September 30, 2015
64,743 
 
64,743 
 
Cumulative recognized income on ownership interest in joint venture at September 30, 2015
$ 63,743 
 
$ 63,743 
 
INVESTMENT IN RCDC JOINT VENTURE (Details 1) (USD $)
6 Months Ended
Sep. 30, 2015
Schedule of Equity Method Investments [Line Items]
 
Revenues
$ 382,261 
Expenses
312,859 
Net Income
69,402 
Total Assets
680,755 
Total Liabilities
551,270 
Total Partners Capital
129,485 
Total Liabilities and Partner Capital
$ 680,755 
INVESTMENT IN RCDC JOINT VENTURE (Details Textual) (USD $)
3 Months Ended 6 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Mar. 31, 2015
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
Equity Method Investment, Aggregate Cost
$ 64,743 
 
$ 64,743 
 
$ 30,041 
Equity Method Investment, Summarized Financial Information, Revenue
 
 
382,261 
 
 
Equity Method Investment Related Expenses
 
 
312,859 
 
 
Sales Revenue, Goods, Net
236,292 
103,976 
408,467 
183,314 
 
Income (Loss) from Equity Method Investments
18,363 
0 
34,702 
0 
 
Renaissance Created Diamond Company LLC [Member]
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
Equity Method Investment, Aggregate Cost
1,000 
 
1,000 
 
 
Equity Method Investment, Ownership Percentage
50.00% 
 
50.00% 
 
 
Equity Method Investment, Amount Sold
27,200 
 
184,000 
 
 
Equity Method Investment, Summarized Financial Information, Revenue
 
 
215,480 
 
 
Equity Method Investment Related Expenses
 
 
178,066 
 
 
Sales Revenue, Goods, Net
60,645 
 
183,895 
 
 
Income (Loss) from Equity Method Investments
$ 18,363