---
schema_version: "secwatch.filing_event.v1"
accession: "0001104659-25-063622"
form_type: "8-K"
ticker: null
cik: "0001015155"
company_name: "CHARLES & COLVARD LTD"
filed_at: "2025-06-27T23:59:59+00:00"
generated_at: "2026-05-18T15:24:57.612296+00:00"
event_type: "debt"
sentiment: "negative"
materiality_score: 0.7
calibrated_materiality_score: 0.7
confidence: "high"
source: SEC EDGAR
---

# Charles & Colvard enters $2M convertible note deal; CEO/CFO waive severance

## Summary
- Issues $2M convertible secured note to Ethara Capital in two tranches: $500k first closing, $1.5M second closing.
- Note bears 5% interest (cash or PIK), matures 3 months from issuance; extendable up to 39 months.
- Note is secured with second priority lien, subordinated to Wolfspeed Inc. debt of $2.44M.
- Ethara Capital receives right to appoint two directors before first closing and two observers after second closing.
- CEO Don O'Connell and CFO Clint Pete waive all severance benefits under employment agreements as condition.

## SEC filing metadata
- accession: 0001104659-25-063622
- form_type: 8-K
- cik: 0001015155
- company_name: CHARLES & COLVARD LTD
- filed_at: 2025-06-27T23:59:59+00:00
- event_type: debt
- sentiment: negative
- materiality_score: 0.7
- calibrated_materiality_score: 0.7
- confidence: high
- sec_items: 1.01, 2.03, 3.02, 5.02, 9.01
- EDGAR index: https://www.sec.gov/Archives/edgar/data/1015155/000110465925063622/0001104659-25-063622-index.htm
- EDGAR primary document: https://www.sec.gov/Archives/edgar/data/1015155/000110465925063622/tm2519259d1_8k.htm

## Machine-readable alternates
- HTML: https://secwatch.observer/filing/0001104659-25-063622
- JSON: https://secwatch.observer/filing/0001104659-25-063622.json
- Plain text: https://secwatch.observer/filing/0001104659-25-063622.txt

## Key facts
- Debt Financings
  CHARLES & COLVARD LTD incurred convertible notes of $500,000 with Ethara Capital LLC at 5% maturing three months following the date the Note is issued.
  - Instrument: convertible notes
  - Principal: $500,000
  - Counterparty: Ethara Capital LLC
  - Rate: 5%
  - Maturity: three months following the date the Note is issued
  - Event: incurrence
  source text: On June 24, 2025, Charles & Colvard, Ltd. (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 agreed to issue a convertible secured note (the “Note”) to the Holder for an aggregate total purchase price of $2.0 million, to be issued in two tranches: (i) an initial closing in the amount of $500,000 (the “Original Principal Amount”) on or before July 8, 2025 (the “First Closing”), and (ii) a subsequent and final closing of $1.5 million (the “Additional Principal Amount”) on such date as the Company and the Holder thereafter agree, but no later than July 23, 2025 (the “Second Closing,” and together with the First Closing, the “Closings”). The principal amount on which interest will accrue is equal to the Original Principal Amount as such amount may be (i) increased by payment of PIK Interest (as defi
  evidence_url: https://www.sec.gov/Archives/edgar/data/1015155/000110465925063622/0001104659-25-063622-index.htm
- Debt Financings
  CHARLES & COLVARD LTD incurred convertible notes of $1.5 million with Ethara Capital LLC at 5% maturing three months following the date the Note is issued.
  - Instrument: convertible notes
  - Principal: $1.5 million
  - Counterparty: Ethara Capital LLC
  - Rate: 5%
  - Maturity: three months following the date the Note is issued
  - Event: incurrence
  source text: On June 24, 2025, Charles & Colvard, Ltd. (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 agreed to issue a convertible secured note (the “Note”) to the Holder for an aggregate total purchase price of $2.0 million, to be issued in two tranches: (i) an initial closing in the amount of $500,000 (the “Original Principal Amount”) on or before July 8, 2025 (the “First Closing”), and (ii) a subsequent and final closing of $1.5 million (the “Additional Principal Amount”) on such date as the Company and the Holder thereafter agree, but no later than July 23, 2025 (the “Second Closing,” and together with the First Closing, the “Closings”).
  evidence_url: https://www.sec.gov/Archives/edgar/data/1015155/000110465925063622/0001104659-25-063622-index.htm

This AI-assisted summary is a reading aid. Review the linked SEC EDGAR filing before relying on any specific claim.