Material Event (Form 8-K)

On February 19, 2026, the disinterested members of the Board of Directors (the "Board") of Charles & Colvard, Ltd. (the "Company") approved the reimbursement of reasonable and necessary expenses (including legal fees, solicitation costs and printing expenses) in the aggregate amount of $406,188.72 incurred by Riverstyx Fund, LP, a shareholder of the Company and fund affiliated with Benjamin Franklin IV, a member of the Board, and Duc Pham, a member of the Board, in connection with the previously disclosed proxy solicitation relating to the Company's 2025 Annual Meeting of Shareholders (the "Reimbursement"). The interested members of the Board recused themselves from all deliberations regarding approval of the Reimbursement and did not participate in the Board's decision.

In approving the Reimbursement, the Board considered a number of factors, including but not limited to the following: the Company and all of its shareholders have shared in the benefits created by Riverstyx Fund, LP's and Duc Pham's actions to reconstitute the Board and improve the Company's governance; shareholders representing a majority of the voting power of the Company had voted in favor of Riverstyx Fund, LP's and Duc Pham's nominees to the Board prior to the end of its proxy solicitation; it is a common practice to reimburse a shareholder's expenses in connection with the settlement of a proxy contest; and, to conserve the Company's cash position, the Reimbursement was approved contingent upon, and deferred until, such time that the Company is in a stronger financial position.