Charles & Colvard (NASDAQ: CTHR) voids note conversion, resets share count

Rhea-AI Filing Summary

Charles & Colvard, Ltd. filed an amended current report to correct its share count and clarify the treatment of a prior note conversion. The company had issued a $2.0 million convertible secured note dated July 3, 2025, due October 3, 2025, to Ethara Capital LLC.

Under an August 29, 2025 Note Conversion Agreement, $200,000 of principal and accrued interest was intended to convert into 1,353,180 common shares at a $0.1478 conversion price. After reviewing this transaction and a related default notice, the Board determined on February 26, 2026 that the attempted conversion was invalid because it lacked required shareholder approval.

As a result, the company states that the correct number of authorized and outstanding shares is 3,118,273, and no other aspects of the earlier disclosure are being changed in this amendment.

Positive

• None.

Negative

• Convertible note default dispute: The company received a notice of default for failing to pay the accreted principal and accrued interest at the note’s maturity, highlighting refinancing and liquidity risk around the $2.0 million secured obligation.
• Invalidated share issuance: A prior conversion of $200,000 plus interest into 1,353,180 shares was deemed invalid due to lack of required shareholder approval, signaling governance and process control weaknesses around significant equity transactions.

Insights

Credit and capital structure analyst

Board voids note conversion after default dispute, tightening share count.

The company originally used equity to settle $200,000 plus interest on a $2.0 million convertible secured note, issuing 1,353,180 shares at a $0.1478 conversion price. That step reduced cash obligations but increased share count materially relative to 3,118,273 shares outstanding.

After receiving a default notice over unpaid amounts at maturity, the Board reassessed both the default claim and the prior conversion. It concluded the conversion was invalid because required shareholder approval had not been obtained, so those shares are no longer counted as outstanding.

This restores the share base to 3,118,273 but leaves the underlying financing and default history in place. Future disclosures in company filings may clarify how remaining note obligations and the asserted event of default are resolved and how that affects capital structure.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 29, 2025

Charles & Colvard, Ltd.

(Exact name of registrant as specified in its charter)

North Carolina	000-23329	56-1928817
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

170 Southport Drive
Morrisville, North Carolina	27560
(Address of principal executive offices)	(Zip Code)

(919) 468-0399

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report) 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

Explanatory Note

This Current Report on Form 8-K/A (this “Amendment”) amends the Current Report on Form 8-K (the “Original Filing”) of Charles & Colvard, Ltd. (the “Company”) filed with the Securities and Exchange Commission on September 5, 2025. The Company is filing this Amendment solely for the purpose of updating the Original Filing and correcting the number of the Company’s authorized and outstanding shares. Except as described herein, this Amendment does not modify or update any other information contained in the Original Filing.

Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed on June 24, 2025, the Company entered into a Convertible Secured Note Purchase Agreement (the “Note Purchase Agreement”) with Ethara Capital LLC (the “Holder”), a Delaware limited liability company. In connection with the Note Purchase Agreement, the Company issued a convertible secured note (the “Note”) to the Holder for an aggregate total purchase price of $2.0 million, dated July 3, 2025 and due and payable on October 3, 2025.

As previously disclosed on September 5, 2025, the Company entered into a Note Conversion Agreement (the “Note Conversion Agreement”), dated August 29, 2025, with the Holder whereby the parties agreed to convert $200,000.00 in principal and accrued but unpaid interest on the Note into 1,353,180 shares of the Company’s common stock at a conversion price of $0.1478 set forth in the Note (the “Disclosed Conversion”).

As previously disclosed on December 5, 2025, the Company received, on November 25, 2025, a notice of default from the Holder asserting that an event of default by the Company had occurred due to the Company’s failure to pay the accreted principal amount and the accrued and unpaid interest on the maturity date of the Note (the “Event of Default”). The Company considered the validity of the Event of Default and held discussions with the Holder. The Company’s Board of Directors reviewed the facts and circumstances related to the Disclosed Conversion and the Event of Default, including that the Disclosed Conversion was attempted without obtaining the required approval of the Company’s shareholders, and determined on February 26, 2026, that the Disclosed Conversion was invalid and as such, the correct and accurate number of the Company’s authorized and outstanding shares is 3,118,273.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Charles & Colvard, Ltd.
March 12, 2026	By	/s/ Clint J. Pete
		Clint J. Pete
		Chief Financial Officer

FAQ

What is the main purpose of Charles & Colvard (CTHR) filing this Form 8-K/A?

The amendment primarily corrects the company’s authorized and outstanding share count. After reviewing a prior note conversion, the Board determined the attempted issuance of 1,353,180 shares was invalid without shareholder approval, so the accurate share total is now reported as 3,118,273.

What were the key terms of Charles & Colvard’s convertible secured note with Ethara Capital LLC?

Charles & Colvard issued a convertible secured note to Ethara Capital LLC for an aggregate purchase price of $2.0 million. The note was dated July 3, 2025 and was due and payable on October 3, 2025, giving the lender a secured position and potential equity conversion rights.

What was the attempted note conversion that Charles & Colvard later deemed invalid?

On August 29, 2025, the company agreed to convert $200,000 of principal and accrued but unpaid interest into 1,353,180 common shares at a $0.1478 conversion price. The Board later determined this conversion was invalid because required shareholder approval had not been obtained beforehand.

How many shares of Charles & Colvard common stock are now reported as authorized and outstanding?

After invalidating the prior conversion issuance, the Board concluded that the correct and accurate number of the company’s authorized and outstanding common shares is 3,118,273. This figure replaces the higher total that would have included the 1,353,180 disputed shares.

What default-related issue did Charles & Colvard face under the Ethara Capital note?

On November 25, 2025, the company received a notice of default from Ethara Capital asserting an event of default. The notice alleged failure to pay the accreted principal and accrued, unpaid interest on the note’s October 3, 2025 maturity date, prompting subsequent Board review.

Does this 8-K/A amendment change any disclosures other than Charles & Colvard’s share count?

The amendment states it is filed solely to update and correct the number of authorized and outstanding shares. It explicitly notes that, aside from this correction linked to the invalidated conversion, it does not modify or update any other information previously disclosed.

Filing Exhibits & Attachments

3 documents

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA 3.0 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE 33.4 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE 21.9 KB