Charles & Colvard, Ltd. (CTHR): History, Ownership, Mission, How It Works & Makes Money

When you look at Charles & Colvard, Ltd. (CTHR), the original pioneer of moissanite, are you looking at a specialty fine jewelry company making a smart pivot, or a firm facing serious financial headwinds? The company's unique position-offering both its flagship Forever One™ moissanite and Caydia® lab-grown diamonds-is defintely an advantage in the growing ethical, Made, not Mined™ gemstone market, but the numbers tell a story of pressure.

For the fiscal year ending June 30, 2024, Charles & Colvard, Ltd. reported net sales of just over $21,956,472, coupled with a significant net loss of $14,362,957, and this challenging trend is expected to continue through fiscal year 2025 with further anticipated net losses and sales decreases.

So, how does a company with a strong brand and a new strategic partnership with Ethara Capital to expand its lab-grown diamond supply navigate a market where it also faces a substantial doubt about its ability to continue as a going concern?

Charles & Colvard, Ltd. (CTHR) History

Charles & Colvard, Ltd.'s Founding Timeline

Charles & Colvard, Ltd. is the original pioneer of lab-created moissanite, a gemstone made from silicon carbide. The company's origin story is rooted in scientific innovation, specifically a licensing agreement with Cree, Inc. (now Wolfspeed) to commercialize the material for jewelry.

Year established

The company was founded in 1995 under the initial name C3 Inc..

Original location

The original headquarters were in North Carolina's Research Triangle Park (RTP) region, a hotbed for scientific research and development.

Founding team members

The company was founded by Charles Eric Hunter, who established C3 Inc. to bring the new gemstone to market. His brother, Jeff Hunter, ran the company until 2000.

Initial capital/funding

The company was a development stage enterprise from its inception in June 1995 through June 30, 1998, focusing its resources on research and development (R&D) of colorless moissanite jewels. A major early funding milestone was the company's initial public offering (IPO) on the NASDAQ on November 14, 1997.

Charles & Colvard, Ltd.'s Evolution Milestones

The company's path shows a clear pivot from an R&D-focused entity to a multi-channel fine jewelry retailer, constantly adapting to the lab-grown gemstone market. Here's the quick math on recent performance: the company reported net sales of $21,956,472 for the fiscal year ended June 30, 2024, a notable decrease from the prior year, reflecting market headwinds. You can dig deeper into the current financial health here: Breaking Down Charles & Colvard, Ltd. (CTHR) Financial Health: Key Insights for Investors.

Charles & Colvard, Ltd.'s Transformative Moments

The company's trajectory has been defined by three major shifts: the transition from a pure R&D play, the strategic product diversification, and the recent financial restructuring and strategic alliance.

Honestly, the initial challenge was simply commercializing moissanite, which is silicon carbide (SiC), a material originally developed for industrial use. The company had to prove the gem's viability and build consumer trust from scratch.

• The Moissanite Patent Cliff: The expiration of key moissanite patents forced a pivot from a supply-controlled monopoly to a competitive, brand-driven market. This led to the creation of the Forever One™ brand, focusing on premium quality to maintain pricing power.
• The Lab-Grown Diamond Entry: The September 2020 launch of the Caydia® lab-grown diamond brand was a critical move to hedge against competition in the moissanite space and tap into the faster-growing lab-grown diamond segment. This was defintely about market relevance.
• The Ethara Capital Partnership (2025): Following a difficult fiscal period-where the company recorded a net loss of $14,362,957-the strategic investment from Ethara Capital, a major Chemical Vapor Deposition (CVD) lab-grown diamond manufacturer, is a lifeline. This partnership immediately provides an expanded, vertically integrated supply chain for lab-grown diamonds, which is a clear opportunity to stabilize operations and drive future growth.

The delisting from Nasdaq in April 2025 was a clear signal of the operational and financial stress, but the Ethara deal in October 2025 shows a concrete, actionable step toward a new growth strategy centered on the lab-grown diamond market.

Charles & Colvard, Ltd. (CTHR) Ownership Structure

The ownership structure of Charles & Colvard, Ltd. is highly concentrated among public and individual investors, a common characteristic for a company trading over-the-counter (OTC), with institutional holdings being nearly negligible.

Charles & Colvard's Current Status

Charles & Colvard is a publicly traded company, but its status shifted significantly in 2025. The company was delisted from the Nasdaq Stock Market on April 25, 2025, due to non-compliance with filing requirements, specifically failing to timely file its quarterly reports (Form 10-Q) for the fiscal year 2025. It now trades on the OTC Expert Market, a segment of the over-the-counter (OTC) market, under the ticker symbol CTHR. This move generally reduces liquidity and transparency, which is a key risk for investors looking for a quick exit.

To be fair, the company is actively trying to stabilize operations, but its expected financial results for the quarter ended September 30, 2025, include decreased net sales and a net loss, consistent with weak results through the fiscal year ended June 30, 2025. For the quarter ended March 31, 2025 (Q3-FY2025), the company reported preliminary revenue of approximately $4.05 million. You can read more about the financial situation here: Breaking Down Charles & Colvard, Ltd. (CTHR) Financial Health: Key Insights for Investors

Charles & Colvard's Ownership Breakdown

The ownership profile is heavily skewed toward retail investors, which can lead to higher stock price volatility and less institutional oversight. Here's the approximate breakdown of the common stock ownership as of the most recent data available in 2025:

This structure means that the retail crowd's sentiment has an outsized impact on the stock price. Honestly, when over 90% of the stock is in retail hands, you defintely need to watch social media trends as much as the financial filings.

Charles & Colvard's Leadership

The company's strategy is steered by a lean executive team and a board that has recently seen changes, including the appointment of a new Chairman in 2025. This leadership is tasked with navigating the challenges of being an OTC-listed company while expanding their lab-grown diamond offerings.

• James Tu: Chairman of the Board (since July 2025). He is a Chartered Financial Analyst (CFA) and the Founder of Fusion Park LLC, bringing experience from numerous public and private technology companies.
• Don O'Connell: President and Chief Executive Officer (CEO). He has over 25 years of experience in jewelry manufacturing and supply chain, having previously served as the Chief Operating Officer.
• Clint J. Pete: Chief Financial Officer (CFO). He joined the company in 2016 and is responsible for steering the company's financial strategy, especially critical now given the going-concern risk warnings.
• Ruten Bhanderi: Director (since July 2025). He is the Vice Chairman of Bhanderi Lab Grown Diamonds Inc., a key partner for expanding the company's lab-grown diamond offerings.

The recent board appointments, especially James Tu and Ruten Bhanderi, signal a strategic pivot toward leveraging new partnerships and expertise in the lab-grown diamond space, a necessary move to stabilize operations and try to reverse the net loss trend.

Charles & Colvard, Ltd. (CTHR) Mission and Values

Charles & Colvard, Ltd. (CTHR) grounds its operations in a commitment to ethical sourcing and conscious fine jewelry, aiming to provide a conflict-free alternative to mined gemstones. This focus on values is critical, especially when the company is navigating a challenging financial landscape, reporting a net loss of over $14.36 million for the fiscal year ended June 30, 2024, the most recent filed data for context.

For a deeper look at the operational challenges underpinning these values, you can read Breaking Down Charles & Colvard, Ltd. (CTHR) Financial Health: Key Insights for Investors.

Given Company's Core Purpose

The company's core purpose moves past simple profit, focusing on the modern consumer's demand for transparency and ethical products. They position themselves as the original pioneer of lab-created moissanite, which is a key differentiator in the crowded fine jewelry market. They defintely believe in empowering their customers, too.

Official mission statement

Charles & Colvard's mission centers on delivering an experience that aligns with contemporary social and environmental values, moving away from the traditional diamond industry's historical issues. The goal is to make exquisite jewelry accessible and conscientious.

• Provide a more conscious and conflict-free fine jewelry experience for customers.
• Bring revolutionary gems and fine jewelry to market using exclusively above-ground gemstones.
• Dedicate the process to using 100% recycled precious metals.

Vision statement

While a formal, multi-decade vision statement is not public, the company's near-term strategic goals for fiscal year 2025 serve as a clear operational vision for stakeholders. This vision is focused on stabilization and expansion in the lab-grown market, especially following a year where net sales declined to $21,956,472.

• Stabilize operations and enhance operational efficiency.
• Expand product differentiation, specifically by growing the lab-grown diamond (LGD) offerings.
• Leverage online platforms and wholesale distribution channels to meet growing demand for LGD products.

Here's the quick math: the strategic push into lab-grown diamonds, like their Caydia® brand, is necessary to combat the $7.99 million year-over-year drop in net sales reported for the fiscal year ended June 30, 2024.

Given Company slogan/tagline

The company's primary tagline is a concise statement that captures their core value proposition and their technological advantage in the fine jewelry space, directly contrasting with traditional mining practices.

• Made, not Mined™

This simple phrase quickly translates the jargon of lab-grown gemstones into a clear ethical and environmental benefit for the consumer. It's a powerful, one-line summary of their entire business model.

Charles & Colvard, Ltd. (CTHR) How It Works

Charles & Colvard, Ltd. operates as a fine jewelry company that creates and sells 'Made, not Mined' gemstones-specifically moissanite and lab-grown diamonds-to both consumers and wholesale partners. The company makes money by controlling the branding and multi-channel distribution of these high-quality, ethically-positioned stones and finished jewelry, focusing on the value-conscious, socially-aware shopper.

Charles & Colvard, Ltd.'s Product/Service Portfolio

Charles & Colvard, Ltd.'s Operational Framework

The company's operational framework is focused on streamlining its supply chain and pivoting toward high-efficiency, multi-channel distribution to counter market headwinds. As of the fiscal year ended June 30, 2024, the company reported a net loss of $14,362,957 on net sales of $21,956,472, so cost control and sales channel expansion are defintely a priority. Here's the quick math: they are working to stabilize the business after a period of significant sales decline.

• Supply Chain Verticalization: A key move in October 2025 was partnering with Ethara Capital, whose affiliates operate over 3,000 Chemical Vapor Deposition (CVD) diamond-growing machines. This provides Charles & Colvard, Ltd. with a more vertically integrated, global supply chain for Caydia™ LGDs.
• Digital-First Distribution: Sales are driven by the Online Channels segment, which includes the company's own e-commerce sites, third-party marketplaces, and drop-ship programs. This segment is crucial for reaching the target consumer base.
• Operational Efficiency: Strategic measures for fiscal 2025 include a comprehensive audit of business processes, technology integration for automation, and supply chain consolidation to reduce costs and increase agility.
• Wholesale Expansion: The Charles & Colvard Direct B2B platform was expanded to allow approved partners to purchase loose LGDs, not just moissanite, opening up a new revenue stream with retailers. Exploring Charles & Colvard, Ltd. (CTHR) Investor Profile: Who's Buying and Why?

Charles & Colvard, Ltd.'s Strategic Advantages

The core advantage for Charles & Colvard, Ltd. is its history and brand equity in the ethical, lab-grown gemstone space, plus its recent, aggressive moves into new distribution channels. They were the original pioneer of moissanite, which gives them a long-standing position of authority in the alternative gemstone market. This is a big deal for consumer trust.

• Brand Heritage and Differentiation: The company is the original creator of lab-grown moissanite, which offers a unique, highly brilliant gemstone that is distinct from both mined and lab-grown diamonds. They use the 'Made, not Mined™' positioning to appeal to Millennials and Gen Z who prioritize ethical and sustainable purchases.
• New Social Commerce Reach: A November 2025 partnership with the social commerce network VideoShops significantly expands distribution. This deal leverages a network of over 50,000 influential sellers, allowing customers and creators to launch storefronts and earn commissions, which is a low-cost, high-reach way to move inventory.
• Vertically Integrated LGD Supply: The Ethara Capital partnership gives them a more stable, cost-effective, and scalable supply of Caydia™ LGDs. This is critical in a competitive market where LGD prices are falling and supply control is key to maintaining margin.
• Multi-Channel Flexibility: Operating through both Online Channels (direct-to-consumer) and Traditional (wholesale) segments allows them to manage inventory and pricing across different customer types, a necessary move given the challenging working capital of $4,690,000 as of June 30, 2024.

Charles & Colvard, Ltd. (CTHR) How It Makes Money

Charles & Colvard, Ltd. primarily makes money by designing, manufacturing, and selling fine jewelry featuring lab-created gemstones, specifically its proprietary moissanite and premium lab-grown diamonds, through a direct-to-consumer digital strategy.

The core of their business is selling finished jewelry and loose gemstones through two distinct channels: a high-margin, direct-to-consumer (DTC) online model and a lower-margin, traditional wholesale model.

Charles & Colvard's Revenue Breakdown

As of the most recent reporting period in fiscal year 2025, the company's revenue is heavily concentrated in its direct-to-consumer segment, reflecting a clear strategic pivot away from traditional wholesale channels.

Here's the quick math on the segment split, using the latest available structural breakdown from Q3 FY2024, which aligns with the company's stated strategic shift into fiscal 2025:

The Online Channels segment includes sales from the company's e-commerce sites like charlesandcolvard.com, third-party marketplaces, and drop-ship retail. This is where the company captures the highest margin, so it's defintely the focus.

Traditional sales, which cover wholesale and brick-and-mortar customers, are intentionally being de-emphasized to build a more robust, higher-margin direct-to-consumer business, which is why that percentage is shrinking.

Business Economics

The economics of Charles & Colvard, Ltd. are fundamentally tied to the cost of lab-grown gemstone production, the efficiency of their digital marketing spend, and the consumer's willingness to pay a premium for branded lab-created jewelry over unbranded alternatives.

• Gross Margin Pressure: The gross margin for Q3 FY2024 was 23%, a significant drop from 32% in the year-ago quarter, due in large part to rising commodity prices and a strategy to liquidate some obsolete inventory. This is a serious headwind.
• Pricing Strategy: The company employs a premium pricing strategy for its flagship brands, such as Forever One moissanite and Caydia lab-grown diamonds, positioning them as high-quality, ethically-sourced alternatives to mined diamonds. The price point is lower than mined diamonds but premium within the lab-grown space.
• Cost Control: In response to weak consumer confidence and pricing pressures in the lab-grown diamond market, the company has been executing aggressive cost reductions in fiscal 2025, including headcount and executive salary cuts, plus reevaluating suppliers.
• Product Mix: Finished jewelry sales are the primary driver, with loose jewel sales making up a much smaller portion of total revenue. For example, in Q3 FY2024, finished jewelry net sales were \$4.9 million, compared to \$400,000 for loose jewels.

The shift to Online Channels is a smart move because it cuts out the middleman, but the ongoing pricing pressure on lab-grown diamonds still hits the top line.

Charles & Colvard's Financial Performance

The company's financial health in fiscal year 2025 is characterized by declining revenue and continued net losses, reflecting broader market challenges and internal restructuring efforts. Exploring Charles & Colvard, Ltd. (CTHR) Investor Profile: Who's Buying and Why?

For the last twelve months (LTM) ended March 30, 2025, the net sales were approximately \$15.7 million, representing a year-over-year revenue decline of -33.5%. The trend is clear: sales are shrinking in a tough market.

• Quarterly Revenue: Net sales for the third quarter of fiscal 2025 were \$4.05 million, a decrease of 23.04% compared to the same period a year prior.
• Net Loss: The net loss for the most recent reported quarter (Q3 2025) was -\$1.97 million. For the full fiscal year 2025, the company anticipates reporting a net loss.
• EBITDA: The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is negative, sitting at -\$9.69 million, with a corresponding EBITDA margin of -56.60%.
• Liquidity Warning: The company expects to disclose factors that raise substantial doubt about its ability to continue as a going concern, alongside continued material weaknesses in internal control over financial reporting.

The management team is fighting for stabilization, but the numbers show they are still deep in the red. The focus now is less about growth and more about operational efficiency and survival in a highly competitive lab-grown market.

Charles & Colvard, Ltd. (CTHR) Market Position & Future Outlook

Charles & Colvard, Ltd. is at a critical juncture in late 2025, attempting a strategic pivot to stabilize its core business and capture a larger slice of the growing lab-grown diamond market. Despite pioneering moissanite, the company's financial health is under pressure, evidenced by an expected net loss and decreased net sales for the full fiscal year 2025, following a net loss of over $14.3 million in the prior fiscal year.

Competitive Landscape

In the highly fragmented, yet rapidly expanding, lab-grown gemstone and fine jewelry market, Charles & Colvard competes on a niche value proposition against both massive traditional retailers and digitally native, ethically-focused brands. The recent closure of De Beers' Lightbox brand in May 2025 is a significant market event that creates a vacuum, but the competitive pressure from larger, more established players remains intense.

Opportunities & Challenges

The company's strategic move to partner with Ethara Capital, an affiliate of Bhanderi Lab Grown Diamonds, is a clear action to shift focus and secure a more vertical supply chain for its Caydia® lab-grown diamond line. But, honestly, the near-term risks are substantial and cannot be ignored.

Industry Position

Charles & Colvard holds a niche, yet defensible, position as the original moissanite (silicon carbide) innovator, a gem known for its superior fire and brilliance compared to both mined and lab-grown diamonds. They are defintely a small-cap player, with a market capitalization around $1.1 million as of late 2025, which puts them far behind multi-billion dollar retailers like Signet Jewelers.

• Digital Focus: The Online Channels segment remains the core engine, representing the majority of sales, making the VideoShops partnership crucial for customer acquisition.
• Product Differentiation: The company's unique dual-gemstone strategy-premium moissanite (Forever One™) and lab-grown diamonds (Caydia®)-allows them to target different consumer value points.
• Financial Headwinds: Net sales for the fiscal year ended June 30, 2024, were only $21,956,472, reflecting the challenge of competing against larger players in a challenging economic environment.

To be fair, the company's future trajectory hinges on whether its cost-cutting measures and the new vertical LGD supply chain can translate into profitability before liquidity issues become insurmountable. You can dive deeper into the ownership structure and institutional interest by Exploring Charles & Colvard, Ltd. (CTHR) Investor Profile: Who's Buying and Why?