CTHR Charles & Colvard Ltd - 8-K/A

Item 1.01

Entry into a Material Definitive Agreement.

As previously disclosed on June 24, 2025,
the Company entered into a Convertible Secured Note Purchase Agreement (the “Note Purchase Agreement”) with Ethara Capital
LLC (the “Holder”), a Delaware limited liability company. In connection with the Note Purchase Agreement, the Company issued
a convertible secured note (the “Note”) to the Holder for an aggregate total purchase price of $2.0 million, dated July 3,
2025 and due and payable on October 3, 2025.

As previously disclosed on September 5, 2025,
the Company entered into a Note Conversion Agreement (the “Note Conversion Agreement”), dated August 29, 2025, with the
Holder whereby the parties agreed to convert $200,000.00 in principal and accrued but unpaid interest on the Note into 1,353,180 shares
of the Company’s common stock at a conversion price of $0.1478 set forth in the Note (the “Disclosed Conversion”).

As previously disclosed on December 5, 2025,
the Company received, on November 25, 2025, a notice of default from the Holder asserting that an event of default by the Company
had occurred due to the Company’s failure to pay the accreted principal amount and the accrued and unpaid interest on the maturity
date of the Note (the “Event of Default”). The Company considered the validity of the Event of Default and held discussions
with the Holder. The Company’s Board of Directors reviewed the facts and circumstances related to the Disclosed Conversion
and the Event of Default, including that the Disclosed Conversion was attempted without obtaining the required approval of the Company’s
shareholders, and determined on February 26, 2026, that the Disclosed Conversion was invalid and as such, the correct and accurate
number of the Company’s authorized and outstanding shares is 3,118,273.