RESEARCH TRIANGLE PARK, N.C. - Charles & Colvard, Ltd. (NASDAQ:CTHR), a company specializing in lab-grown gemstones and fine jewelry, disclosed on Thursday that it has received a non-compliance notification from the Nasdaq Stock Market due to a delay in filing its annual financial report.
The notice, dated October 18, 2024, was issued because the company did not file its Annual Report on Form 10-K for the fiscal year ended June 30, 2024, by the due date of September 30, 2024. Charles & Colvard submitted a Notification of Late Filing on October 1, 2024, to the Securities and Exchange Commission (SEC).
Currently, the company's common stock remains listed and tradable on Nasdaq, with no immediate consequences on its status. Nasdaq rules provide Charles & Colvard with a 60-day period, until December 17, 2024, to submit a plan to regain compliance. If the plan is accepted, the company may be granted an extension of up to 180 days from the original due date of the Form 10-K, potentially until April 14, 2025, to meet the listing requirements.
The company has expressed its commitment to completing and filing the required Form 10-K promptly in an effort to regain compliance with Nasdaq's Listing Rule.
Charles & Colvard, founded in 1995 and headquartered in North Carolina, is known for creating lab-grown moissanite and offering fine jewelry that emphasizes ethical and sustainable practices.
The information in this article is based on a press release statement from Charles & Colvard, Ltd. and does not include any speculative content or predictions about the company's future performance or market standing. The company's forward-looking statements regarding its plans to regain compliance with Nasdaq listing rules are subject to various risks and uncertainties, and there is no assurance that compliance will be achieved within the provided timeframe.
In other recent news, Charles & Colvard reported a 25% annual sales drop for the fiscal year ended June 30, 2024, with net sales falling to $22.5 million from the previous year's $29.9 million. The company also anticipates a substantial net loss for the year, diverging from the previous year's $19.6 million net loss. Additionally, Charles & Colvard reported a 21% decrease in its third-quarter revenue with net sales amounting to $5.3 million, while the net loss improved to $3.6 million from the previous year's $8.4 million loss. In response to these developments, the company's top executives and directors have agreed to significant pay cuts, including a 10% reduction in base salaries for President and CEO, Don O'Connell, and CFO, Clint J. Pete. In corporate news, Charles & Colvard rejected director nominations from Riverstyx Capital Management's principal, Ben Franklin, due to non-compliance with the company's bylaws. Furthermore, the company announced a reverse stock split at a one-for-ten ratio, reducing its number of outstanding shares. Lastly, Charles & Colvard launched a new gem brand, For Everbright, as part of its strategic initiatives.
InvestingPro Insights
Charles & Colvard's recent notification of non-compliance with Nasdaq listing rules comes amid a challenging financial landscape for the company. According to InvestingPro data, the company's market capitalization has dwindled to just $3.75 million, reflecting significant investor concerns.
The company's financial health appears precarious, as evidenced by several key metrics. InvestingPro data shows that Charles & Colvard's revenue for the last twelve months as of Q3 2024 stood at $23.68 million, with a concerning revenue growth decline of -29.69% over the same period. This aligns with an InvestingPro Tip indicating that the company is "quickly burning through cash," which could explain the delay in filing its annual financial report.
Despite these challenges, it's worth noting that Charles & Colvard "holds more cash than debt on its balance sheet," according to an InvestingPro Tip. This financial cushion might provide some flexibility as the company works to address its compliance issues and operational challenges.
The stock's performance has been notably poor, with InvestingPro data showing a one-year price total return of -65.05% as of the latest available data. This decline is reflected in another InvestingPro Tip, which states that the stock is "trading near 52-week low."
For investors seeking a more comprehensive analysis, InvestingPro offers 17 additional tips for Charles & Colvard, providing a deeper understanding of the company's financial position and market performance.
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