Charles & Colvard Reports on Expanded Testing of Moissanite Jewelry at Multi-Location Retailers; Sell-Out at First Two Airings on Eastern Home Shopping Network in Taiwan.

Business Editors/Retail Writers

RALEIGH, N.C.--(BUSINESS WIRE)--Aug. 27, 2003

Charles & Colvard, Ltd. (Nasdaq:CTHR), the sole source of moissanite -- a created jewel available for use in fine jewelry, reported on the expansion of test programs being conducted for moissanite jewelry in the third and fourth quarters of the year. The Company reported that moissanite jewelry will be tested by 14 different regional jewelry retailers at 62 of their total 269 doors.

Bob Thomas, President and Chief Executive Officer of Charles & Colvard stated, "With the help of our manufacturing partners and supported by our consumer and trade oriented advertising campaign and extensive exposure in print and broadcast media, moissanite jewelry has become a beautiful and affordable addition to the smart jeweler's showcase. As discussed during our last conference call, which is posted on our Web site, ULTRA Stores, Kings Jewelry and Harris Jewelers, are three of the jewelry chains participating in these tests. The potential for placement of our jewel in up to 269 doors is a very promising prospect."

Mr. Thomas continued, "We are nothing short of thrilled by the overwhelming success achieved during moissanite's first two appearances on the Eastern Home Shopping Network in Taiwan. According to our customer, jewelry manufacturer Joalan Designs, Inc., sales for the first two-hour long test programs far exceeded the expectations of the network. In both shows, which aired at 11:00 p.m. on July 14th and at 11:45 p.m. on August 2nd, the featured styles sold out and generated retail sales of $136,000 and $281,000, respectively. Based upon this performance, a third full-hour show has been booked for a prime time slot, 8:00 p.m. on August 30th. Discussions are underway to schedule additional moissanite shows on the station."

Mr. Thomas concluded, "We also have good news to report from one of our significant distribution partners, Stuller Inc., which has launched a new line of finished moissanite jewelry called 'Jewels of Fire.' Stuller will begin marketing this new collection later in the third quarter, and it should be in stores for the holiday shopping season."

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. for SiC crystals, 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, the risks and uncertainties of litigation including the substantial management time and attention required and substantial expenses incurred regardless of its outcome, and other risks and uncertainties set forth in the Company's 10-K for the year ended December 31, 2002 and other filings with the Securities and Exchange Commission.