Scio Diamond Technology Inactive 10-Q14 Feb 142014 Q3 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
Document and Entity Information	Dec. 31, 2013	Feb. 11, 2014
Document and Entity Information	'	'
Entity Registrant Name	'Scio Diamond Technology Corp	'
Entity Central Index Key	'0001488934	'
Document Type	'10-Q	'
Document Period End Date	31-Dec-13	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--03-31	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	50,264,312
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q3	'

CONDENSED_BALANCE_SHEETS

CONDENSED BALANCE SHEETS (USD $)	Dec. 31, 2013	Mar. 31, 2013
Current Assets:	'	'
Cash and cash equivalents	$159,011	$223,257
Accounts receivable, net	32,583	69,042
Inventory, net	387,734	538,948
Prepaid expenses	147,232	34,455
Prepaid rent	23,050	23,050
Total current assets	749,610	888,752
Property, plant and equipment	'	'
Facility	897,596	883,246
Manufacturing equipment	3,828,273	3,813,865
Other equipment	71,059	69,331
Total property, plant and equipment	4,796,928	4,766,442
Less accumulated depreciation	-1,024,539	-493,533
Net property, plant and equipment	3,772,389	4,272,909
Intangible assets, net	9,434,393	10,015,651
Prepaid rent, noncurrent	48,050	65,338
Other assets	'	13,800
TOTAL ASSETS	14,004,442	15,256,450
Current Liabilities:	'	'
Accounts payable	678,468	285,651
Customer deposits	127,222	'
Accrued expenses	681,736	730,698
Deferred revenue	125,000	'
Notes payable	1,304,746	'
Total current liabilities	2,917,172	1,016,349
Other liabilities	75,656	50,195
TOTAL LIABILITIES	2,992,828	1,066,544
Common stock $0.001 par value, 75,000,000 shares authorized; 50,264,312 and 47,736,812 shares issued and outstanding at December 31, 2013 and March 31, 2013, respectively	50,264	47,737
Additional paid-in capital	24,358,665	23,789,478
Accumulated deficit	-13,396,315	-9,646,309
Treasury stock, 1,000,000 shares at December 31, 2013 and March 31, 2013	-1,000	-1,000
Total shareholders' equity	11,011,614	14,189,906
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$14,004,442	$15,256,450

CONDENSED_BALANCE_SHEETS_Paren

CONDENSED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2013	Mar. 31, 2013
CONDENSED BALANCE SHEETS	'	'
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	50,264,312	47,736,812
Common stock, shares outstanding	50,264,312	47,736,812
Treasury stock, shares	1,000,000	1,000,000

CONDENSED_STATEMENTS_OF_OPERAT

CONDENSED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
CONDENSED STATEMENTS OF OPERATIONS (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Revenue	'	'	'	'
Product revenue, net	$93,915	$555,772	$589,129	$628,873
Licensing revenue	250,000	'	250,000	'
Revenue, net	343,915	555,772	839,129	628,873
Cost of goods sold	'	'	'	'
Cost of goods sold	513,145	605,754	1,740,932	818,646
Gross margin	-169,230	-49,982	-901,803	-189,773
General, administrative, and pre-operating expenses	'	'	'	'
Professional and consulting fees	104,131	471,088	1,097,030	1,220,301
Salaries and benefits	186,967	884,536	612,405	2,677,190
Rent, equipment lease and facilities expense	37,101	34,585	112,349	264,756
Marketing costs	15,300	9,680	41,716	33,623
Depreciation and amortization	200,018	166,726	599,910	173,200
Corporate general and administrative	96,732	121,355	282,091	260,693
Loss from operations	-809,479	-1,737,952	-3,647,304	-4,819,536
Other income (expense)	'	'	'	'
Interest income (expense)	-55,756	'	-102,702	-1,591
Forgiveness of interest expense	'	14,112	'	14,112
Net loss	($865,235)	($1,723,840)	($3,750,006)	($4,807,015)
Basic:	'	'	'	'
Weighted average number of shares outstanding (in shares)	50,264,312	44,437,064	49,303,267	35,123,493
Loss per share (in dollars per share)	($0.02)	($0.04)	($0.08)	($0.14)
Fully diluted:	'	'	'	'
Weighted average number of shares outstanding (in shares)	50,264,312	44,437,064	49,303,267	35,123,493
Loss per share (in dollars per share)	($0.02)	($0.04)	($0.08)	($0.14)

CONDENSED_STATEMENTS_OF_CASH_F

CONDENSED STATEMENTS OF CASH FLOW (USD $)	9 Months Ended
CONDENSED STATEMENTS OF CASH FLOW (USD $)	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:	'	'
Net loss	($3,750,006)	($4,807,015)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	1,118,114	474,497
Expense for warrants, stock and inventory issued in exchange for services	389,731	5,850
Employee stock based compensation	193,150	1,724,979
Changes in assets and liabilities:	'	'
Decrease/(increase) in accounts receivable	36,459	-47,311
Decrease/(increase) in prepaid expenses and rent	63,211	-36,063
Decrease/(increase) in inventory and other assets	139,918	-147,804
Increase in accounts payable	392,817	84,853
Increase in customer deposits	127,222	54,302
Increase in accrued expenses	15,034	221,724
Increase in deferred revenue	125,000	'
Increase in other liabilities	25,461	30,683
Net cash used in operating activities	-1,123,889	-2,441,305
Cash flows from investing activities:	'	'
Deposits for property, plant and equipment	'	-240,000
Purchase of property, plant and equipment	-30,486	-743,316
Net cash used in investing activities	-30,486	-983,316
Cash flows from financing activities:	'	'
Proceeds from note payable	1,304,746	'
Finance charges paid on note payable	-214,746	'
Proceeds from sale of common stock - net of fees	129	4,044,118
Payments on notes payable	'	-225,000
Net cash provided by financing activities	1,090,129	3,819,118
Change in cash and cash equivalents	-64,246	394,497
Cash and cash equivalents, beginning of period	223,257	808,516
Cash and cash equivalents, end of period	159,011	1,203,013
Cash paid for:	'	'
Interest	18,874	'
Non-cash investing and financing activities:	'	'
Purchase of assets funded by note payable	'	100,000
Warrants issued for real property lease	'	39,000
Purchase of assets funded through ADGC subscription rights	'	$790,000

CONDENSED_STATEMENT_OF_SHAREHO

CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (USD $)	Total	Common Stock	Additional Paid in Capital	Treasury Stock	Accumulated Deficit
Balance at Mar. 31, 2013	$14,189,906	$47,737	$23,789,478	($1,000)	($9,646,309)
Balance (in shares) at Mar. 31, 2013	47,736,812	47,736,812	'	-1,000,000	'
Increase (Decrease) in Stockholders' Equity	'	'	'	'	'
Common stock issued in exchange for consulting services	200,450	527	199,923	'	'
Common stock issued in exchange for consulting services (in shares)	'	527,500	'	'	'
Common Stock issued in exchange for past legal services	164,000	1,000	163,000	'	'
Common Stock issued in exchange for past legal services (in shares)	'	1,000,000	'	'	'
Administrative fee received for previous stock issuance	129	'	129	'	'
Common stock issued for indemnification of legal settlement	'	1,000	-1,000	'	'
Common stock issued for indemnification of legal settlement (in shares)	'	1,000,000	'	'	'
Employee stock based compensation	193,150	'	193,150	'	'
Warrants issued in exchange for consulting services	13,985	'	13,985	'	'
Net loss for the period	-3,750,006	'	'	'	-3,750,006
Balance at Dec. 31, 2013	$11,011,614	$50,264	$24,358,665	($1,000)	($13,396,315)
Balance (in shares) at Dec. 31, 2013	50,264,312	50,264,312	'	-1,000,000	'

ORGANIZATION_AND_SUMMARY_OF_SI

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Dec. 31, 2013
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 original business plan of the Company was focused on offsetting carbon dioxide emissions through the creation and protection of forest-based carbon “sinks.” The Company has since abandoned its original business plan and restructured its business to focus on man-made diamond technology development and commercialization.

	Prior to October 1, 2012, the Company was a development stage company. Developmental activities have ceased and planned principal operations have commenced.

	Going Concern

	The Company has generated very 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:

	· On-going solicitation of investment in the Company in the form of private placements of common shares, secured and unsecured debt to accredited investors;
	· Focused efforts on new business development opportunities to generate incremental revenues and diversify our customer base; and
	· Continued to explore strategic joint ventures, technology licensing agreements and dedicated contract manufacturing to expand company revenue and cash flow, including our recently agreed to joint venture in China.

	In the opinion of management, these actions should be 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. 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 December 31, 2013 and March 31, 2013 and the results of operations and cash flows for the three and nine month interim periods ended December 31, 2013 and 2012. 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, 2013 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, 2013.

	On September 16, 2013, the Company entered into a series of agreements with SAAMABA, LLC (“SAAMABA”) and S21 Research Holdings (the “Grace Rich Agreements”) to form a joint venture with operations in the People’s Republic of China (“PRC”) to deploy a minimum of 100 Scio designed diamond growing machines. Through the Grace Rich Agreements, Scio owns 30% of Grace Rich LTD, a corporation duly established pursuant to the laws of the Hong Kong Special Administrative Region of the PRC, that is an investment and holding company for the factory and distribution center to be formed pursuant to the laws of the PRC as a wholly foreign owned enterprise. The Company has determined that it is not required to consolidate the 30% ownership in Grace Rich LTD and therefore accounts for the joint venture under the equity method of accounting (See Note 8 in the notes to condensed financial statements).

	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 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 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:

			December 31,
			2013		2012
	Common stock options and warrants		9,959,295		10,428,764

	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 December 31, 2013 or March 31, 2013.

	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:

			December 31,			March 31,
			2013			2013
	Raw materials and supplies		$	129,925		$	64,255
	Work in process		23,116			—
	Finished goods		314,138			474,693
			467,179			538,948
	Inventory reserves		(79,445		)	—
			$	387,734		$	538,948

	During the nine months ended December 31, 2013, we established a lower cost of market reserve for inventory of $79,445 due to expected selling prices being lower than cost. The estimation of the total write-down involves management judgments and assumptions including assumptions regarding future selling price forecasts, the estimated costs to complete and disposal costs.

	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		3–15
Furniture and fixtures		3–10
Engineering equipment		5–12

Leasehold improvements 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. Manufacturing equipment was placed into service beginning July 1, 2012.

Intangible Assets

Intangible assets, such as 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 nine months ended December 31, 2013 or 2012.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by the accounting literature contains three levels as follows:

Level 1— Quoted prices in active markets for identical assets or liabilities.

Level 2— Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

In addition, GAAP requires the Company to disclose the fair value for financial assets on both a recurring and non-recurring basis. During September 2012, the Company issued to certain current and former stockholders of Apollo Diamond Gemstone Corporation (“ADGC”) that were at the time accredited investors subscription rights valued at $770,000 for the purchase of ADGC assets disclosed in Note 2 measured at fair value on a nonrecurring basis. The fair value of the ADGC subscription rights was determined using the Black-Scholes model whose assumptions were considered by management to be a Level 3 input.

As of December 31, 2013, the Company had 425,545 warrants outstanding with exercise prices of $0.70 per share. The warrants expire in 2016 and 2017. The warrants were issued by the Company as compensation for consulting work, placement agent services, and in exchange for cash discounts on facility rent, and were valued at $0.52 per warrant using the Black-Scholes model. The Company also has 200,000 warrants outstanding with exercise prices of $1.60 per share. These warrants expire in 2018 and were issued by the Company as compensation to a Board member and an unaffiliated third party for efforts related to the Company’s largest customer and were valued at $0.57 per warrant using the Black-Scholes option pricing model. In addition, on November 1, 2013 the Company issued 50,000 warrants with an exercise price of $0.37 per share to a company vendor in exchange for consulting services. These warrants expire in 2018 and were valued at $0.28 per warrant using the Black-Scholes option pricing model.

The carrying value of cash and cash equivalents including restricted cash, accounts receivable, other assets and trade accounts payable approximates fair value due to the short-term nature of these instruments.

Revenue Recognition

We recognize 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. The Company also maintains a provision for estimating returns and allowances based upon historical experience.

Recent Accounting Pronouncements

There are currently no 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.

ASSET_PURCHASES

ASSET PURCHASES	9 Months Ended
	Dec. 31, 2013
ASSET PURCHASES	'
ASSET PURCHASES	'
	NOTE 2 — ASSET PURCHASES

	On June 5, 2012, the Company acquired certain of the assets of ADGC (the “ADGC Asset Purchase”), consisting primarily of lab-created diamond gemstone-related know-how, inventory, and various intellectual property, in exchange for $100,000 in cash and the right for certain current and former stockholders of ADGC qualifying as accredited investors to acquire up to approximately 1 million shares of common stock of the Company for $0.01 per share (the “ADGC Offering”). The Company paid the $100,000 cash portion of the ADGC Asset Purchase during the month of December 2012. The ADGC Offering began in June 2012 and was completed in March 2013. The Company obtained a third-party valuation to support the fair value of the assets acquired. This valuation determined a value of $770,000 for the subscription rights. The amounts allocated to the ADGC assets acquired are based upon the results of that valuation appraisal and the following table reflects our final purchase price allocation of the assets:

	Inventory	$	269,000
	In-process research and development	601,000
	Total	$	870,000

	The ADGC Offering was completed in March 2013 and resulted in the issuance of an aggregate of 988,380 shares of the Company’s common stock.

INTANGIBLE_ASSETS

INTANGIBLE ASSETS	9 Months Ended
INTANGIBLE ASSETS	Dec. 31, 2013
INTANGIBLE ASSETS	'
INTANGIBLE ASSETS	'
	NOTE 3 — INTANGIBLE ASSETS

	During the nine months ended December 31, 2013, the Company evaluated its patent portfolio and allocated $601,000 of the previously acquired in-process research and development from the ADGC Asset Purchase to specific patents related to the gemstone market that are being used by the Company for its commercial operations. These patents were considered placed in service by the Company during the quarter ended June 30, 2013 and the values assigned are being amortized on a straight-line basis over the remaining effective lives of the patents.

	Intangible assets consist of the following:

				December 31,		March 31,
		Life		2013		2013
	Patents, gross	6.75 – 19.46		$	8,135,063	$	7,534,063
	In-process research and development	Indefinite		2,250,435		2,851,435
				10,385,498		10,385,498
	Accumulated amortization			951,105		369,847
	Net intangible assets			$	9,434,393	$	10,015,651

	Total amortization expense for the three and nine months ending December 31, 2013 was $193,753 and $581,258, respectively. Amortization expense for the three and nine months ended December 31, 2012 was $156,106.

	Total annual amortization expense of finite lived intangible assets is estimated to be as follows:

	Fiscal Year Ending
	Three months ending March 31, 2014	$	193,753
	March 31, 2015	775,011
	March 31, 2016	775,011
	March 31, 2017	775,011
	March 31, 2018	775,011
	Thereafter	$	3,890,161

NOTES_PAYABLE

NOTES PAYABLE	9 Months Ended
NOTES PAYABLE	Dec. 31, 2013
NOTES PAYABLE	'
NOTES PAYABLE	'
	NOTE 4 — NOTES PAYABLE

	On June 21, 2013, the Company entered into a loan agreement (the “Original Loan Agreement”) with Platinum Capital Partners, LP (“Platinum”) providing for a $1 million secured revolving line of credit that the Company may draw on to fund working capital and other corporate purposes. Borrowings under the loan agreement accrue interest at the rate of 18% per annum, payable monthly on or before the last calendar day of each month, and a service charge of 3% applies to late payments. The Original Loan Agreement also provides for payment of an accommodation fee of up to 10% of the commitment amount as provided in the loan agreement, and payment of a monthly collateral monitoring fee of $2,000 per month for the first six months and $1,000 per month for the last six months of the term of the loan agreement. The credit facility matures on June 20, 2014. The Original 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 shareholders and sell, purchase or lease real or personal property or other assets or equipment. The Original Loan Agreement also contains affirmative covenants and events of default. The Company may prepay borrowings without premium or penalty upon notice to Platinum as provided in the Original Loan Agreement. Under a security agreement entered into in connection with the loan agreement, the Company granted Platinum a first priority security interest in the Company’s inventory, equipment, accounts and other rights to payments and intangibles as security for the loan.

	On October 11, 2013, the Company entered into a First Amendment to Loan Agreement (the “First Amendment”), dated October 11, 2013, with Platinum, which amends the Original Loan Agreement (as amended by the First Amendment, the “Amended Loan Agreement”) to provide for an additional $500,000 of borrowing capacity (the “Additional Loan” and, together with the original Loan, the “Loan”) under the existing $1 million secured revolving line of credit established under the Original Loan Agreement. The Company may draw on the line to fund working capital. The Additional Loan, which is represented by a Promissory Note dated October 11, 2013 (the “New Note”), matures on June 20, 2014. On October 11, 2013, $280,750 was drawn on the Additional Loan, $30,750 of which was retained by Platinum to cover applicable fees.

	Borrowings accrue interest at the rate of 18% per annum, payable monthly on or before the last calendar day of each month, and a service charge of 3% applies to late payments. An interest reserve of $133,500 has been set aside from the proceeds of the New Note to make required payments of interest, provided that interest billed to the Company will first be deducted from a $90,000 reserve established under the Original Note for payments of interest on the Original Note, until that reserve has been exhausted. The Amended Loan Agreement also provides for payment of an accommodation fee of $25,000 and a closing fee of $3,250, the amounts of which were retained by Platinum out of amounts drawn on the Additional Loan on October 11, 2013. The Company’s obligations under the Amended Loan Agreement are not guaranteed by any other party. The Company may prepay borrowings without premium or penalty upon notice to Platinum as provided in the Amended Loan Agreement. The Loan is secured by a security agreement, under which the Company grants Platinum first priority security interest in the Company’s inventory, equipment, accounts and other rights to payments and intangibles as security for the Loan. The New Note provides for monthly interest payments commencing November 2013 and for repayment of all amounts drawn, together with accrued interest, on June 20, 2014.

	The Company has utilized funds drawn on the Original Loan and the Additional Loan to fund its ongoing operations. At December 31, 2013, the total due Platinum including all accrued fees was $1,304,746 and the Company was compliant with all financial debt convents. At December 31, 2013, $92,101 of remaining availability on the notes is reserved to make certain interest payments on the notes and $85,740 is available for future borrowing.

CAPITAL_STOCK

CAPITAL STOCK	9 Months Ended
CAPITAL STOCK	Dec. 31, 2013
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 nine months ending December 31, 2012, Company issued 4,891,250 units, each consisting of one share of common stock and one warrant for the purchase of a share of common stock at a strike price of $1.60, at a unit price of $0.80 for total net cash proceeds of $3,873,177.

	On June 4, 2013 the Company engaged Arque Capital LTD., Maxwell Simon, Inc., and Stonegate Securities, Inc. to provide consulting services in connection with future capital raising activities. The Company issued 165,000, 162,500 and 200,000 shares of its common stock, respectively to each of Arque Capital LTD., Maxwell Simon, Inc. and Stonegate Securities Inc., respectively as partial compensation for these engagements. The Company recognized $200,450 in expense related to these share issuances.

	On September 25, 2013 the Company issued 1,000,000 shares of its common stock to our attorneys Schwegman, Lundberg & Woessner in exchange for $164,000 of past legal services.

	On November 1, 2013, the Board of Directors authorized the issuance of 50,000 warrants to a company vendor in exchange for consulting services. At issuance these warrants were immediately vested and expire five years from the date of issuance. Each warrant is convertible into Company common stock at $0.37 per share. The Company recognized $13,985 in expense from the issuance of these warrants. The Company valued these warrants at $0.28 using the Black-Scholes option pricing model with the following assumptions: Expected dividend yield, 0.00%; Risk-free interest rate, 1.37%; Expected life in years, 5; Expected volatility, 102.3%.

	The Company had 50,264,312 shares of common stock issued and outstanding as of December 31, 2013 of which 1,000,000 were held in treasury.

	The Company had 5,566,795 warrants outstanding with a weighted average exercise price of $1.52 per share as of December 31, 2013.

SHAREBASED_COMPENSATION

SHARE-BASED COMPENSATION	9 Months Ended
	Dec. 31, 2013
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 share 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. As of December 31, 2013, 607,500 shares remained available for issuance under the Plan.

	Prior to December 2012, the Company’s practice was to issue options with exercise prices of $0.70 or $0.80 per share, which were the prices of recent equity capital investment. However, in December 2012, the Company decided to change the exercise price policy by utilizing the stock market closing price on the day that the options were granted by our Board of Directors. All subsequent exercise prices have been determined in this manner.

	On October 1, 2013, the Company’s Board of Directors approved the issuance of options to purchase 68,750 shares of common stock to each of Messrs. Adams, Linares, and Strous for their services to date through calendar 2013. Each grant is in accordance with the Company’s director compensation program that provides for the grant of options to purchase 6,250 shares of common stock to each director for each Board meeting held. All 206,250 options issued have an exercise price of $0.42 that reflects the Company’s closing stock price on the date of grant. Using the Black-Scholes option pricing model, management has determined the options issued on October 1, 2013 had a value of $0.26 per option on the date of grant. The Black-Scholes model assumptions used were: Expected dividend yield, 0.00%; Risk-free interest rate, 0.66%; Expected life in years, 3.0; Expected volatility, 102.3%. Total compensation costs of $54,429 have been recognized for these options as of December 31, 2013.

	The following sets forth the options to purchase shares of the Company’s stock issued and outstanding as of December 31, 2013:

	Options	Shares		Weighted-		Weighted-Average
				Average Exercise		Remaining
				Price		Contractual Term
	Options Outstanding March 31, 2013	4,092,500		$	0.87	2.54
	Granted	706,250		0.36		2.74
	Exercised	—		—		—
	Expired/cancelled	(406,250	)	0.88		—
	Options Outstanding December 31, 2013	4,392,500		$	0.76	2.01
	Exercisable at December 31, 2013	1,961,333		$	0.76	1.89

	The intrinsic value of options outstanding at December 31, 2013 and March 31, 2013 was $0 and $299,900, respectively. The intrinsic value of options exercisable at December 31, 2013 and March 31, 2012 was $0 and $176,109, respectively.

	The Company estimates the fair value of options granted on the grant date utilizing the Black-Scholes Option model. For the three and nine months ended December 31, 2013, the Company recognized $59,741 and $193,150 as compensation expense for options issued. For the three and nine months ended December 31, 2012, the Company recognized $457,230 and $1,724,979 respectively, as compensation expense for options issued. The Company recorded related deferred tax asset of $0 for all periods.

	At December 31, 2013, unrecognized compensation cost related to non-vested awards was $1,129,043. This cost is expected to be recognized over a weighted average period of 2.5 years.

RELATED_PARTY_TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2013
RELATED PARTY TRANSACTIONS	'
RELATED PARTY TRANSACTIONS	'
	NOTE 7 — RELATED PARTY TRANSACTIONS

	The Company incurred expenses of $0 and $19,658 for professional and consulting services provided by Adams Monahan, LLP, a firm in which our board member Edward S. Adams, and former board member Michael R. Monahan, were partners, for the three and nine months ended December 31, 2013. For the three and nine months ended December 31, 2012, the Company incurred expenses for professional and consulting provided by Adams Monahan LLP of $30,410 and $86,433, respectively. The Company and Adams Monahan, LLP amicably terminated their professional relationship on June 30, 2013.

	On June 5, 2012, the Company acquired substantially all of the assets of ADGC, consisting primarily of lab-grown diamond gemstone-related know-how, inventory, and various intellectual property, in exchange for $100,000 in cash and the opportunity for certain current and former stockholders of ADGC that are accredited investors to acquire up to approximately 1 million shares of common stock of the Company for $0.01 per share. These rights were valued at $770,000 based on an external appraisal. Mr. Adams and Mr. Monahan served in various capacities with ADGC through early 2011.

	On March 6, 2013, the Board of Directors retained Mr. Michael Monahan, who at the time was a member of the Company’s Board, and Mr. Theo Strous, a current director, to provide consulting services for the Company at a total cost of $11,000 and $4,000 respectively, per month. These consulting service agreements with both Messrs. Monahan and Strous were terminated effective June 30, 2013. The Company recognized $45,000 in consulting expense for these services during the nine months ended December 31, 2013.

	On May 14, 2013 the Board of Directors created a special committee consisting of Mr. Theo Strous to evaluate a report to the Board of Directors by former counsel to the Company and certain actions of a former member of the Board of Directors and former Company officers. The report was completed at the end of June 2013. The Board of Directors approved the payment of $25,000 to Mr. Strous as compensation for his service on the special committee.

	On March 25, 2013, the Board of Directors agreed to indemnify Messrs. Adams and Monahan for expenses incurred and common stock they provided to settle litigation in May 2012. On May 21, 2013, the Company deemed issued the 1,000,000 shares previously allocated for indemnification of Messrs. Adams and Monahan and on July 2, 2013, the Company entered into an agreement with Mr. Adams to pay out remaining indemnification related liabilities of $117,306 at $7,500 per month through October 2014.

INVESTMENT_IN_JOINT_VENTURE

INVESTMENT IN JOINT VENTURE	9 Months Ended
INVESTMENT IN JOINT VENTURE	Dec. 31, 2013
INVESTMENT IN JOINT VENTURE	'
INVESTMENT IN JOINT VENTURE	'
	NOTE 8 — INVESTMENT IN JOINT VENTURE

	Under the Grace Rich Agreements, the Company has agreed to license its proprietary technology for the manufacture of diamond gemstones of agreed upon specifications. In exchange for the license, the Company will receive licensing revenue and a 30% ownership position in the joint venture. In addition to the licensed technology, the Grace Rich Agreements include obligations for the Company to provide and be compensated for technology consulting services to the joint venture to support the start-up of operations. The capital contributions for Grace Rich LTD are requirements of SAAMABA, and the Company is not required to make any on-going funding contributions to the joint venture and its ownership stake cannot be reduced from 30%.

	The Company is licensing a portion of its patented technology to Grace Rich LTD and is not directly contributing any of its intellectual property. The Company intends to use the relief from royalty method to value the license contributed to the joint venture. The Company expects the value to be immaterial. The Company will finalize its accounting for the joint venture by March 31, 2014.

	The Company recognized $250,000 in revenues from Grace Rich during the three and nine months ended December 31, 2013. The Company incurred $63,334 of joint venture related expenses during the three months ended December 31, 2013 that were reimbursed by the Grace Rich. The reimbursements were offset against the Company’s related operating expense.

LITIGATION

LITIGATION	9 Months Ended
LITIGATION	Dec. 31, 2013
LITIGATION	'
LITIGATION	'
	NOTE 9 — LITIGATION

	On July 26, 2013, Bernard M. McPheely, Trustee for the Bernard M. McPheely Revocable Trust Dated May 25, 2012, Thomas P. Hartness, Trustee for the Thomas P. Hartness Revocable Trust Dated July 31, 2010, Brian McPheely and Robert Daisley (collectively, “Plaintiffs”), derivatively and on behalf of the Company, filed a complaint in the Court of Common Pleas of the State of South Carolina, County of Greenville against Edward S. Adams (our Chairman), Michael R. Monahan (a former member of the Company’s Board of Directors), Robert Linares (a current member of the Board), Theodorus Strous (a current member of the Board) and the law firm of Adams Monahan, LLP (collectively, “Defendants”), and the Company, as a nominal defendant (the “Scio Derivative Complaint”). Bernard M. McPheely is a former member of the Company’s Board of Directors.

	The Scio Derivative Complaint alleges (i) against Defendants, breach of fiduciary duty, corporate waste and unjust enrichment; (ii) against Messrs. Strous and Linares and Adams Monahan LLP, aiding and abetting a breach of fiduciary duty; (iii) against Messrs. Adams and Monahan, civil conspiracy; (iv) against Messrs. Adams, Monahan and Linares, breach of fiduciary duty — controlling shareholder; and (v) against Mr. Strous and Adams Monahan LLP, aiding and abetting a breach of controlling shareholder duty. The allegations relate to, among other things, certain actions allegedly taken by defendants in connection with: the acquisition by the Company of certain assets of ADI (the “ADI Asset Purchase”); the ADGC Asset Purchase discussed in Note 2 above; the Company’s agreement to provide certain current and former stockholders of ADI and ADGC the opportunity to acquire up to approximately 16 million and 1 million shares, respectively, of common stock of the Company for $0.01 per share (collectively, the “ADI/ADGC Offering”); the provision of legal services by Adams Monahan LLP to the Company; certain equity issuances by the Company following the ADI/ADGC Offering; certain bonuses and other payments paid to members of the Board of Directors; and certain indemnification obligations undertaken by the Company in favor of Messrs. Adams and Monahan.

	Plaintiffs are seeking direct and consequential damages sustained by the Company in an amount to be established through proof at trial, plus pre-judgment and post-judgment interest; appropriate equitable relief to remedy the alleged breaches of fiduciary duties; reasonable attorney’s fees and costs for the Company incurred in prosecuting the action; and other relief as deemed by the court to be just and proper.

	Defendants removed the Scio Derivative Complaint to the U.S. District Court for the District of South Carolina, Greenville Division (the “Federal Court”) and filed a motion to dismiss the complaint on October 4, 2013. On December 16, 2013, the Federal Court granted the Defendants’ motion to dismiss, in part, and ordered that the remainder of the claim be sent to arbitration.

	On October 15, 2013, plaintiff Mark P. Sennott, as Trustee of the Sennott Family Charitable Trust, (“Sennott”) filed a complaint derivatively, on behalf of ADI, in the Federal Court, against Edward S. Adams (our Chairman), Michael R. Monahan (a former member of the Company’s Board of Directors), the law firm of Adams Monahan, LLP, Loblolly, Inc., which was formerly known as Scio Diamond Technology Corporation, and the Company (collectively, “Sennott Defendants”). This derivative complaint on ADI’s behalf (the “ADI Derivative Complaint”) alleges claims for breach of fiduciary duty, constructive fraud and unjust enrichment. The allegations in the ADI Derivative Complaint are duplicative of the Scio Derivative Complaint allegations concerning ADI, which were dismissed by the Federal Court’s December 16, 2013 order in the Scio Derivative Complaint and repeat almost verbatim the allegations from earlier lawsuits filed and dismissed in 2012 against the Defendants, which were previously disclosed in the Company’s Form 10-Q for the nine months ended December 31, 2012 and Form 10-K for fiscal year ended March 31, 2013. Sennott is seeking direct and consequential damages sustained by Sennott in an amount to be established through proof at trial, plus pre-judgment and post-judgment interest; appropriate equitable relief to remedy the allegedly wrongful acts; reasonable attorney’s fees and costs incurred in prosecuting the action; and other relief as deemed by the court to be just and proper. The Sennott Defendants believe the ADI Derivative Complaint has no merit and are vigorously defending it.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2013
SUBSEQUENT EVENTS	'
SUBSEQUENT EVENTS	'
	NOTE 10: SUBSEQUENT EVENTS

	NONE

ORGANIZATION_AND_SUMMARY_OF_SI1

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Dec. 31, 2013
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
Going Concern	'
	Going Concern

	The Company has generated very 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:

	· On-going solicitation of investment in the Company in the form of private placements of common shares, secured and unsecured debt to accredited investors;
	· Focused efforts on new business development opportunities to generate incremental revenues and diversify our customer base; and
	· Continued to explore strategic joint ventures, technology licensing agreements and dedicated contract manufacturing to expand company revenue and cash flow, including our recently agreed to joint venture in China.

	In the opinion of management, these actions should be 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. 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 December 31, 2013 and March 31, 2013 and the results of operations and cash flows for the three and nine month interim periods ended December 31, 2013 and 2012. 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, 2013 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, 2013.

	On September 16, 2013, the Company entered into a series of agreements with SAAMABA, LLC (“SAAMABA”) and S21 Research Holdings (the “Grace Rich Agreements”) to form a joint venture with operations in the People’s Republic of China (“PRC”) to deploy a minimum of 100 Scio designed diamond growing machines. Through the Grace Rich Agreements, Scio owns 30% of Grace Rich LTD, a corporation duly established pursuant to the laws of the Hong Kong Special Administrative Region of the PRC, that is an investment and holding company for the factory and distribution center to be formed pursuant to the laws of the PRC as a wholly foreign owned enterprise. The Company has determined that it is not required to consolidate the 30% ownership in Grace Rich LTD and therefore accounts for the joint venture under the equity method of accounting (See Note 8 in the notes to condensed financial statements).
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 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 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:

		December 31,
		2013		2012
	Common stock options and warrants	9,959,295		10,428,764
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 December 31, 2013 or March 31, 2013.
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:

		December 31,			March 31,
		2013			2013
	Raw materials and supplies	$	129,925		$	64,255
	Work in process	23,116			—
	Finished goods	314,138			474,693
		467,179			538,948
	Inventory reserves	(79,445		)	—
		$	387,734		$	538,948

	During the nine months ended December 31, 2013, we established a lower cost of market reserve for inventory of $79,445 due to expected selling prices being lower than cost. The estimation of the total write-down involves management judgments and assumptions including assumptions regarding future selling price forecasts, the estimated costs to complete and disposal costs.
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	3–15
	Furniture and fixtures	3–10
	Engineering equipment	5–12

	Leasehold improvements 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. Manufacturing equipment was placed into service beginning July 1, 2012.
Intangible Assets	'
	Intangible Assets

	Intangible assets, such as 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 nine months ended December 31, 2013 or 2012.
Fair Value Measurement	'
	Fair Value Measurement

	Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by the accounting literature contains three levels as follows:

	Level 1— Quoted prices in active markets for identical assets or liabilities.

	Level 2— Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

	Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

	In addition, GAAP requires the Company to disclose the fair value for financial assets on both a recurring and non-recurring basis. During September 2012, the Company issued to certain current and former stockholders of Apollo Diamond Gemstone Corporation (“ADGC”) that were at the time accredited investors subscription rights valued at $770,000 for the purchase of ADGC assets disclosed in Note 2 measured at fair value on a nonrecurring basis. The fair value of the ADGC subscription rights was determined using the Black-Scholes model whose assumptions were considered by management to be a Level 3 input.

	As of December 31, 2013, the Company had 425,545 warrants outstanding with exercise prices of $0.70 per share. The warrants expire in 2016 and 2017. The warrants were issued by the Company as compensation for consulting work, placement agent services, and in exchange for cash discounts on facility rent, and were valued at $0.52 per warrant using the Black-Scholes model. The Company also has 200,000 warrants outstanding with exercise prices of $1.60 per share. These warrants expire in 2018 and were issued by the Company as compensation to a Board member and an unaffiliated third party for efforts related to the Company’s largest customer and were valued at $0.57 per warrant using the Black-Scholes option pricing model. In addition, on November 1, 2013 the Company issued 50,000 warrants with an exercise price of $0.37 per share to a company vendor in exchange for consulting services. These warrants expire in 2018 and were valued at $0.28 per warrant using the Black-Scholes option pricing model.

	The carrying value of cash and cash equivalents including restricted cash, accounts receivable, other assets and trade accounts payable approximates fair value due to the short-term nature of these instruments.
Revenue Recognition	'
	Revenue Recognition

	We recognize 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. The Company also maintains a provision for estimating returns and allowances based upon historical experience.
Recent Accounting Pronouncements	'
	Recent Accounting Pronouncements

	There are currently no 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_SI2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Dec. 31, 2013
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
Summary of anti-dilutive securities excluded from the calculation of diluted net loss per share	'


		December 31,
		2013		2012
	Common stock options and warrants	9,959,295		10,428,764
Schedule of components of inventories	'

		December 31,			March 31,
		2013			2013
	Raw materials and supplies	$	129,925		$	64,255
	Work in process	23,116			—
	Finished goods	314,138			474,693
		467,179			538,948
	Inventory reserves	(79,445		)	—
		$	387,734		$	538,948
Schedule of estimated useful lives of property, plant and equipment	'


		Years
	Machinery and equipment	3–15
	Furniture and fixtures	3–10
	Engineering equipment	5–12

ASSET_PURCHASES_Tables

ASSET PURCHASES (Tables) (ADGC Asset Purchase)	9 Months Ended
	Dec. 31, 2013
ADGC Asset Purchase	'
Asset Purchases	'
Schedule of purchase price allocation of the assets	'


	Inventory	$	269,000
	In-process research and development	601,000
	Total	$	870,000

INTANGIBLE_ASSETS_Tables

INTANGIBLE ASSETS (Tables)	9 Months Ended
INTANGIBLE ASSETS (Tables)	Dec. 31, 2013
INTANGIBLE ASSETS	'
Schedule of intangible assets	'


				December 31,		March 31,
		Life		2013		2013
	Patents, gross	6.75 – 19.46		$	8,135,063	$	7,534,063
	In-process research and development	Indefinite		2,250,435		2,851,435
				10,385,498		10,385,498
	Accumulated amortization			951,105		369,847
	Net intangible assets			$	9,434,393	$	10,015,651
Schedule of estimated annual amortization expense of intangible assets	'


	Fiscal Year Ending
	Three months ending March 31, 2014	$	193,753
	March 31, 2015	775,011
	March 31, 2016	775,011
	March 31, 2017	775,011
	March 31, 2018	775,011
	Thereafter	$	3,890,161

SHAREBASED_COMPENSATION_Tables

SHARE-BASED COMPENSATION (Tables)	9 Months Ended
SHARE-BASED COMPENSATION (Tables)	Dec. 31, 2013
SHARE-BASED COMPENSATION	'
Schedule of options to purchase shares of the Company's stock issued and outstanding	'


	Options	Shares		Weighted-		Weighted-Average
				Average Exercise		Remaining
				Price		Contractual Term
	Options Outstanding March 31, 2013	4,092,500		$	0.87	2.54
	Granted	706,250		0.36		2.74
	Exercised	—		—		—
	Expired/cancelled	(406,250	)	0.88		—
	Options Outstanding December 31, 2013	4,392,500		$	0.76	2.01
	Exercisable at December 31, 2013	1,961,333		$	0.76	1.89

ORGANIZATION_AND_SUMMARY_OF_SI3

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)

9 Months Ended

0 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Mar. 31, 2013

Dec. 31, 2013

Sep. 16, 2013

Machinery and equipment

Furniture and fixtures

Engineering equipment

Leasehold improvements

Grace Rich Agreements

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Minimum

item

Property, Plant and Equipment

Estimated useful lives

'3 years

'15 years

'3 years

'10 years

'5 years

'12 years

'3 years

'7 years

Joint Venture

Number of Scio designed diamond growing machines to be deployed

100

Ownership percentage in joint venture

30.00%

Antidilutive securities excluded from the calculation of diluted net loss per share

Common stock options and warrants excluded from the calculation of diluted net loss per share (in shares)

9,959,295

10,428,764

Inventories

Raw materials and supplies

$129,925

$64,255

Work in process

23,116

Finished goods

314,138

474,693

Inventory, gross

467,179

538,948

Inventory reserves

-79,445

Inventory, net

$387,734

$538,948

ORGANIZATION_AND_SUMMARY_OF_SI4

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Intangible Assets	'	'
Impairment charges	$0	$0

ORGANIZATION_AND_SUMMARY_OF_SI5

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $)	9 Months Ended		0 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Nov. 01, 2013	Jun. 05, 2012	Jun. 05, 2012
	Warrants with exercise prices of $.70 per share	Warrants with exercise prices of $1.60	Warrants with exercise prices of $0.37 per share	ADGC	Nonrecurring basis
					Level 3
					ADGC
Fair Value Measurement	'	'	'	'	'
Fair value of subscription rights	'	'	'	$770,000	$770,000
Warrants	'	'	'	'	'
Warrants issued (in shares)	'	'	50,000	'	'
Warrants outstanding	425,545	200,000	'	'	'
Exercise price (in dollars per share)	$0.70	$1.60	$0.37	'	'
Fair value (in dollars per share)	$0.52	$0.57	$0.28	'	'

ASSET_PURCHASES_Details

ASSET PURCHASES (Details) (ADGC Asset Purchase, USD $)	0 Months Ended	9 Months Ended
ASSET PURCHASES (Details) (ADGC Asset Purchase, USD $)	Jun. 05, 2012	Dec. 31, 2013
ADGC Asset Purchase	'	'
Asset Purchases	'	'
Cash portion of purchase price	$100,000	'
Number of shares of common stock issued as consideration for acquisition	1,000,000	988,380
Price per share of common stock issuable as subscription rights (in dollars per share)	$0.01	'
Fair value of subscription rights	770,000	'
Purchase price allocation of the assets	'	'
Inventory	269,000	'
In-process research and development	601,000	'
Total	$870,000	'

INTANGIBLE_ASSETS_Details

INTANGIBLE ASSETS (Details) (USD $)

3 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Mar. 31, 2013

Dec. 31, 2013

Mar. 31, 2013

Dec. 31, 2013

Mar. 31, 2013

Jun. 30, 2013

Dec. 31, 2013

In-process research and development

Patent

ADGC Asset Purchase

Minimum

Maximum

INTANGIBLE ASSETS

Acquired finite lived intangible assets

$8,135,063

$7,534,063

Acquired finite lived intangible assets

601,000

Acquired finite lived intangible assets

2,250,435

2,851,435

Gross intangible assets

10,385,498

Accumulated amortization

951,105

369,847

Net intangible assets

9,434,393

10,015,651

Amortization period

'6 years 9 months

'19 years 5 months 16 days

Amortization expense

$193,753

$156,106

$581,258

$156,106

INTANGIBLE_ASSETS_Details_2

INTANGIBLE ASSETS (Details 2) (USD $)	Dec. 31, 2013
Estimated annual amortization expense of intangible assets	'
Three months ending March 31, 2014	$193,753
2015	775,011
2016	775,011
2017	775,011
2018	775,011
Thereafter	$3,890,161

NOTES_PAYABLE_Details

NOTES PAYABLE (Details) (USD $)	9 Months Ended				0 Months Ended
	Dec. 31, 2013	Oct. 11, 2013	Jun. 21, 2013	Dec. 31, 2013	Oct. 11, 2013	Oct. 11, 2013
	Line of Credit	Line of Credit	Line of Credit	Line of Credit	Amended Loan Agreement	Additional Loan
				Maximum
Notes payable	'	'	'	'	'	'
Maximum borrowing capacity	'	'	$1,000,000	'	'	'
Loan draw	'	'	'	'	'	280,750
Annual interest rate (as a percent)	18.00%	'	'	'	18.00%	'
Service charge on late payment (as a percent)	3.00%	'	'	'	3.00%	'
Accommodation fees (as a percent)	'	'	'	10.00%	'	'
Periodic collateral monitoring fee for the first six months	2,000	'	'	'	'	'
Periodic collateral monitoring fee for the last six months	1,000	'	'	'	'	'
Additional borrowing capacity	'	'	'	'	500,000	'
Applicable fees	'	'	'	'	'	30,750
Interest reserve established	'	90,000	'	'	'	133,500
Accommodation fees	'	'	'	'	25,000	'
Closing fees	'	'	'	'	3,250	'
Outstanding balance	1,304,746	'	'	'	'	'
Remaining balance available	92,101	'	'	'	'	'
Amount available for future borrowing	$85,740	'	'	'	'	'

CAPITAL_STOCK_Details

CAPITAL STOCK (Details) (USD $)	0 Months Ended		9 Months Ended			0 Months Ended				0 Months Ended
	Sep. 25, 2013	Jun. 04, 2013	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2013	Jun. 04, 2013	Jun. 04, 2013	Jun. 04, 2013	Dec. 31, 2013	Nov. 01, 2013
	Sep. 25, 2013	Jun. 04, 2013	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2013	Arque Capital LTD.	Maxwell Simon	Stonegate Securities, Inc.	Warrants with exercise prices of $1.53 per share	Warrants with exercise prices of $0.37 per share
CAPITAL STOCK	'	'	'	'	'	'	'	'	'	'
Common shares, authorized	'	'	75,000,000	'	75,000,000	'	'	'	'	'
Common stock, par value (in dollars per share)	'	'	$0.00	'	$0.00	'	'	'	'	'
Number of units issued (in shares)	'	'	'	4,891,250	'	'	'	'	'	'
Number of shares of common stock in each unit issued	'	'	'	1	'	'	'	'	'	'
Number of warrants in each unit issued	'	'	'	1	'	'	'	'	'	'
Strike price (in dollars per share)	'	'	'	$1.60	'	'	'	'	'	'
Issue price per unit (in dollars per share)	'	'	'	$0.80	'	'	'	'	'	'
Total net cash proceeds from sale of units	'	'	'	$3,873,177	'	'	'	'	'	'
Common stock issued as partial compensation for engagements (in shares)	'	'	'	'	'	165,000	162,500	200,000	'	'
Expense recognized related to share issued for services	'	200,450	'	'	'	'	'	'	'	'
Common Stock issued in exchange for past legal services (in shares)	1,000,000	'	'	'	'	'	'	'	'	'
Common Stock issued in exchange for past legal services	164,000	'	164,000	'	'	'	'	'	'	'
Warrants authorized	'	'	'	'	'	'	'	'	'	50,000
Warrants expiration term	'	'	'	'	'	'	'	'	'	'5 years
Expense from issuance of warrants	'	'	'	'	'	'	'	'	'	$13,985
Fair value (in dollars per share)	'	'	'	'	'	'	'	'	'	$0.28
Assumptions used to calculate fair value of options	'	'	'	'	'	'	'	'	'	'
Expected dividend yield (as a percent)	'	'	'	'	'	'	'	'	'	0.00%
Risk-free interest rate (as a percent)	'	'	'	'	'	'	'	'	'	1.37%
Expected life	'	'	'	'	'	'	'	'	'	'5 years
Expected volatility (as a percent)	'	'	'	'	'	'	'	'	'	102.30%
Common stock, issued (in shares)	'	'	50,264,312	'	47,736,812	'	'	'	'	'
Common stock, outstanding (in shares)	'	'	50,264,312	'	47,736,812	'	'	'	'	'
Shares held in treasury	'	'	1,000,000	'	1,000,000	'	'	'	'	'
Warrants outstanding	'	'	'	'	'	'	'	'	5,566,795	'
Exercise price (in dollars per share)	'	'	'	'	'	'	'	'	$1.52	$0.37

SHAREBASED_COMPENSATION_Detail

SHARE-BASED COMPENSATION (Details) (USD $)

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Mar. 31, 2013

7-May-12

Dec. 31, 2012

Oct. 02, 2013

Dec. 31, 2013

Oct. 02, 2013

Stock options

Board of Directors

Edward S. Adams

Robert Linares

Theodorus Strous

item

Minimum

Maximum

Stock options

Share-based compensation

Number of equity-based compensation plans

Number of shares of common stock authorized under the 2012 Share Incentive Plan

5,000,000

Remaining shares available for issuance under the plan

607,500

68,750

Number of options to each director for each board meeting held

6,250

Assumptions used to calculate fair value of options

Weighted average calculated value of options granted (in dollars per share)

$0.26

Expected dividend yield (as a percent)

0.00%

Risk-free interest rate (as a percent)

0.66%

Expected life

'3 years

Expected volatility (as a percent)

102.30%

Options

Options outstanding at the beginning of the period (in shares)

4,092,500

Granted (in shares)

706,250

206,250

Expired/cancelled (in shares)

-406,250

Options outstanding at the end of the period (in shares)

4,392,500

4,092,500

Options exercisable at the end of the period (in shares)

1,961,333

Weighted Average Exercise Price

Options outstanding at the beginning of the period (in dollars per share)

$0.87

Granted (in dollars per share)

$0.36

$0.70

$0.80

Expired/cancelled (in dollars per share)

$0.88

Options outstanding at the end of the period (in dollars per share)

$0.76

$0.87

$0.42

Options exercisable at the end of the period (in dollars per share)

$0.76

Weighted-Average Remaining Contractual Term

Options outstanding at the beginning of the period

'2 years 4 days

'2 years 6 months 14 days

Weighted average contractual term

'2 years 8 months 26 days

Options outstanding at the end of the period

'2 years 4 days

'2 years 6 months 14 days

Exercisable

'1 year 10 months 20 days

Intrinsic value of options outstanding and of options exercisable

Intrinsic value of options outstanding

$299,900

Intrinsic value of options exercisable

176,109

Total compensation costs

59,741

457,230

193,150

1,724,979

54,429

Deferred tax asset recorded, relating to recognized compensation cost

Unrecognized compensation cost

Unrecognized compensation cost related to nonvested awards

$129,043

Weighted average period to recognize unrecognized compensation cost related to nonvested awards

'2 years 6 months

RELATED_PARTY_TRANSACTIONS_Det

RELATED PARTY TRANSACTIONS (Details) (USD $)

0 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

0 Months Ended

9 Months Ended

Jun. 05, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Jul. 02, 2013

Dec. 31, 2013

14-May-13

Dec. 31, 2013

21-May-13

ADGC

Adams Monahan, LLP

Michael R. Monahan

Theodorus Strous

Theo Strous and Michael R. Monahan

Messrs. Adams and Monahan

Related parties

Expenses for professional and consulting services provided by related party

$30,410

$19,658

$86,433

$11,000

$4,000

$25,000

$45,000

Cash portion of purchase price

100,000

Number of shares of common stock forming part of subscription rights

1,000,000

988,380

Price per share of common stock issuable as subscription rights (in dollars per share)

$0.01

Fair value of subscription rights

770,000

Deemed shares issued previously allocated for indemnification of directors

1,000,000

Remaining indemnification liability

117,306

Remaining indemnification liability per month

$7,500

INVESTMENT_IN_JOINT_VENTURE_De

INVESTMENT IN JOINT VENTURE (Details) (Grace Rich Agreements, USD $)	3 Months Ended	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Sep. 16, 2013
Investment in joint venture	'	'	'
Ownership percentage in joint venture	'	'	30.00%
Revenues from joint venture	$250,000	$250,000	'
Joint venture related expenses	$63,334	'	'
Minimum	'	'	'
Investment in joint venture	'	'	'
Ownership percentage in joint venture	'	'	30.00%

LITIGATION_Details

LITIGATION (Details) (USD $)	Dec. 31, 2013	Mar. 31, 2013	Jul. 26, 2013	Jul. 26, 2013	Jul. 26, 2013
LITIGATION (Details) (USD $)	Dec. 31, 2013	Mar. 31, 2013	ADI	ADGC	ADI and ADGC
Litigation	'	'	'	'	'
Maximum number of shares that can be acquired	'	'	16,000,000	1,000,000	'
Common stock, par value (in dollars per share)	$0.00	$0.00	'	'	$0.01