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Exhibit 99.3
FORM OF LETTER TO SHAREHOLDERS
CHARLES & COLVARD, LTD.
3800 Gateway Boulevard
Suite 310
Morrisville, N.C. 27560
, 2001
Dear Stockholder:
Enclosed are the prospectus and other materials relating to the Rights
Offering by Charles & Colvard, Ltd. ("Charles & Colvard"). Please carefully
review the prospectus, which describes how you can participate in the Rights
Offering. You will be able to exercise your Subscription Rights to purchase
additional shares of Charles & Colvard Common Stock only during a limited
period. You will find answers to some frequently asked questions about the
Rights Offering beginning on page of the prospectus. You should also refer
to the detailed Instructions for Use of Charles & Colvard, Ltd. Subscription
Certificates, which is included with this letter. The exercise of Subscription
Rights will be irrevocable.
SUMMARY OF THE TERMS OF THE OFFERING
. You will receive a non-transferable Subscription Right to purchase one
share of Common Stock for each share of Charles & Colvard Common Stock
you owned of record on January 12, 2001. For example, if you own 100
shares of Common Stock, you will receive Subscription Rights to purchase
an additional 100 shares of Common Stock. This right is referred to as
the Basic Subscription Privilege.
. If you fully exercise the Basic Subscription Privilege issued to you, you
may subscribe for additional shares through the Over-Subscription
Privilege. If Subscription Rights holders subscribe to purchase more than
a total of shares, shares purchased through the Over-
Subscription Privilege will be allocated among shareholders who over-
subscribe in proportion to the number of shares purchased by those over-
subscribing shareholders through the basic subscription privilege, as
more fully described in the prospectus.
. The Rights Offering expires at 5:00 p.m., Eastern Standard Time, on
February , 2001 unless extended. If you do not exercise your
Subscription Rights before that time, they will expire and will have no
monetary value.
If your shares are held in your name, a Subscription Certificate is
enclosed. If your shares are held in the name of your bank or broker, you must
contact your bank or broker if you wish to participate in this offering.
If you do not exercise your Subscription Rights, your ownership in Charles &
Colvard may be diluted. Please see page 6 of the prospectus for a discussion of
dilution and other risk factors.
If you have any questions concerning the Rights Offering, please feel free
to contact Mark Hahn, Chief Financial Officer, at (919) 468-0399.
Sincerely,
_____________________________________
Robert S. Thomas, Chief Executive
Officer
