RESEARCH
TRIANGLE PARK, N.C., Dec. 11,
2024 /PRNewswire/ -- Charles & Colvard,
Ltd. ("Charles & Colvard" or the "Company") (Nasdaq: CTHR)
today announced that on December 5,
2024, it received an interim award in its confidential
arbitration with Wolfspeed, Inc. Importantly, the award
rejected Wolfspeed's claims to expectation damages of approximately
$22.8 million, limiting the Company's
damages to just $3.3 million
representing approximately $1.3
million for inventory previously purchased and approximately
$2.0 million of consigned inventory
in the Company's possession, that will now be recorded on the
Company's balance sheet as of June 30,
2024 - along with interest, arbitration and limited
attorney's fees as described below.
"We consider this a significant victory for the Company and its
shareholders, as Wolfspeed sought total damages in excess of
$28 million. This resolution allows
us to focus on our business and move forward to execute on our
strategic plans while no longer being obligated under a long-term
purchase commitment that we believe hindered the Company's growth
and profitability for quite some time," said Company President and
Chief Executive Officer Don
O'Connell.
Under the terms of the interim award, the arbitrators rejected
Wolfspeed's claims for additional expectation damages. The Company
is required to pay Wolfspeed the undisputed amount of approximately
$1.3 million for product previously
purchased and already reflected as a payable in the Company's
historical financial statements. In addition, the Company is
also required to purchase and pay Wolfspeed approximately
$2.0 million for raw material
delivered to the Company on consignment, which will have a positive
impact on the Company's balance sheet by increasing inventory by a
similar amount as of June 30,
2024. Wolfspeed is entitled to recover interest at the rate
of 8% per annum on the foregoing compensatory damages between
April 24, 2023, until paid. The
arbitrators' fees and expenses shall be borne by the Company and
will be included in the final award. Wolfspeed was awarded
attorney's fees and costs incurred in connection with this
arbitration, but not for any time related to arguing for
expectation damages, nor for expert witness fees and
expenses. No later than January 4,
2025, Wolfspeed shall submit a petition for its attorney's
fees and costs together with a supporting affidavit on the
reasonableness and necessity of (i) the time spent, (ii) the number
of attorneys who worked on the matter, (iii) the hourly rates
charged, compared to the customary fees charged in the community
for similar services by lawyers of similar experience, and (iv) the
costs incurred. All such costs shall be supported by documentation.
The Company shall have 15 days from the service of Wolfspeed's
petition to respond. The arbitrators shall review the parties'
submissions on the issue of attorney's fees and costs and then
issue a final award.
About Charles & Colvard, Ltd.
Charles & Colvard, Ltd. (Nasdaq: CTHR) believes that fine
jewelry should be as ethical as it is exquisite. Charles &
Colvard is the original creator of lab grown moissanite (a rare
gemstone formed from silicon carbide). The Company brings
revolutionary gems and fine jewelry to market by using exclusively
Made, not Mined™ above ground gemstones and a dedication to 100%
recycled precious metals. The Company's Forever One™ moissanite and
Caydia® lab grown diamond brands provide
exceptional quality, incredible value and a conscious approach to
bridal, high fashion, and everyday jewelry. Charles & Colvard
was founded in 1995 and is based in North
Carolina's Research Triangle
Park region. For more information, please
visit https://www.charlesandcolvard.com/.
Forward-Looking Statements
This press release contains a number of 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. Words such as "plan," "expect," "will,"
"working," and variations of such words and similar future or
conditional expressions are intended to identify forward-looking
statements. These forward-looking statements include, but are not
limited to, the ability of the Company to continue its business.
These forward-looking statements are not guarantees of future
results and are subject to a number of risks and uncertainties,
many of which are difficult to predict and beyond our control.
Actual results could differ materially from those contemplated by
the forward-looking statements as a result of certain factors
detailed in the Company's filings with the Securities and Exchange
Commission, including the risks and uncertainties described in more
detail in our filings with the SEC, including our Annual Report on
Form 10-K for the fiscal year ended June 30,
2023 and subsequent reports filed with the SEC. For example,
there can be no assurance that the Company will succeed in pursuing
its strategic plan, or regain compliance with the Nasdaq Listing
Rules during any compliance period or in the future, or otherwise
meet Nasdaq compliance standards, and its reliance on Wolfspeed as
its sole supplier of silicon carbide subjects it to risk.
Forward-looking statements speak only as of the date they are made.
The Company disclaims and does not undertake any obligation to
update or revise any forward-looking statement in this press
release, except as required by applicable law or regulation and you
are urged to review and consider disclosures that we make in the
reports that we file with the SEC that discuss other factors
relevant to our business.
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SOURCE Charles & Colvard, Ltd.
