A local company that processes diamonds for jewelers has reached an agreement with a Delaware-based investment company to restructure its debt.
Scio Diamond Technology Corp., based in Greenville, reached terms to get relief on interest payments and receive an additional $250,000 in funding from HGI Funding LLC of Delaware.
Under the terms of the debt restructure agreement, Scio Diamond was granted a note maturity extension by one year to December 2018. The company will get relief on interest payments and have access to $250,000 of additional funding from HGI. That funding will be matched dollar for dollar by investors including the Scio Diamond board of directors and management.
“Our board and lender, HGI, recognize the incredible opportunity we have before us and I believe this announcement demonstrates their support of the company's efforts," said Gerald McGuire, CEO of Scio Diamond, in a news release.
Scio Diamond is in the midst of an investigation by the U.S. Department of Justice and Securities and Exchange Commission regarding the indictment of former board chairman Edward Adams on charges of mail and wire fraud.
The indictment alleges Adams embezzled more than $4 million from 2006 to 2013 and created Scio Diamond to purchase Apollo Diamond Inc. — a company founded by his father-in-law — for $2 million. The Justice Department alleged Adams funneled that $2 million into bank accounts he controlled.
The company has also faced profitability struggles as SEC documents indicate the company had accumulated a deficit of $14.5 million since its inception in 2009 through 2015.