Happy Friday, and - Happy Holidays! We are in our peak sales time now and combined with our current lawsuit roster, time is scarce so this months update might be a bit more spartan, but that said, let's get underway with the latest updates!Amora Gem Updates:Sold out of 1ct, 1.25ct, 1.50ct Ultra's:
Even with our best efforts, we are currently sold out and have been sold out for some of the main sizes - 1ct, 1.25ct and 1.50ct. We do have more rough, the issue really has been high demand vs. production bottlenecks. This of course directly ties back to the swindling of our previously planned latest robot that otherwise would be running now, and boosting production for the Holidays.
Regardless as noted, we have more rough and are processing more but how many we can complete in time for the holidays is still unclear. We will hopefully have at least one restock in early December for these sold out sizes.Robot vendor lawsuit update:
A ton of time this past month has been consumed pursuing not one, but now two, lawsuits to the point that it's starting to feel at least for me, more like running a law firm rather than a gem manufacturer. I'll discuss the second lawsuit under the BTD section since it is not Amora Gem specific. Continuing with the larger suit against our former robot supplier however - the lawsuit was finalized and served in early November. Their US attorney has been in contact and the surprise defense is: their CEO claims that he did not take the money, but rather a hacker did.
Basically the defense is that it was a hacker posing as him for some time and he was unaware of what was happening. Instead the hacker was relaying all this detailed robotics info along with payment requests.
They certainly couldn't just say they took the funds and I was wondering what 'creative' response we would get to the lawsuit.
The net though is of course either way we are out of a lot of money, as well as the planned robot, and it has been a major and expensive disruption.
Of interest, the robot company was amazingly hoping we would continue to do business with them. We made it very clear that was not an option, whatsoever, and they are to have zero contact with anyone on our staff again.
The case will likely continue on until May as the discovery process starts up, however, the bulk of the work was in simply laying out the case and pulling all the supporting data. Thus going forward it will not be as direct a time sink as before for us, though the defending robot company will have a lot of work to do. More updates as it progresses. TIGER robot updates!
For some positive updates - our TIGER robot cutting system has been flying through the various milestones thanks to our brilliant PhD robot lead, combined with a lot of working weekends and late evenings. The initial design spec, initial mechanical drawings, component and total architecture have all been completed. It is very much an order of magnitude leap over our previous robot suppliers systems. We are now moving into the actual parts selection and procurement as well as initial software design.
I did see a demo of the ultra-high precision motors we will be using to power TIGER's arms and it was amazing.
I don’t have video, but the short description is this:
Take a saw blade and cut a thin mm wide slit in it. Cut a breakable stick that can perfectly fit within the tiny slit in the circular saw blade, with minimal clearance.
Now - have one motor spinning the saw blade. The other motor powers the stick mounted on a straight track that goes underneath the spinning saw blade.
Thus, for the stick to go past the saw blade, it has to be timed and spaced so that the stick is perfectly positioned to pass through the small slit, or it will be hit by the spinning blade.
Both robotic motors are able to talk to each other and as a result they can achieve unbelieveable precision.
The demo was the blade spinning first at a slower speed, and the stick is repeatedly moved back and forth 'through the blade' such that the stick is never touched - perfect split-second timing as it moves backand forth, putting the stick perfectly into the slit in order to pass time after time.
The grand finale was running the spinning blade at high speed - and then backing the stick holder to the very back of the track. The motors sync and the stick is shot down the rail at high speed right into the blade - and then pops out the other side, with the stick untouched.
In other words even at very high speed of both spinning the blade and moving the stick, both motors were able to perfecly coordinate their precise location and movements in a way that almost seems like magic and allow the stick to pass at high speed, untouched!
It was extremely impressive, and I am very excited about our new robotics division and our TIGER cutting robots. There is no doubt in my mind these will be the world's premiere gem cutting robots. We are on track for having the first one moving into production in May.Three years ago - Amora Gem was introduced to the world!
Of interest, the very first post on this blog was 11/11/11 and we introduced the first Amora Gem to everyone here along with a press release. Kind of amazing to think how far we've come and of course, the best is yet to come with the US patent soon expiring in 2015. What seemed 'forever' back then is now rapidly approaching.Amora Gem *fancy light blue* Sold Out:
We've officially sold the last of our fancy light blue Amora Gems. These were available in both the Cushion and Ultra H&A round, but were these were a fluke in the growth process that has not since been repeated. Thus, barring any returns, we have taken down both of those pages as we have no ability to grow more intentionally and production will simply have whites going forward.Amora Gem - jeweler comment:
Finally, I'll share some nice feedback from a jeweler who saw an Amora Gem for the first time and emailed us: "…it looks like you hit it out of the park with the Amora Gem. Congrats. These gems might throw the industry a curve ball. Impressive."BTD News: Massive Regal Seamless pre-stocking underway:
Our Timeless Regal, now in the 'seamless' version, has become by far, far away our best selling ring. However, with the high pressure enhancement adding a week to the time involved in making it, plus two additional weeks for the casting, polishing setting, we have decided to undertake a massive pre-stocking effort where we will be pre-stocking a large amount of Regals in both platinum and palladium and in a number of ring sizes in order to cut the typical turnaround from 3 weeks to 1.5 weeks.
The reason the pre-stocking is so large is because we want to continue to offer rings that are sized when cast, and thus avoid having to cut and solder back the ring during setting. By having the ring cast in the exact size, it avoids that seam and thus creates an even stronger ring than if it was simply sized as part of the setting process.
We've got over one hundred Regals in casting right now in a variety of rings sizes and center stone sizes, and hopefully that will allow us to greatly improve the order turnaround on our very popular Regal ring.Customer feedback on the new Seamless Regal:
I'm happy to note that Lucid115 recently posted her feedback and some photos of her new Seamless Regal and wanted to share that here. Below is a great photo she took that shows the profile view of the Seamless Regal with a center Amora Gem, and you can see more in the thread link below. Thanks to Lucid115 for posting these!
Full thread: http://betterthandiamond.com/discussion/...ever#Post837859 Yet another lawsuit - vendor overbilling:
On some disappointing news, we had to file yet another lawsuit this month. This past summer we had discovered that a long time vendor had been consistently over-billing us. After an audit and finding the amount was rather large, the vendor stated it was an oversight and while they could not pay back the amount up front, they would pay it back on a monthly schedule. Basically, the same items were being billed repeatedly on each invoice, so that while we audited invoices periodically, it was just one invoice at a time and each individual invoice would look fine. It was not until invoices were cross-checked that the overbilling mechanism was uncovered.
Unfortunately, they failed to abide by their own repayment schedule. After multiple extensions, and then more broken promises and no payment, as we warned them, we filed suit to recover the money as well as interest, punitive damages and attorney's fees.
Amazingly, two days after the vendor was served with the lawsuit - guess what - our long overdue first payment arrived. Amazing how that works.
Unfortunately that's a case of 'too little, too late' and the lawsuit will continue until the full amount is paid back. And due to the way WA law works, the amount they will end up paying is now significantly higher than if they had simply made the payments they agreed to.
We no longer do any business with this vendor.The future of Moissanite pricing = CZ levels - per Charles and Colvard:
If you've been watching Moissanite pricing the past few years, you've no doubt noted the steady downward spiral in the price of Moissanite and Forever Brilliants. With the US patent soon expiring, there's been a lot of speculation as to whether the price of Moissanite would get even cheaper.
Charles and Colvard recently shed a lot of light on that at an investor conference, where they announced that they are working to drive Moissanite pricing to the levels of high end CZ, or another 50% from current pricing.
At least now their future pricing plans are clear, and we'll see how that plays out next year in terms of the dropping in price of Forever Brilliants and Moissanite.
Related to that, two other items of note from Charles and Colvard the past few weeks:Charles and Colvard 3Q sales = -34%, loose stone sales = -52%:
Charles and Colvard released their 3Q earnings and the results were a bit surprising - total sales dropped 34%, loose stones sales of Moissanite and Forever Brilliant plunged to -52%. In sum, they had a net loss of $3.1 Million dollars, vs a year ago loss of $1.2 Million in the year ago 3Q.
After the earnings announcement, their stock dropped over 30%, and is now around 1.60 per share.
Part of the reason I posted this besides for general info, is that there is often speculation that there will be a 'flood' of new entrants into the Moissanite space next year when the patent expires. Other than Amora Gem, I'm not aware of any larger companies that have targeted getting involved, and the above results show that it's not been a financially rewarding path for CTHR shareholders so it's unlikely that many others will want to get involved. I'm sure there will be a few new entrants on a small scale, but nothing on the level that I think some people expected - it's not an easy road for any company to jump in.Forever Brilliant & Moissanite is 'enhanced' (!):
The one other surprise at the investor conference was that Charles and Colvard revealed that they have been enhancing their Forever Brilliant's and Moissanite via an annealing process (annealing means a heat treatment). This is a surprise because the last public comment on this was from their April 2013 press release (after they dropped Serenity who was doing the enhancement to make the original Forever Brilliants) and they stated:
the organic growth of silicon carbide crystals that results in such improved natural whiteness that no treatment, enhancement, or other whitening process is needed in order for Charles & Colvard to produce a dazzling gemstone that will be sold under its trademark, FOREVER BRILLIANT®.
As a result of this development, Charles & Colvard and Serenity Technologies, Inc. have agreed to terminate their agreement pursuant to which Serenity had previously provided Charles & Colvard with a whitening process for its gemstones.
At the conference, their CEO and CFO revealed that they have been whitening their stones with an annealing process:
Cree grows the material and we take it, slice it, dice it, and send it overseas and have it polished just like polishing any gemstone: ruby, sapphire, diamond.
And we bring it back, and we do an annealing process. It is a special formula we use that makes it permanent crystal clear.
We buy that hockey puck looking thing called a boule, we slice that like you slice bread with machinery. We cut it up into pre-forms. The preforms are a millimeter width and diameter that dictates what size stone we can polish out of it. We send it over to Sri Lanka, or China or various places. They polish the stone and they send it back to us, and we do the final annealing on it.
We also have some initiatives internal to re-treat that inventory, recut it into different shapes and sizes, and more popular shapes and sizes. And run it through ... when you recut it it creates a new chemical composition and we can retreat it with some of the improvements we have made over the last few years in house and improve the color of the stone. It makes it more appealing.
These new revelations conflict with what they had previously touted in their press release, as well as with their consistent attacks on the Amora enhancement process for their Moissanite. Note that we have enhanced Forever Brilliants as well and they get to the same G/H level as the regular Moissanite in our process. That means that whatever their annealing enhancement is, it is not as complete as the Amora enhancement, otherwise there would be no color improvement when their stones are run under the Amora enhancement.
Regardless, it appears that Forever Brilliants and Moissanite are actually enhanced after growth, and that is of course a surprise given their prior claims. Note that Amora Gem by comparison, does not need any enhancements - it simply is.Amora enhanced Production updates:
We've been able to continue with relatively steady production and so we now have 6.5mm, 7.0mm, 7.5mm and 8mm Amora Enhanced in stock again: https://betterthandiamond.com/products/Amora-Moissanite-Round.htmlAsha production - close to a restock:
We are continuing to process a larger batch of rounds, as well as a few princess and cushion sizes, and hope to have those restocking within the next two weeks. That will cover the currently sold out sizes as well as increase stock on other low stock sizes.Annual BTD Holiday Charity donation - Hero Rats!
Every year for the Holidays BTD makes a donation to a various charity. This year, we have made a donation to support Apopo.org, and their amazing 'Hero Rats'. What is a hero Rat? Basically, these are giant African rats that have been trained to clear landmines and by doing so, have already cleared out over 10 Million square meters of mine strewn land in Mozambique, Thailand, Cambodia, Tanzania and more. A total of 37,349 land mines and unexploded bombs have been removed thanks to these hero Rats. This is all land that was otherwise unusable due to mining from previous wars, and often land that killed or maimed innocent people as the mines are left over from by-gone conflicts. These special hero Rats are able to detect mines 50x faster than a human trying to do the same, and because they are light (3 pounds), they don't trigger the mines when stepping on them during the detection phase.
The rats have to go through a 9month plus training program to learn how to detect the mines and so our donation is to help fund their training so that the world can continue to become a better and safer place.
Here's a short video showing the hero Rats in training:
and a photo of the results (and why you don't want to go into these lands before the rats do their work) - a hidden land mine, one of over 37,000 detected by the rats, being detonated after detection by a hero Rat!
In short, these rats are able to save lives and limbs, and we are pleased to help fund Apopo's efforts towards this unique combination of human/rat teams to make the world a better place.
You can learn more at http://apopo.org