Charles & Colvard Announces Trunk shows at Finlay Jewelry Departments and at National Jewelry Chain.

MORRISVILLE, N.C. -- Charles & Colvard, (NASDAQ:CTHR) the sole source of moissanite - a created jewel available for use in fine jewelry - today announced additional distribution tests in two significant jewelry chains.

Business Expansion Continuing

Bob Thomas, President and Chief Executive Officer, said, "I am pleased to announce a significant development with our relationship with Finlay Enterprises. Trunk show tests of moissanite jewelry will be held in the next few weeks in eight stores whose jewelry departments are leased to Finlay Enterprises. In June 2004 we announced that our customer K & G Creations, had entered into an agreement with Finlay Enterprises, to provide finished moissanite jewelry to Finlay as the fulfillment entity for the independent web retailer, Smartbargins.com. Finlay, with jewelry revenue of almost $1 billion in 2003, operates leased department store jewelry locations in chains such as Robinson-May, Lord & Taylor and Marshall Fields. We are encouraged by this expanded relationship with Finlay"

Bob Thomas continues, "In addition to the Finlay opportunity we have secured first quarter 2005 trunk show tests in six stores of a national 200-300 store fine jewelry chain".

Bob Thomas concludes, "I am gratified to see additional tests occurring in jewelry outlets with a significant number of stores. We will work diligently to generate positive results from these new tests."

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 reliance on Cree, Inc. as the sole supplier of the raw materials; the cost of developing distribution channels; difficulties obtaining silicon carbide crystals from the sole supplier in desired qualities, sizes and volumes; and other risks and uncertainties set forth in the Company's 10-K for the year ended December 31, 2003, 10-Q and other filings with the Securities and Exchange Commission.