CHARLES & COLVARD LTD 8-K

What Happened

• Charles & Colvard, Ltd. (the Company) — which filed a voluntary Chapter 11 petition on March 2, 2026 — entered into an Asset Purchase Agreement dated April 15, 2026 with Van Lang Jewelry LLC (or affiliate Jewelry Design Partners LLC) for the sale of substantially all of the Company’s assets for $1,500,000 (subject to a credit bid and offset against indebtedness under a March 24, 2026 Section 364 financing loan). The Buyer may be designated the stalking-horse bidder if approved by the Bankruptcy Court. A former director, Duc Pham (who resigned March 25, 2026), is a manager of Jewelry Design Partners LLC.

Key Details

• Purchase price: $1,500,000, subject to credit bid/offset against indebtedness under the Section 364 loan dated March 24, 2026.
• Dates and deadlines: Chapter 11 filed March 2, 2026; Purchase Agreement dated April 15, 2026; potential termination if the transaction does not close by July 7, 2026; Bankruptcy Court sale order expected by July 2, 2026.
• Break-up/expense protections: Buyer may receive a $45,000 cash break-up fee and reimbursement of up to $45,000 in documented out-of-pocket expenses, subject to Bankruptcy Court approval and the Purchase Agreement terms.
• Sale process: Transaction is subject to Bankruptcy Court approval, customary closing conditions, and higher-or-better competing bids under section 363 of the Bankruptcy Code.

Why It Matters

• This filing signals a potential exit plan for the Company’s bankruptcy case via a court-approved sale of assets. The sale price and the credit-bid arrangement indicate secured creditors and the buyer’s financing role will strongly affect recoveries.
• For retail investors, the Company warns trading its common stock during Chapter 11 is highly speculative; holders of common stock could experience a significant or complete loss depending on the outcome of the bankruptcy and sale process. The transaction is not final and remains subject to competing bids and court approval.