UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported) November 24, 2009
Charles
& Colvard, Ltd.
(Exact
name of registrant as specified in its charter)
|
North
Carolina
|
000-23329
|
56-1928817
|
|
(State
or other jurisdiction of
incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
300
Perimeter Park Drive, Suite A
|
|
|
Morrisville,
North Carolina
|
27560
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(919)
468-0399
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
|
Item
8.01
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Other
Events.
|
On
November 24, 2009, Charles & Colvard, Ltd. (the “Company”) posted a letter
on its website to its stakeholders from Randy N. McCullough, the Company’s
President and Chief Executive Officer. A copy of the letter is attached as
Exhibit 99.1 to this report and incorporated by reference.
Item
9.01 Financial
Statements and Exhibits.
(d) Exhibits.
|
Exhibit
No.
|
Description
of Document
|
|
99.1
|
Letter
to Stakeholders from Randy N. McCullough, dated November 24,
2009
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| Charles & Colvard, Ltd. | |||
|
Date:
November 24, 2009
|
By:
|
/s/ Timothy L. Krist | |
| Timothy L. Krist | |||
| Chief Financial Officer | |||
|
|
EXHIBIT
INDEX
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|
Exhibit
No.
|
Description
of Document
|
|
99.1
|
Letter
to Stakeholders from Randy N. McCullough, dated November 24,
2009
|
Exhibit
99.1
November
24, 2009
Dear
Valued Stakeholders,
After
completing my first two weeks with Charles & Colvard, I feel compelled to
communicate my early observations on our great company. First, let me take this
opportunity to thank each and every one of you for supporting us and providing
the catalyst that will help take our company to the next level. I am grateful
for the many letters and phone messages I have received welcoming me and
pledging support. My focus from the outset has been to organize our people to
begin the implementation of several key initiatives that are designed to
position Charles & Colvard Created Moissanite®, our beautiful jewel, in key
retail outlets around the globe. These efforts have prevented me from responding
to you as quickly as I would have liked. Because your observations regarding
Charles & Colvard have been generally consistent, I felt that sharing my
observations in this letter would be the most efficient method to allow me to
respond to all of you and continue pressing forward with these key
initiatives.
Recent
strides made by the company prior to my arrival, including the revenue
improvement in the third quarter over the second quarter of 2009, execution of
the Stuller agreement, curtailment of operating costs, and filling two key
management positions with very competent individuals, Tim Krist as our Chief
Financial Officer and Tom Pautz as our Vice President of Sales and Marketing,
have made it possible for me to focus my attention on improving the top line
sales while also keeping an eye on the bottom line. I would once again say a
special ‘Thank You’ to George Cattermole, Chairman of the Board of Charles &
Colvard, for overseeing these significant improvements and laying the groundwork
for a smooth transition as we build on these accomplishments.
I spent
my first week getting acclimated with the company's operations, attending a
board meeting, holding a shareholders' conference call to report our third
quarter earnings, and reaching out to several distributors who fit our strategy
going forward of exploring the formation of exclusive distributorships with key
partners having significant jewelry manufacturing capabilities that would be
assigned to specific retailers. By controlling distribution overlap to specific
retailers, we are targeting to be able to provide better management of inventory
and turn.
I spent
my second week in New York meeting not only with current distributors, but with
new potential significant jewelry manufacturers to discuss the possibility of
forming exclusive alliances with their large retail customers. While there are
no assurances of future sales, I am quite optimistic about the possibilities
presented by our exciting moissanite jewel. I am convinced that the affordable
luxury experience derived from wearing Charles & Colvard Created Moissanite®
is a compelling offer for women around the world and should motivate retailers
to display and promote our product. To support this effort, we are working to
provide virtual training via the Internet for sales associates at all moissanite
retailers to address the difficult challenge of employee turnover and help
accelerate their sales efforts. In addition, we are exploring several marketing
initiatives to reposition our moissanite jewel in today’s ever changing
marketplace.
As you
can see, we have hit the ground running and this is only the beginning. Once our
partners are in place servicing major retailers, I envision the possibility of
Charles & Colvard developing its own designer line of branded jewelry to
market to non-traditional sales channels. This will be a latter stage initiative
that we believe will help prepare us for 2015 and beyond. We will be
opportunistic in our approach so as not to overextend our
resources.
In
closing, I want to leave you with the assurance that our management team is very
focused and motivated to get the job done as we begin our 2010 planning session
over the next three weeks. I will do my very best to keep you in the loop as we
move ahead on our many initiatives and look forward to sharing our
successes.
Sincerely
yours,
/s/ Randy
N. McCullough
Randy N.
McCullough
President
& Chief Executive Officer
This
letter contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, or the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or
the Exchange Act. Statements expressing expectations regarding our future and
projections relating to products, sales, revenues, and earnings are typical of
such statements and are made under the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include, but are not limited to,
statements about our plans, objectives, representations, and contentions and are
not historical facts and typically are identified by use of terms such as “may,”
“will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,”
“estimate,” “predict,” “continue,” and similar words, although some
forward-looking statements are expressed differently.
All
forward-looking statements are subject to the risks and uncertainties inherent
in predicting the future. You should be aware that although the forward-looking
statements included herein represent management’s current judgment and
expectations, our actual results may differ materially from those projected,
stated, or implied in these forward-looking statements as a result of many
factors including, but not limited to, the recent downturn in the worldwide
economy and its ongoing impact on our business and the business of our customers
and suppliers, any continued trends in the general economy that would adversely
affect consumer spending, a further decline in our sales, dependence on consumer
acceptance of our products, dependence on Cree, Inc. as the current supplier of
most of the raw material, ability to develop a material second source of supply,
dependence on a limited number of customers, risks of conducting operations in
foreign countries, dependence on third parties for the sales and marketing of
our products to end consumers, continued listing of our common stock on the
NASDAQ Global Select Market, and the impact of significant changes in our
management on our ability to execute our business strategy in the near-term, in
addition to the other risks and uncertainties described in more detail in our
filings with the Securities and Exchange Commission, or the SEC, including our
Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and
subsequent reports filed with the SEC. Forward-looking statements speak only as
of the date they are made. We undertake no obligation to update or revise such
statements to reflect new circumstances or unanticipated events as they occur
except as required by the federal securities laws, 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.