Charles & Colvard Announces Introduction of Moissanite Jewelry at 114 Finlay Enterprises Jewelry Departments.

MORRISVILLE, N.C. -- Charles & Colvard, (NASDAQ:CTHR) the sole source of moissanite - a created jewel available for use in fine jewelry - today announced, along with its manufacturing customer K&G Creations, distribution of moissanite jewelry into 114 Finlay Enterprises leased department store jewelry counters.

Business Expansion Continuing

Bob Thomas, President and Chief Executive Officer, said, "I am pleased to announce an expansion of our relationship with Finlay Enterprises. Through our manufacturing partner, K&G Creations, moissanite jewelry is now in the jewelry counters at 31 department store doors whose jewelry departments are leased to Finlay Enterprises. Distribution in an additional 83 doors are being planned for March/April 2005 in Finlay controlled fine jewelry departments. Finlay operates leased department store jewelry locations in chains such as Robinson-May, Lord & Taylor, Famous-Barr, Marshall Fields, Rich's-Macy's, Bon-Macy's and Carson's-Boston Stores."

In November 2004 we announced that our customer K&G Creations, was conducting eight trunk shows in Finlay locations, as a result of this positive test a series of more than 200 trunk show events will occur during the first nine months of 2005.

Bob Thomas concludes, "We are pleased to announce this expanded distribution for our moissanite jewel, and we look forward to supporting our customer, K&G Creations and Finlay, as they add a beautiful and appealing assortment of moissanite jewelry in their fine jewelry locations across America. This is another important development in our efforts to build the moissanite category of fine jewelry and will certainly help to build awareness and demand for our jewel."

Leslie Philip, the EVP & Chief Merchandising Officer of Finlay Enterprises and Neil Koppel, a principle of K&G stated, "It is wonderful to see moissanite be embraced by Finlay's wide range of customers".

Charles & Colvard, based in the Research Triangle Park area of North Carolina, is the sole source of moissanite, a created jewel used in fine jewelry. Moissanite is near colorless, with more fire, brilliance and luster than a fine diamond, but retails for only a fraction of the cost. For more information, please access www.moissanite.com.

This press release may contain forward-looking statements. Such forward-looking statements are subject to a number of material risks, uncertainties and contingencies that could cause actual results to differ materially from those set forth in the forward-looking statements. Those risks and uncertainties include but are not limited to the Company's ability to manage growth effectively, dependence on Cree Inc. as the current supplier of the substantial majority of the raw material and risks inherent in developing a material second source of supply through Norstel AB; the cost of developing distribution channels, dependence on a limited number of distributors such as K&G Creations and Stuller Settings, Inc., limited operating history, dependence on continued growth and consumer acceptance of the Company's products, and other risks and uncertainties set forth in the Company's 10-K for the year ended December 31, 2003 and other filings with the Securities and Exchange Commission.