In a recent development, Charles & Colvard (NASDAQ:CTHR) Ltd. has announced significant salary reductions for its top executives and a complete cessation of director fees, as disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission. The move comes as the company grapples with the economic impact of rising gold prices, inflated costs for lab-grown diamonds and moissanite, and a challenging retail environment.
Effective June 24, 2024, the company's President and Chief Executive Officer, Don O'Connell, and Chief Financial Officer, Clint J. Pete, have agreed to a 10% cut in their base salaries. This decision was made on Monday, with the stipulation that the salary reductions will remain in place until the Board of Directors decides otherwise. Both executives will not receive back pay for the duration of their reduced salaries.
Additionally, the company's Board of Directors approved a 100% reduction in their fees starting with the fiscal quarter ending June 30, 2024. This measure is also set to continue until the Board deems a change necessary. Similar to the executives, directors will not be entitled to back pay for the time their fees are suspended.
In other recent news, Charles & Colvard reported a 21% decrease in revenue for the third quarter of fiscal year 2024, with net sales totaling $5.3 million. Despite the drop, the company's net loss improved, registering at $3.6 million compared to the previous year's $8.4 million loss. Additionally, the company announced a reverse stock split of its common stock at a ratio of one-for-ten, reducing the number of outstanding shares from approximately 30.3 million to about 3 million, following shareholder approval at a special meeting.
In compliance news, Charles & Colvard has successfully regained compliance with Nasdaq's minimum bid price requirement for continued listing, addressing the compliance issue which Nasdaq now considers closed. These developments are part of the company's recent activities, including the launch of For Everbright, a new gem brand, and a wholesale portal as part of strategic initiatives.
Despite facing revenue challenges, Charles & Colvard remains optimistic about its future growth prospects, focusing on direct-to-consumer sales, launching new brands and campaigns, and optimizing its inventory management strategies. The company ended the quarter with $9.2 million in cash and a $5 million cash secured credit facility. These are the recent developments in the company's operations and financial status.
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