Accessibility StatementSkip Navigation RESEARCH TRIANGLE PARK, N.C., Nov. 17, 2025 /PRNewswire/ -- Charles & Colvard, Ltd. (OTC: CTHR) (the "Company"), a globally recognized fine jewelry company that specializes in moissanite and lab-grown diamonds, today announced a strategic partnership with VideoShops, a next-generation social commerce network built to change how commerce flows throughsocial with over 50,000 sellers transforming how people shop, share, and engage with today's consumers. "We believe this ...

Core Points - The 2025 Annual Meeting of Shareholders for Charles & Colvard is being held both virtually and in person [1] - Key executives present include Don O'Connell (President and CEO), Clint J. Pete (CFO), and Maria Flanagan (Corporate Secretary) [2] - Craig Colosso from Equiniti is appointed as the voting inspector for the meeting [2] Meeting Proceedings - Attendees received an agenda outlining the order of business for the meeting [3]

Core Insights - Charles & Colvard, Ltd. plans to expand its lab-grown diamond offerings to both consumers and wholesale markets, supported by Ethara Capital, which has a significant presence in the lab-grown diamond manufacturing sector [1][3][4] Group 1: Partnership and Investment - Ethara Capital has entered into a Convertible Secured Note Purchase Agreement with Charles & Colvard, converting the first 10% of its Note into common equity [2] - The partnership with Ethara is expected to enhance the supply chain for lab-grown diamonds, providing a vertically integrated and global supply chain [3][6] Group 2: Product Expansion - The expansion initiative will introduce new bridal and fashion designs to the Caydia lab-grown diamond fine jewelry offerings on the company's website [4] - Approved retailers will now have the opportunity to purchase lab-grown diamonds through the company's B2B platform, charlesandcolvarddirect.com, which will feature a variety of certified and non-certified loose lab-grown diamonds [5] Group 3: Market Positioning - The company aims to empower partners and customers with high-quality, responsibly made gemstones, strengthening its position in the lab-grown category [6] - Ethara Capital's investment aligns with its commitment to support companies innovating within the diamond industry, emphasizing affordability, quality, and social responsibility [6]

Market Overview - The market has experienced significant shifts, with several companies facing notable price declines due to sector-specific challenges and broader economic conditions [1] REX American Resources Corporation - REX American Resources Corporation's stock price has dropped over 50% to $30.54, facing potential operational challenges and broader market conditions affecting the Basic Materials sector [2] - The company's recent announcement regarding the conversion of REX-Osprey™ SOL + Staking ETF to a Regulated Investment Company structure may be a strategic move to enhance investor returns, but it may not have an immediate impact on REX's stock performance [2] Charles & Colvard, Ltd. - Charles & Colvard, Ltd. has seen a 42.65% decrease in its stock price to $0.43, facing challenges in the Luxury Goods and Consumer Cyclical sector [3] - The company's delisting from Nasdaq marks a significant change in its trading status, potentially contributing to the stock's decline [3] Bionano Genomics, Inc. - Bionano Genomics, Inc. experienced a 38.81% decline in its stock price to $1.69, specializing in genome analysis solutions [4] - Despite showcasing the utility of optical genome mapping in cancer biomarker analysis, market sentiment towards biotech investments and specific operational news may have contributed to the price drop [4] Osisko Development Corp. Warrant - Osisko Development Corp. Warrant saw a 32.43% decline to $0.25, with price movements influenced by fluctuations in gold prices and investor sentiment towards the Basic Materials sector [5] BT Brands, Inc. - BT Brands, Inc. experienced a 31.36% decline in its stock price to $0.31, operating in the quick-service restaurant industry [6] - The company faces challenges in the Consumer Cyclical sector, with market competition and broader economic factors affecting consumer spending potentially contributing to the stock's decline [6] Conclusion - The movements in these companies underscore the volatility and diverse factors influencing the market, with investors and analysts likely to monitor these developments for insights into the underlying causes of price changes and their potential long-term implications [7]

Financial Performance - Consolidated net sales for the three months ended September 30, 2024, were $3.23 million, a decrease of approximately $1.72 million, or 35%, compared to $4.95 million for the same period in 2023[110] - Sales of finished jewelry represented 92% of total consolidated net sales for the three months ended September 30, 2024, totaling $2.96 million, down 31% from $4.30 million in the prior year[112] - Sales of loose jewels accounted for 8% of total consolidated net sales, amounting to $270,000, a decrease of approximately $382,000, or 59%, compared to $652,000 in the same period last year[113] - U.S. net sales decreased to $3.23 million, or 32%, in the three months ended September 30, 2024, compared to $4.77 million in the prior year, with 100% of total consolidated net sales coming from the U.S.[114] - International net sales dropped to $0, a decrease of 100%, for the three months ended September 30, 2024, compared to $184,000 in the same period of 2023[116] Costs and Expenses - Total costs and expenses for the three months ended September 30, 2024, were $5.37 million, down from $7.58 million in the same period of 2023[110] - Total cost of goods sold decreased to $2.2 million for the three months ended September 30, 2024, down approximately $800,000, or 26%, from $3.0 million in 2023[119] - Sales and marketing expenses were $1.88 million for the three months ended September 30, 2024, a decrease of approximately $845,000, or 31%, from $2.72 million in 2023[123] - General and administrative expenses decreased to $1.26 million for the three months ended September 30, 2024, down approximately $590,000, or 32%, from $1.85 million in 2023[128] Operational Loss - The loss from operations for the three months ended September 30, 2024, was $2.14 million, an improvement from a loss of $2.63 million in the prior year[110] - During the three months ended September 30, 2024, approximately $1.29 million of cash was used in operations, primarily due to a net loss of approximately $2.13 million[146] Economic Challenges - The company continues to face challenges due to general economic uncertainties, inflation, and rising interest rates, impacting consumer confidence and demand for products[111] Strategic Initiatives - The company plans to focus on affordability initiatives and invest in lab-created gemstone technologies to meet evolving customer requirements[107] - The company is committed to expanding its product portfolio while maintaining a focus on domestic markets and growing global sales[107] Supplier Dependency - The company has historically depended on a single supplier for silicon carbide crystals, which poses a risk to its operations if supply is interrupted[100] - The company has a future minimum annual purchase commitment of SiC crystals ranging from approximately $4.00 million to $10.00 million each year under the Supply Agreement with Wolfspeed[157] - The company purchased $0 of SiC crystals from Wolfspeed during the three months ended September 30, 2024 and 2023[157] - The company agreed to pay Wolfspeed a total of $4.77 million as part of a settlement agreement related to a breach of contract claim[158] Financial Position - As of September 30, 2024, the company's cash and cash equivalents totaled $2.74 million, down from $4.14 million as of June 30, 2024[144] - The company's working capital decreased by approximately $2.04 million to $2.65 million from $4.69 million at June 30, 2024[145] - The company had $2.3 million in short-term borrowings on its line of credit as of September 30, 2024, with no long-term outstanding debt[140] - The company has access to a $5.00 million cash collateralized line of credit facility, which was amended multiple times since its inception[152] Tax and Regulatory Matters - The company recognized zero net income tax benefit or expense for the quarters ended September 30, 2024, and 2023[135] - The company had federal tax net operating loss carryforwards of approximately $24.76 million expiring between 2034 and 2037[151] - The company has substantial doubt about its ability to continue as a going concern within one year from the issuance of its financial statements[137] Interest Income - Interest income for the three months ended September 30, 2024, was $43,635, a decrease of $48,625, or 53%, from $92,260 in 2023[132] Market Impact - The company expects fluctuations in the price of gold and other precious metals to impact operating cash flow as it manufactures finished jewelry[148]

Core Points - Charles & Colvard, Ltd. has received a determination letter from Nasdaq indicating that the company will be suspended from trading and delisted due to non-compliance with Listing Rule 5250(c)(1) for failing to file Forms 10-Q for the quarters ended September 30 and December 31, 2024 [1] - The company does not plan to appeal this determination, citing a review of factors including the costs associated with remaining listed on Nasdaq [1] - Nasdaq will file a Form 25-NSE with the SEC regarding the delisting, with trading suspension set to begin on April 25, 2025 [2] - Post-delisting, the company anticipates that its common stock will be quoted on the OTC Experts Market, although there are no guarantees for maintaining a trading market [2] Company Overview - Charles & Colvard, Ltd. is known for creating lab-grown moissanite and emphasizes ethical practices in fine jewelry, using exclusively Made, not Mined™ gemstones and 100% recycled precious metals [3] - The company offers products under the Forever One™ moissanite and Caydia® lab-grown diamond brands, focusing on quality and value in bridal and fashion jewelry [3] - Founded in 1995, Charles & Colvard is based in Research Triangle Park, North Carolina [3]

Product Launch and Development - The company launched its exclusive brand of premium lab grown diamonds, Caydia®, in September 2020, featuring hand-selected diamonds validated by independent experts [76]. - Finished jewelry featuring Caydia® lab grown diamonds began selling in September 2020, with additional color options introduced in August 2024 [77]. - Caydia® lab grown diamonds undergo a quality assurance process where diamonds 0.50 carats or larger are hand-selected and certified for authenticity [90]. - The production of moissanite jewels involves proprietary processes, with a focus on maximizing raw material yield and maintaining high quality standards [82][83]. - Each moissanite jewel greater than 3.5 millimeters is individually graded, ensuring consistent quality through rigorous quality assurance measures [85]. - The company’s finished jewelry business is still developing, with plans to increase distribution through new and existing channels [112]. Market Position and Strategy - The company believes its leadership in the moissanite and lab grown diamond markets is supported by nearly three decades of innovation and experience [95]. - The company intends to expand market share by emphasizing the quality, design, and value of moissanite as an affordable alternative to more expensive gemstones [110]. - The company aims to build multiple strong brands sought after by consumers through partnerships with recognized designers and jewelry companies [111]. - The competitive landscape includes challenges from suppliers with greater resources, but the company aims to differentiate its products through quality and branding [99]. - The company faces competition from well-known brands in the fine jewelry market, which have greater financial resources for product development and marketing [109]. Financial Performance and Challenges - For the fiscal year ended June 30, 2024, approximately 15% of revenue was generated from the Moissanite by Charles & Colvard®, recently rebranded as Forever Bright™, gemstones and finished jewelry [103]. - The company has faced downward pricing pressures due to lower grade moissanite products entering the market at competitive price points [103]. - The company’s primary source of working capital is cash on hand and cash generated by operations, with ongoing concerns about inflation and potential liquidity challenges [115]. Consumer Engagement and E-commerce - The company has established a direct-to-consumer e-commerce presence, including charlesandcolvard.com and moissaniteoutlet.com, to enhance consumer engagement [96]. - The company has experienced growing traffic and interest in its website due to the ongoing attention around lab grown gems [106]. Regulatory Compliance - The company is subject to governmental regulations regarding the marketing of lab-grown diamonds, which require clear identification of the gemstone's lab-grown origin [118]. Employee Relations - The company has a total of 25 employees, with 24 being full-time and one part-time, and believes employee relations are good [119]. Sourcing and Supply Chain - The company emphasizes sourcing precious metals from conflict-free sources and requires suppliers to adhere to stringent guidelines [77]. - The company is positioned to meet just-in-time inventory needs, optimizing its supply chain for timely product delivery [96].

Core Points - Charles & Colvard, Ltd. received a notice from Nasdaq regarding non-compliance with Listing Rule 5250(c)(1) due to the late filing of its Quarterly Report for the fiscal quarter ended December 31, 2024 [1] - The company has until April 14, 2025, to file its Annual Report for the fiscal year ended June 30, 2024, and the Quarterly Report for the fiscal quarter ended September 30, 2024 [1] - Nasdaq requires the company to submit an update to its compliance plan by March 12, 2025, with limited exceptions for regaining compliance [1][2] Company Overview - Charles & Colvard is known for creating lab-grown moissanite and emphasizes ethical practices in fine jewelry production [3] - The company utilizes exclusively Made, not Mined™ gemstones and 100% recycled precious metals [3] - Founded in 1995, Charles & Colvard is based in Research Triangle Park, North Carolina [3]

Filing Status - Charles & Colvard, Ltd. filed a Notification of Late Filing on Form 12b-25 regarding its Quarterly Report for the period ended September 30, 2024[3] - The filing indicates that the company is still in the process of finalizing its financial results for the third quarter of 2024[4] Company Classification - The company is not classified as an emerging growth company under the Securities Act of 1933[2]

Core Viewpoint - Charles & Colvard has declared the nomination of director candidates by Riverstyx Capital Management as invalid, citing non-compliance with the company's bylaws [1][4]. Summary by Sections Company Response - Charles & Colvard received a notice from Riverstyx on August 27, 2024, regarding the nomination of three candidates for the Board of Directors at the upcoming Annual Meeting [1]. - The company stated that the notice did not meet the requirements outlined in its 2011 Amended and Restated Bylaws, which are designed to ensure adequate information for evaluating candidates [2][3]. Bylaw Compliance - The notice lacked essential information, including: - Biographies and work histories of the candidates - Ownership stakes of the candidates and the nominating person, Ben Franklin, along with his affiliates - Consent from each candidate to serve as a director [3]. Board's Decision - After reviewing the notice and its deficiencies, the Board informed Mr. Franklin that the nominations would not be recognized, and any proxies or votes for these candidates would be disregarded [4]. - The Board expressed its commitment to acting in the best interests of all shareholders and invited Mr. Franklin to discuss his views on the company's business and strategy directly with them [5]. Future Actions - Charles & Colvard's Board will provide a recommendation to shareholders regarding the upcoming Annual Meeting and director elections in due course, and shareholders are not required to take any action at this time [6].