GREENVILLE, SC, June 29, 2015 – Scio Diamond Technology Corporation (OTCBB: SCIO), which produces lab-grown diamonds, today said it has completed its first year under the direction of a new board of directors and new chief executive officer.  As the company announced its results for fiscal 2015, which ended March 31, 2015, it highlighted noteworthy progress in business development, sales, manufacturing, productivity and finance.

“During the past twelve months, Scio Diamond developed a new business plan and product strategies that have been validated through early product sales. The company also established a new retail sales channel, doubled its manufacturing capacity and made significant strides in the size and quality of diamonds it grows,” explained Gerald McGuire, CEO.

Highlights of the year include:

• June 2014: named new board of directors
• July: hired new CEO
• October: established Renaissance Created Diamonds, a joint venture with Renaissance Diamonds, focused on retail sales channel development
• December: secured $2.5 million in growth funding to double manufacturing capacity
• December: closed on $2 million in equity financing, a direct private placement of common shares to accredited investors that began in July 2014
• December: reduced borrowing costs by more than 10 percent by refinancing $1.5 million in debt
• February 2015: began delivering diamonds through new retail supply chain
• May: doubled production capacity through manufacturing expansion
• June: introduced first retail sales program, with Helzberg Diamonds, the fourth largest jewelry retailer in the US

During FY 2015, Scio Diamond, through Renaissance Created Diamonds, its joint venture, established an entirely new retail supply chain for its lab-grown diamonds, beginning by perfecting diamond chemistry and growing larger and higher quality stones, to selecting partners to cut, polish and finish the stones, and selling the finished stones to retailers and designers for use in finished jewelry.

“Setting up an end-to-end retail supply chain from manufacturing to consumer purchase, with multiple steps and partners, can take companies years to accomplish,” noted McGuire. “Scio Diamond’s ability to accomplish it in less than twelve months is a tribute to the strong leadership and dedicated focus of our board, employees and valued partners.  We demonstrated the value of the product by achieving target average selling prices and model margins, albeit on a small scale.  We have more work to do to increase revenues and grow the business.”

Year-over-year comparisons for the months of March 2015 and March 2014 include a 71 percent increase in the total number of carats produced and a 150 percent increase in total cored carats, which is the amount of diamond prepared for final polishing. During the year, the average crystal size more than doubled and production hours increased by 26 percent.

In addition, jewelers have been enthusiastic about the quality of the Scio Diamond stones, with several jewelers placing orders in addition to Helzberg Diamonds.

“The quality of the materials I use to create my jewelry designs is of paramount importance,” said Greenville-based jewelry designer llyn strong of llyn strong Fine Art Jewelry.  “Scio Diamond’s fancy color stones meet my high standards and make my pieces very sought-after by my customers.”

“Scio Diamond invested heavily in its future in fiscal year 2015. Because of those decisions, we believe the company is well-positioned to manufacture and sell more high-quality diamonds in the future,” said McGuire.

“We knew this would be a challenging year, but we’ve met all of our milestones with one exception. We had planned on revenue from our retail channel development efforts to start materializing sooner than it did.  Our customers needed more time to develop their own plans to market lab-grown diamonds. While we have started building a customer and revenue base, we have a ways to go and need to stay focused to build revenue momentum,” McGuire continued.

Fiscal Year Results

Total revenue in FY 2015 was $726,193, versus $1,418,341 in FY 2014. Scio Diamond generated product revenue of $351,193 in FY 2015, versus $793,341 in FY 2014.  During FY 2015, Scio deferred recognizing $215,375 in revenue related to shipments to its joint venture while no revenues were deferred in FY 2014.  Licensing revenues in FY 2015 were $375,000 versus $625,000 during FY 2014.

Cost of goods sold decreased by 35.5%, from $2,321,534 in FY 2014 to $1,497,465 in FY 2015. The decrease was primarily due to cost efficiencies and the deferral of $179,969 in costs related to deferred revenues from sales to the joint venture while no costs were deferred in FY 2014.

Combined operating expenses, consisting of professional and consulting, salaries and benefits, rent and facilities, marketing, and general and administrative expenses, decreased by 24.8%, from $2,575,287 in FY 2014 to $1,937,668 in FY 2015.  The decrease was primarily due to reduced professional and consulting fees.

Depreciation and amortization expenses were $798,477 in FY 2015, compared to $799,928 in FY 2014.

FY 2015 included net one-time non-cash expenses of $435,221 for forgiveness of legal accounts payable and losses on impairment of in-process research and development projects and the disposal of equipment.  There were $511,106 in one-time non-cash expenses for the loss on the impairment and disposal of fixed assets during FY 2014.

Losses from operations for FY 2015 were $(3,942,638), an improvement of $846,876 compared to a loss of $(4,789,514) in FY 2014.

Cash and cash equivalents were $767,214 as of March 31, 2015 versus $47,987 as of March 31, 2014. This increase in cash was due to the company’s successful debt refinancing that provided for increased borrowing and lower interest rates and the completion of a recent equity offering during the fiscal year.

Scio Diamond has been a technology pioneer in lab-grown diamonds, with its patented chemical vapor deposition (CVD) process. Lab-grown diamonds and mined diamonds are chemically, physically and optically identical. The only difference is that lab-grown diamonds are created in weeks in a precisely controlled laboratory environment rather than deep in the earth for centuries.

About Scio Diamond

Scio Diamond creates high-quality, Type IIa single-crystal diamonds in a controlled laboratory setting. The company produces colorless, near colorless and fancy color lab-grown diamonds in size, color and quality combinations that are rare in earth-mined diamonds. Scio Diamond delivers gems for jewelry and diamond materials for advanced industrial applications. www.ScioDiamond.com

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Scio to be materially different from those expressed or implied. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “could,” “would,” “forecast,” “potential,” “continue,” “contemplate,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason.

SCIO DIAMOND TECHNOLOGY CORPORATION

BALANCE SHEETS

As of March 31, 2015 and 2014

SCIO DIAMOND TECHNOLOGY CORPORATION

STATEMENTS OF OPERATIONS
For the years ended March 31, 2015 and 2014

SCIO DIAMOND TECHNOLOGY CORPORATION

STATEMENTS OF CASH FLOW
For the years ended March 31, 2015 and 2014