Charles & Colvard Ends Supply Pact, Settles for $4.77M

Jewelry company Charles & Colvard Ltd. (NASDAQ:CTHR) has concluded a settlement with Wolfspeed (NYSE:WOLF), Inc., terminating an exclusive supply agreement and resolving a legal dispute that began in July 2023. The North Carolina-based firm agreed to pay Wolfspeed $4.77 million, which encompasses the cost of inventory, legal fees, and interest.

The settlement, reached on Monday, includes an initial payment of $500,000, followed by $1.83 million by February 28, and the remaining $2.44 million by December 31, 2025. This agreement puts an end to the arbitration initiated by Wolfspeed over alleged contract breaches by Charles & Colvard.

Originally, the two companies entered into the supply contract on December 12, 2014, with Charles & Colvard committing to purchase all required silicon carbide (SiC) materials from Wolfspeed. The agreement, which was extended multiple times, was set to expire on June 29, 2025, with Charles & Colvard having a purchase commitment of approximately $52.95 million.

Wolfspeed accused Charles & Colvard of contract violations, leading to arbitration in July 2023. An interim award was decided in Wolfspeed's favor on December 5, 2024, leading to the recent settlement.

The termination of this agreement allows Charles & Colvard to seek other suppliers for SiC materials, which are essential for their jewelry manufacturing. The details of the settlement will be disclosed, with confidential terms redacted, in the company's upcoming quarterly report for the period ending March 31, 2025.

The resolution of this dispute closes a chapter for Charles & Colvard, enabling the company to move forward without the encumbrance of the arbitration. This news is based on a press release statement filed with the SEC.

In other recent news, Charles & Colvard, the jewelry specialist, has experienced notable shifts within its organizational structure and financial reporting. The company recently announced changes to its board of directors following the resignation of Benedetta Casamento. The company's 8-K filing with the Securities and Exchange Commission (SEC) revealed that this departure did not stem from disagreements over operations, policies, or practices. Following this, the board adjusted its bylaws, reducing the range of the number of directors from five to ten to now between four and nine. These developments could potentially influence the company's strategy and performance.

In terms of financial updates, Charles & Colvard has reported a delay in its quarterly financial results for the period ending September 30, 2024. The company filed a Notification of Late Filing with the SEC, indicating a delay in the submission of its Quarterly Report on Form 10-Q. The specifics surrounding this delay and the estimated financial results were not disclosed. These are recent developments and investors are advised to monitor these situations closely.

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