CHARLES & COLVARD LTD: debt financing — Charles & Colvard receives default notice on $2M note; court orders board election certification

CHARLES & COLVARD LTD

Received default notice on $2M convertible secured note due Oct 3, 2025; company disputes validity, litigation pending, discussions with holder opened.
North Carolina Business Court ordered certification of board election results, excluding shares from Note Conversion Agreement with Ethara Capital.
Four directors elected (Franklin, Levin, Pham, Sems); tie for fifth seat leaves board vacancy.
Director Neal Goldman resigned from board effective immediately; not due to disagreement with company.

Key facts

Extracted from this filing and checked against the source text.

Debt Financings SEC 8-K Item 2.03/2.04 confidence 0.9

CHARLES & COLVARD LTD reported a default on convertible notes of $2.0 million with Ethara Capital LLC at increased from an annual rate equal to 5% to 9%, effective October 3, 2025 maturing October 3, 2025.

Instrument: convertible notes
Principal: $2.0 million
Counterparty: Ethara Capital LLC
Rate: increased from an annual rate equal to 5% to 9%, effective October 3, 2025
Maturity: October 3, 2025
Event: default

Exact text from the filing

limited liability company. In connection with the Note Purchase Agreement, the Company issued a convertible secured 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. On November 25, 2025, the Company received a notice of default from the Holder asserting that an event of default by

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Source: SEC EDGAR

accession 0001104659-25-118916

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