false
0001015155
0001015155
2026-06-22
2026-06-22
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 22, 2026
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. ¨
Item 1.01 Entry into a Material Definitive
Agreement.
As previously disclosed, on
March 2, 2026, Charles & Colvard, Ltd., a North Carolina corporation (the “Company”), filed a voluntary petition for relief
(the “Chapter 11 Case”) under Chapter 11 of Title 11 of the United States Code (“Chapter 11”) in the United States
Bankruptcy Court for the Eastern District of North Carolina (the “Bankruptcy Court”). The case is styled as In re Charles
& Colvard, Ltd.
Also as previously disclosed, on
April 15, 2026, the Company finalized negotiations of an Asset Purchase Agreement (the “JDP Purchase Agreement”) with
Van Lang Jewelry LLC or its affiliate Jewelry Design Partners
LLC (“JDP”), pursuant to which, subject
to the terms and conditions set forth therein, including approval of the Bankruptcy Court, JDP agreed to acquire the assets of the Company
(except for the Excluded Assets, as listed on Schedule 1 thereto) and assume certain liabilities (the “JDP Transaction”),
for consideration of $1,500,000 (subject to a credit bid and offset against all of the indebtedness owed to JDP under the Section 364
Financing Loan Agreement dated March 24, 2026, by and between the Company and JDP (the “DIP Facility”)). A former member of
the Company’s Board of Directors (the “Board”), Duc Pham, who resigned from the Board on March 25, 2026, is a Manager
of JDP.
Also as previously disclosed, on
April 29, 2026, the Bankruptcy Court entered an Order (i) approving JDP as the “stalking horse” bidder with respect to the
assets to be acquired under the JDP Purchase Agreement on the terms set forth in the Order, (ii) approving the “stalking horse”
bidder to credit bid all or any portion of the outstanding DIP Obligations (as defined in the JDP Purchase Agreement) under the DIP Facility,
as a part of the purchase price under the JDP Purchase Agreement, (iii) approving the credit bid provisions contemplated by the JDP Purchase
Agreement, (iv) approving the stalking horse break-up fee and expense reimbursement as set forth in the JDP Purchase Agreement, and (v)
approving the proposed bidding procedures. The Bankruptcy Court scheduled the final sale hearing for June 22, 2026, at 11:00 a.m. ET.
The JDP Transaction was to be conducted pursuant to Bankruptcy Court-approved bidding procedures and was subject to (a) the receipt of
a bid that meets the specifications set forth in the JDP Purchase Agreement and that constitutes, in the Company’s reasonable judgment,
a higher or otherwise better offer from competing bidders, (b) approval of the sale by the Bankruptcy Court, and (c) the satisfaction
of certain conditions to closing. On April 30, 2026, after approval of the Bankruptcy Court, the Company countersigned the JDP Purchase
Agreement.
On June 22, 2026, the Company held an auction
pursuant to the bidding procedures approved by the Bankruptcy Court (the “Auction”). At the conclusion of the Auction, the
Company determined the bid submitted by AJS Creations, Inc. (“AJS”) was the highest or otherwise best bid and designated AJS
as the successful bidder for the Company’s assets (except
for the Excluded Assets, as listed on Schedule 1 to the AJS Purchase Agreement (as defined below)).
The Company also determined that the bid submitted by Light & Star USA Inc. (“Light & Star”) was the second highest
or otherwise second-best bid and designated Light & Star as the back-up bidder for the Company’s assets (except
for the Excluded Assets, as listed on Schedule 1 to the AJS Purchase Agreement).
On June 22, 2026, the Company and AJS entered
into an Overbid Purchase Agreement (the “AJS Purchase Agreement”), pursuant to which, subject to the terms and conditions
set forth therein, AJS agreed to acquire specified assets related to the Company’s business and assume certain liabilities (the
“AJS Transaction”), subject to the Bankruptcy Court’s approval, for cash consideration of $2,700,000.
The AJS Purchase Agreement contains customary
representations and warranties of the parties and is subject to a number of closing conditions, including, among others, (i) the accuracy
of representations and warranties of the parties; (ii) the entry of an order approving the AJS Purchase Agreement and the transactions
contemplated therein by the Bankruptcy Court; and (iii) compliance in all material respects with the obligations of the parties set
forth in the AJS Purchase Agreement.
Upon the consummation of the AJS Transaction,
the JDP Purchase Agreement will terminate, and the Company will use a portion of the purchase price received from AJS to pay Van Lang
Jewelry LLC a break-up fee of $45,000.
On June 25, 2026, the Bankruptcy Court approved
the AJS Purchase Agreement and the transactions contemplated therein.
The AJS Purchase Agreement may be terminated by
AJS or the Company under certain circumstances, including, among others, if the AJS Transaction is not consummated by July 7, 2026 (subject
to specified extensions), or upon the occurrence of certain Bankruptcy Court actions.
The foregoing description of the AJS Purchase
Agreement is not complete and is qualified in its entirety by reference to the AJS Purchase Agreement, a copy of which is attached to
this Current Report on Form 8-K as Exhibit 10.1 and is hereby incorporated herein by reference.
Cautionary Note Regarding the Chapter 11
Case
The Company cautions that trading in the Company’s
common stock during the pendency of the Chapter 11 Case is highly speculative and poses substantial risks. Trading prices for the Company’s
common stock may bear little or no relationship to the actual recovery, if any, by the holders of the Company’s common stock in
the Chapter 11 Case. The Company expects that holders of the Company’s common stock may experience a significant or complete loss
on their investment, depending on the outcome of the Chapter 11 Case. Accordingly, the Company urges extreme caution with respect
to existing and future investments in its common stock.
Cautionary Statements Regarding Forward-Looking
Statements
This Current Report on Form 8-K contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements typically can be identified by use of terms such as “may,” “will,”
“should,” “could,” “expect,” “intend,” “plan,” “anticipate,” “believe,”
“estimate,” “predict,” “continue,” and similar words, although some forward-looking statements are
expressed differently. All forward-looking statements are subject to the risks and uncertainties inherent in predicting the future. You
should be aware that although the forward-looking statements included herein represent management’s current judgment and expectations,
the Company’s actual results may differ materially from those projected, stated, or implied in these forward-looking statements
as a result of many factors including, but not limited to, risks attendant to the bankruptcy process, including the Company’s ability
to obtain court approval from the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court throughout the
course of Chapter 11; the effects of Chapter 11, including increased legal and other professional costs necessary to execute the Company’s
restructuring process, on the Company’s liquidity (including the availability of operating capital during the pendency of Chapter
11); the effects of Chapter 11 on the interests of various constituents and financial stakeholders; the length of time that the Company
will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of Chapter 11; objections
to the Company’s restructuring process or other pleadings filed that could protract Chapter 11; risks associated with the Company’s
proposed restructuring plan; risks associated with third-party motions in Chapter 11; Bankruptcy Court rulings in the Chapter 11 process
and the outcome of Chapter 11 in general; employee attrition and the Company’s ability to retain senior management and other key
personnel due to the distractions and uncertainties; in addition to the other risks and uncertainties described in more detail in the
Company’s filings with the U.S. Securities and Exchange Commission. Furthermore, such forward-looking statements speak only as of
the date of this Current Report on Form 8-K. Except as required by applicable law, the Company does not intend to update any of the
forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of
unanticipated events.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number |
Description |
| 10.1 | Overbid Purchase Agreement by and between Charles & Colvard, Ltd. and AJS Creations, Inc., dated June
22, 2026 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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. |
| |
|
|
| June 26, 2026 |
By |
/s/ Clint J. Pete |
| |
|
Clint J. Pete |
| |
|
Chief Financial Officer |
