Charles & Colvard, the Morrisville, N.C.–based manufacturer and marketer of moissanite and lab-grown diamonds, said in a 10-K filed April 3 that there is “substantial doubt” about its ability to continue as a going concern.
But the company noted that it believes its access to capital markets will carry it through.
In the filing, Charles & Colvard said it is facing many challenges, including a $14.4 million loss in fiscal 2024 and an agreement to pay $4 million to its main supplier Wolfspeed (formerly Cree) in an arbitration settlement.
“We have concluded that our existing cash and cash equivalents and availability of other resources combined will not be sufficient to meet our working capital and capital expenditure needs over the next 12 months,” the filing said.
Charles & Colvard said it is “evaluating our financing arrangements, implementing cost savings actions to reduce cash outflow, and evaluating the liquidation of certain inventories, if needed. However, there can be no assurance that these plans will be successful or that additional financing will be available on terms acceptable to the company.”
It added: “We believe that our ongoing access to capital markets, including but not limited to the issuance of equity securities or even potential debt securities, coupled with cash provided by operating activities in future periods beyond the next 12 months, will continue to provide us with the necessary liquidity to meet our long-term working capital and capital expenditure requirements.”
Top: Charles & Colvard’s store in Morrisville, N.C. (photo courtesy of Charles & Colvard)
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