Management Presentation

February 2013

Forward-Looking Statements This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements expressing expectations regarding our future and projections relating to products, sales, revenues, and earnings are typical of such statements and are made under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations, and contentions and are not historical facts and typically are identified by use of terms such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “continue,” and similar words, although some forward-looking statements are expressed differently.

All forward-looking statements are subject to the risks and uncertainties inherent in predicting the future. You should be aware that although the forward-looking statements included herein represent management’s current judgment and expectations, our actual results may differ materially from those projected, stated, or implied in these forward-looking statements as a result of many factors including, but not limited to, our dependence on consumer acceptance and growth of sales of our products resulting from our strategic initiatives; dependence on a limited number of customers; our current wholesale customers’ potential perception of us as a competitor in the finished jewelry business; general economic and market conditions, including the current economic environment; dependence on Cree, Inc. as the current supplier of the raw material; intense competition in the worldwide jewelry industry; the financial condition of our major customers; risks of conducting business in foreign countries; the pricing of precious metals, which is beyond our control; the potential impact of seasonality on our business; our ability to protect our intellectual property; the risk of a failure of our information technology infrastructure to protect confidential information and prevent security breaches; and possible adverse effects of governmental regulation and oversight, in addition to the other risks and uncertainties described in our filings with the Securities and Exchange Commission, or the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and subsequent reports filed with the SEC. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur except as required by the federal securities laws, and you are urged to review and consider disclosures that we make in the reports that we file with the SEC that discuss other factors relevant to our business.

What is Moissanite?

First uncovered in a meteorite and impossibly rare on earth

One of the hardest gemstones known to man

10% more brilliant with 2½ times more fire than diamonds

Provides the luxury experience of a diamond at about 1/10 the cost

Will never lose its brilliance, which is covered by Charles & Colvard’s Limited Lifetime Warranty

Recognized by the jewelry industry as the best alternative to diamond

‘The World’s Most Brilliant Gem™’

Who Is Charles & Colvard?

High-margin product with exclusivity

Sales growth accelerating

Wholesale revenue at a three-fold run rate

Direct-to-consumer initiatives targeting increasing revenue and margin dollars

Positive operating cash flow

$1.5 million in 2010

$3.5 million in 2011

$2.1 million in 2012 through third quarter

Substantial owned inventory levels Opportunity to monetize $34 million cost at over $65 million wholesale

No long-term debt

Funding business from operation’s cash flows

The Exclusive Producer of Moissanite since 1998…

Seasoned Management on board Over a century of experience join the Company… Management

November 2009 – Randy McCullough, 40-year jewelry veteran, CEO

October 2009 – Tom Pautz, 29-year jewelry veteran, VP of Sales & Marketing

June 2009 – Tim Krist, 23-year accounting/finance veteran, CFO

Directors

July 2009 – Chuck Lein, 29-year jewelry veteran and retired President & COO of Stuller, Inc.

November 2009 – Marvin Beasley, 45-year jewelry veteran and retired CEO of Helzberg Diamonds, a Berkshire Hathaway Co.

February 2011 – Steven Larkin, e-commerce expert and Zale jewelry veteran, currently Senior Vice President of Golfsmith International Holdings

May 2011 – David Barr, retail and franchising expert, jewelry veteran, currently owner and consultant for small- and mid-cap companies

June 2012 – Anne Butler, direct sales veteran previously with Avon Products, Mary Kay Cosmetics, PartyLite Gifts, and Blythe

2010 Revitalized Business Model Positioned for profitable growth…

Revived existing and developed new wholesale relationships in the industry

Increased sales and profitability while reducing operating expenses

Built on cash balances

Set up infrastructure for manufacturing finished jewelry

Formulated long-term growth strategies

2011 Expanded Business Model Launched new growth strategies…

Established a direct-to-consumer e-commerce site, Moissanite.com

Formulated a direct-to-consumer home party business, Lulu AvenueTM

Installed multiple systems to support the above initiatives

Recruited senior management to drive new initiatives

Craig Laing – 17-year e-commerce veteran

Ann Raulston – 21-year home-party veteran

New Business Creation

Wholesale

Distributors Direct Distribution Moissanite.com Lulu Avenue

Consumers

Retailers E-tailers Home Shopping TV Retail Channels E-Shopping Style Advisors

Strong Cash and Revenue Trends

$7.4

$8.7

$10.5

$12.0

$8.3

$12.7

$16.0

$21.4*

FY 2009 FY 2010 FY 2011 Q3 2012

Cash and Investments Revenue

*Previous 12 months

Mill

ion

s

#1 Seller on

Charles Winston hosts all Moissanite Fire shows

Moissanite Sales for 8-hour period surpassed $1,000,000 !

Charles Winston shows exceeded sales goals 100% of the time.

Moissanite show hours have increased monthly!

Jewelry Television JTV runs three Moissanite campaigns

Moissanite Elite® in karat gold

Moissanite Fire® in silver

Moissanite Loose Jewels

The largest retailer of loose gemstones and one of the top 4 ‘Shop at Home Networks’

E-tailers posting significant increases in 2012

Leverages business model

Increases brand awareness

E-commerce Provides Sales Growth

Exclusive designer brands and styles from best-in-class jewelry manufacturers

Full-scale brand and functional redesign went live Fall 2012

1 Million Visits in 2012

#1 Google ranking for moissanite

Monthly Visits: 60,000+

Over 2,000 unique items available

Visitors: 61% new / 39% returning

65,000+ email & social media contacts

E-commerce Promotes Market Awareness

brings the designer in your home

Positions Charles & Colvard with incremental growth opportunity

2011 estimated U.S. direct sales = $30 billion*

Exponential growth opportunities driven by number of Style Advisors

Experienced experts driving the business:

Ann Raulston had over 20,000 sellers at Gold Canyon

Anne Butler had over 60,000 sellers at Party Lite

Provides women an exclusive direct social selling opportunity featuring Moissanite in designs by JudeFrances…

*Source: Direct Selling Association (dsa.org)

Provides Lulu Avenue with exclusive lifestyle brand

New opportunities to attract stylists

Extraordinary designs that help raise awareness

Capitalizes on designer jewelry growth trends

brings the designer in your home

JudeFrances designer fashion jewelry appeals to every woman

Improve Lulu’s marketing capabilities

Stellar PR…

Editors love JudeFrances!!

JudeFrances, known for classic, sexy, elegant works of artistry, now designs for Lulu Avenue

Charles & Colvard Created Moissanite® as you’ve never seen it before…

up to four color grades brighter and whiter!

Certified, laser-inscribed, and guaranteed from the source.

Disruptive Market Innovation

Disruptive Market Innovation

Brighter

Whiter

Brilliant

Fiery

Durable

Affordable

0%

20%

40%

60%

80%

100%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

MOISSANITE $599

DIAMOND $5,999

Recognized by the American Gem Society as the best alternative to Diamond

Comparison on 1 carat solitaire

Financial State of the Business

Strong Balance Sheet As of September 30, 2012:

$11.9 million in cash and investments

$33.7 million in inventory at cost

Significant opportunity to build our cash position as we sell down current inventory

Current ratio of 15:1

No long-term debt The business continues to be funded from cash flows from operations

Shareholders’ equity of $52.3 million

2012 Positive Revenue Trends

40%

69% 76%

62%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Q1 2012 Q2 2012 Q3 2012 YTD 2012

Year over Year Revenue Increases

(CTHR) Stock Information

Activity Recent price of $3.69

(as of December 3, 2012) is a 7X multiple below all-time high of $25.99 (as adjusted) in December 2005

Significant insider buying

Over 70 insider buys since November 2009, no insider sales

Approximately 19,650,000 shares outstanding

Insider ownership ≈ 11%

Institutional ownership ≈ 31%

Management Presentation

February 2013