Charles & Colvard (CTHR) 10-Q 7 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 04, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	CHARLES & COLVARD LTD
Entity Central Index Key	1,015,155
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		21,111,585
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 5,254,242	$ 4,007,341
Accounts receivable, net	4,462,286	5,510,253
Inventory, net	13,404,996	13,320,639
Prepaid expenses and other assets	905,306	602,850
Total current assets	24,026,830	23,441,083
Long-term assets:
Inventory, net	21,124,138	25,617,990
Property and equipment, net	1,663,608	1,859,355
Intangible assets, net	172,895	216,947
Other assets	252,805	291,022
Total long-term assets	23,213,446	27,985,314
TOTAL ASSETS	47,240,276	51,426,397
Current liabilities:
Accounts payable	3,314,133	3,286,086
Accrued cooperative advertising	36,000	220,000
Accrued expenses and other liabilities	1,475,571	684,577
Total current liabilities	4,825,704	4,190,663
Long-term liabilities:
Accrued expenses and other liabilities	763,260	809,879
Accrued income taxes	414,018	407,682
Total long-term liabilities	1,177,278	1,217,561
Total liabilities	$ 6,002,982	$ 5,408,224
Commitments and contingencies
Shareholders' equity:
Common stock, no par value	$ 54,240,247	$ 53,949,001
Additional paid-in capital - stock-based compensation	12,283,365	11,628,503
Accumulated deficit	(25,286,318)	(19,559,331)
Total shareholders' equity	41,237,294	46,018,173
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 47,240,276	$ 51,426,397

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Shareholders' equity
Common stock, par value (in dollars per share)	$ 0	$ 0

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) [Abstract]
Net sales	$ 7,476,872	$ 7,841,647	$ 15,853,936	$ 13,909,200
Costs and expenses:
Cost of goods sold	6,461,537	5,324,981	11,305,440	8,988,023
Sales and marketing	3,517,870	2,171,614	6,491,234	4,366,225
General and administrative	1,533,948	2,376,466	3,768,161	3,752,681
Research and development	7,043	9,514	9,104	11,501
Loss on abandonment of assets	0	0	0	2,201
Total costs and expenses	11,520,398	9,882,575	21,573,939	17,120,631
Loss from operations	(4,043,526)	(2,040,928)	(5,720,003)	(3,211,431)
Other income (expense):
Interest income	0	20	11	49
Interest expense	(767)	(188)	(784)	(318)
Gain on sale of long-term assets	0	0	125	0
Total other expense, net	(767)	(168)	(648)	(269)
Loss before income taxes	(4,044,293)	(2,041,096)	(5,720,651)	(3,211,700)
Income tax net expense	(3,243)	(4,152,987)	(6,336)	(4,045,777)
Net loss	$ (4,047,536)	$ (6,194,083)	$ (5,726,987)	$ (7,257,477)
Net loss per common share:
Basic (in dollars per share)	$ (0.20)	$ (0.31)	$ (0.28)	$ (0.36)
Diluted (in dollars per share)	$ (0.20)	$ (0.31)	$ (0.28)	$ (0.36)
Weighted average number of shares used in computing net loss per common share:
Basic (in shares)	20,326,577	20,262,299	20,217,646	20,229,979
Diluted (in shares)	20,326,577	20,262,299	20,217,646	20,229,979

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (5,726,987)	$ (7,257,477)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	440,676	588,745
Stock-based compensation	773,342	810,490
Provision for uncollectible accounts	19,000	682,725
Provision for sales returns	(581,000)	(845,000)
Provision for inventory reserves	615,000	69,000
Provision for deferred income taxes	0	4,039,723
Loss on abandonment of assets	0	2,201
Gain on sale of long-term assets	(125)	0
Changes in assets and liabilities:
Accounts receivable	1,609,967	2,590,297
Inventory	3,794,495	868,994
Prepaid expenses and other assets, net	(264,239)	(394,745)
Accounts payable	28,047	(10,651)
Accrued cooperative advertising	(184,000)	8,000
Accrued income taxes	6,336	6,054
Other accrued liabilities	744,375	647,581
Net cash provided by operating activities	1,274,887	1,805,937
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(155,185)	(956,666)
Patent, license rights, and trademark costs	(45,742)	(59,863)
Proceeds from sale of assets	175	0
Net cash used in investing activities	(200,752)	(1,016,529)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock option exercises	172,766	0
Net cash provided by financing activities	172,766	0
NET INCREASE IN CASH AND CASH EQUIVALENTS	1,246,901	789,408
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	4,007,341	2,573,405
CASH AND CASH EQUIVALENTS, END OF PERIOD	5,254,242	3,362,813
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	784	318
Cash paid during the period for income taxes	$ 0	$ 0

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	6 Months Ended
	Jun. 30, 2015
DESCRIPTION OF BUSINESS [Abstract]
DESCRIPTION OF BUSINESS	1. DESCRIPTION OF BUSINESS Charles & Colvard, Ltd. (the “Company”), a North Carolina corporation founded in 1995, manufactures, markets, and distributes Charles & Colvard Created Moissanite ®

BASIS OF PRESENTATION AND SIGNI

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2015
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation - The condensed consolidated financial statements as of and for the three and six months ended June 30, 2015 and 2014 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of December 31, 2014 is derived from the audited financial statements as of that date. The accompanying statements should be read in conjunction with the audited financial statements and related notes, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 13, 2015 (the “2014 Annual Report”). The accompanying condensed consolidated financial statements as of and for the three and six months ended June 30, 2015 and 2014 include the accounts of the Company and its wholly owned subsidiaries Moissanite.com, LLC, formed in 2011; Charles & Colvard Direct, LLC, formed in 2011; and Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary that became a dormant entity in the second quarter of 2009 and the operations of which ceased in 2008. All intercompany accounts have been eliminated. Significant Accounting Policies - Use of Estimates - T Reclassifications - Recently Adopted/Issued Accounting Pronouncements - In May 2014, the Financial Accounting Standards Board issued a new accounting standard that supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of the new standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The new standard defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of the pending adoption of the standard on its consolidated financial statements and has not yet determined the method by which the Company will adopt the standard in 2017. In August 2014, the FASB issued new accounting guidance intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Under U.S. GAAP, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, U.S. GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. This new accounting guidance provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. This new accounting guidance is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect this new accounting guidance will have a material impact on its consolidated financial statements. All other new and recently issued, but not yet effective, accounting pronouncements have been deemed to be not relevant to the Company and therefore are not expected to have any impact once adopted.

SEGMENT INFORMATION AND GEOGRAP

SEGMENT INFORMATION AND GEOGRAPHIC DATA	6 Months Ended
	Jun. 30, 2015
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
SEGMENT INFORMATION AND GEOGRAPHIC DATA	3. SEGMENT INFORMATION AND GEOGRAPHIC DATA The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making operating decisions and assessing performance as the source of the Company’s operating and reportable segments. During 2014, the Company Previously, the Company determined it managed its business through two distribution channels, wholesale distribution and direct-to-consumer. While the Company has always managed its businesses as three separate operating segments, it previously aggregated the Moissanite.com, LLC and Charles & Colvard Direct, LLC operating segments into a single reportable segment for reporting purposes. The two wholly owned operating subsidiaries that previously were aggregated under the direct-to-consumer segment are now each being presented as a separate reportable segment. The Company believes aggregation of the two subsidiaries into one reportable segment for reporting purposes is no longer warranted due to changes in how it sources product and sells directly to consumers, including changes in the management structure, strategic initiatives, and changes in sales models made during the year ended December 31, 2014 for each of the two wholly owned subsidiaries. Certain amounts for the three and six months ended June 30, 2014 have been reclassified to conform to the current period presentation as a result of this change in reportable segments. T The Company allocates certain general and administrative expenses from its parent entity to its two direct-to-consumer distribution segments primarily based on net sales and number of employees. Unallocated expenses, which also include interest and taxes, remain in the parent entity’s wholesale distribution segment. Summary financial information by reportable segment is as follows: Three Months Ended June 30, 2015 Wholesale Moissanite.com Charles & Colvard Direct Total Net sales Loose jewels $ 3,628,160 $ 138,148 $ - $ 3,766,308 Finished jewelry 1,294,494 1,122,732 1,293,338 3,710,564 Total $ 4,922,654 $ 1,260,880 $ 1,293,338 $ 7,476,872 Product line cost of goods sold Loose jewels $ 3,040,470 $ 21,748 $ 65 $ 3,062,283 Finished jewelry 1,204,174 533,659 259,089 1,996,922 Total $ 4,244,644 $ 555,407 $ 259,154 $ 5,059,205 Product line gross profit Loose jewels $ 587,690 $ 116,400 $ (65 ) $ 704,025 Finished jewelry 90,320 589,073 1,034,249 1,713,642 Total $ 678,010 $ 705,473 $ 1,034,184 $ 2,417,667 Operating loss $ (2,617,570 ) $ (278,605 ) $ (1,147,351 ) $ (4,043,526 ) Depreciation and amortization $ 163,209 $ 31,987 $ 26,752 $ 221,948 Capital expenditures $ 35,636 $ - $ 2,445 $ 38,081 Three Months Ended June 30, 2014 Wholesale Moissanite.com Charles & Colvard Direct Total Net sales Loose jewels $ 3,837,012 $ 171,819 $ 1,508 $ 4,010,339 Finished jewelry 3,012,372 536,201 282,735 3,831,308 Total $ 6,849,384 $ 708,020 $ 284,243 $ 7,841,647 Product line cost of goods sold Loose jewels $ 2,040,944 $ 24,902 $ 444 $ 2,066,290 Finished jewelry 2,377,715 287,023 82,626 2,747,364 Total $ 4,418,659 $ 311,925 $ 83,070 $ 4,813,654 Product line gross profit Loose jewels $ 1,796,068 $ 146,917 $ 1,064 $ 1,944,049 Finished jewelry 634,657 249,178 200,109 1,083,944 Total $ 2,430,725 $ 396,095 $ 201,173 $ 3,027,993 Operating loss $ (1,008,146 ) $ (331,243 ) $ (701,539 ) $ (2,040,928 ) Depreciation and amortization $ 214,021 $ 71,093 $ 25,833 $ 310,947 Capital expenditures $ 928,341 $ - $ - $ 928,341 Six Months Ended June 30, 2015 Wholesale Moissanite.com Charles & Colvard Direct Total Net sales Loose jewels $ 7,316,034 $ 271,404 $ - $ 7,587,438 Finished jewelry 3,518,781 2,093,402 2,654,315 8,266,498 Total $ 10,834,815 $ 2,364,806 $ 2,654,315 $ 15,853,936 Product line cost of goods sold Loose jewels $ 5,242,573 $ 40,819 $ 65 $ 5,283,457 Finished jewelry 2,431,984 1,014,019 578,864 4,024,867 Total $ 7,674,557 $ 1,054,838 $ 578,929 $ 9,308,324 Product line gross profit Loose jewels $ 2,073,461 $ 230,585 $ (65 ) $ 2,303,981 Finished jewelry 1,086,797 1,079,383 2,075,451 4,241,631 Total $ 3,160,258 $ 1,309,968 $ 2,075,386 $ 6,545,612 Operating loss $ (2,851,346 ) $ (682,734 ) $ (2,185,923 ) $ (5,720,003 ) Depreciation and amortization $ 323,849 $ 63,694 $ 53,133 $ 440,676 Capital expenditures $ 145,200 $ 533 $ 9,452 $ 155,185 Six Months Ended June 30, 2014 Wholesale Moissanite.com Charles & Colvard Direct Total Net sales Loose jewels $ 7,370,756 $ 318,761 $ 1,508 $ 7,691,025 Finished jewelry 4,632,243 1,097,467 488,465 6,218,175 Total $ 12,002,999 $ 1,416,228 $ 489,973 $ 13,909,200 Product line cost of goods sold Loose jewels $ 3,816,079 $ 47,175 $ 444 $ 3,863,698 Finished jewelry 3,657,816 581,908 145,888 4,385,612 Total $ 7,473,895 $ 629,083 $ 146,332 $ 8,249,310 Product line gross profit Loose jewels $ 3,554,677 $ 271,586 $ 1,064 $ 3,827,327 Finished jewelry 974,427 515,559 342,577 1,832,563 Total $ 4,529,104 $ 787,145 $ 343,641 $ 5,659,890 Operating loss $ (1,133,003 ) $ (736,014 ) $ (1,342,414 ) $ (3,211,431 ) Depreciation and amortization $ 393,693 $ 144,252 $ 50,800 $ 588,745 Capital expenditures $ 956,666 $ - $ - $ 956,666 June 30, 2015 Wholesale Moissanite.com Charles & Colvard Direct Total Total assets $ 47,064,928 $ 87,091 $ 88,257 $ 47,240,276 December 31, 2014 Wholesale Moissanite.com Charles & Colvard Direct Total Total assets $ 51,183,888 $ 128,049 $ 114,460 $ 51,426,397 A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the condensed consolidated financial statements is as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Product line cost of goods sold $ 5,059,205 $ 4,813,654 $ 9,308,324 $ 8,249,310 Non-capitalized manufacturing and production control expenses 500,460 256,144 647,572 411,167 Freight out 111,256 76,077 201,990 135,976 Inventory valuation allowances 411,000 45,000 615,000 69,000 Other inventory adjustments 379,616 134,106 532,554 122,570 Cost of goods sold $ 6,461,537 $ 5,324,981 $ 11,305,440 $ 8,988,023 The Company’s net inventories by product line maintained in the parent entity’s wholesale distribution segment are as follows: June 30, 2015 December 31, 2014 Loose jewels Raw materials $ 6,103,326 $ 4,658,692 Work-in-process 5,277,481 5,752,103 Finished goods 17,769,727 21,495,873 Finished goods on consignment 75,375 46,284 Total $ 29,225,909 $ 31,952,952 Finished jewelry Raw materials $ 164,193 $ 258,707 Work-in-process 507,480 540,576 Finished goods 4,481,665 5,557,417 Finished goods on consignment 109,904 578,200 Total $ 5,263,242 $ 6,934,900 Supplies inventories of approximately $40,000 and $51,000 at June 30, 2015 and December 31, 2014, respectively, included in finished goods inventories in the condensed consolidated financial statements are omitted from inventories by product line because they are used in both product lines and are not maintained separately. The Company’s two operating subsidiaries comprising the two direct-to-consumer distribution segments carry no net inventories, and inventory is transferred without intercompany markup from the parent entity’s wholesale distribution segment as product line cost of goods sold when sold to the end consumer. The Company recognizes sales by geographic area based on the country in which the customer is based. A portion of the Company’s international wholesale distribution segment sales represents products sold internationally that may be re-imported to United States (“U.S.”) retailers. Sales to international end consumers made by the Company’s two segments are included in U.S. sales because products are shipped and invoiced to a U.S.-based intermediary party that assumes all international shipping and credit risks. The following presents certain data by geographic area: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net sales United States $ 6,956,269 $ 7,267,441 $ 14,718,615 $ 12,976,474 International 520,603 574,206 1,135,321 932,726 Total $ 7,476,872 $ 7,841,647 $ 15,853,936 $ 13,909,200 June 30, 2015 December 31, 2014 Property and equipment, net United States $ 1,663,608 $ 1,859,355 International - - Total $ 1,663,608 $ 1,859,355 June 30, 2015 December 31, 2014 Intangible assets, net United States $ 26,978 $ 39,050 International 145,917 177,897 Total $ 172,895 $ 216,947

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2015
FAIR VALUE MEASUREMENTS [Abstract]
FAIR VALUE MEASUREMENTS	4. FAIR VALUE MEASUREMENTS U · Level 1 - · Level 2 - · Level 3 - The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. This determination requires significant judgments to be made by management of the Company. The instruments identified as subject to fair value measurements on a recurring basis are cash and cash equivalents, trade accounts receivable, trade accounts payable, and accrued expenses. All instruments are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Assets that are measured at fair value on a non-recurring basis include property and equipment, leasehold improvements, and intangible assets, comprising patents, license rights, and trademarks. These items are recognized at fair value when they are considered to be impaired.

INVENTORIES

INVENTORIES	6 Months Ended
	Jun. 30, 2015
INVENTORIES [Abstract]
INVENTORIES	5. INVENTORIES June 30, 2015 December 31, 2014 Raw materials $ 6,267,519 $ 4,917,399 Work-in-process 5,784,961 6,292,679 Finished goods 23,795,375 27,985,067 Finished goods on consignment 210,279 677,484 Less inventory reserves (1,529,000 ) (934,000 ) Total $ 34,529,134 $ 38,938,629 Current portion $ 13,404,996 $ 13,320,639 Long-term portion 21,124,138 25,617,990 Total $ 34,529,134 $ 38,938,629 Inventories are stated at the lower of cost or market on an average cost basis. Inventory costs include direct material and labor, inbound freight, purchasing and receiving costs, inspection costs, and warehousing costs. The Company’s work-in-process inventories include raw SiC crystals on which processing costs, such as labor and sawing, have been incurred; and components, such as metal castings and finished good moissanite jewels, that have been issued to jobs in the manufacture of finished jewelry. The Company’s moissanite jewel manufacturing process involves the production of intermediary shapes, called “preforms,” that vary depending upon the size and shape of the finished jewel. To maximize manufacturing efficiencies, preforms may be made in advance of current finished inventory needs but remain in work-in-process inventories. As of June 30, 2015 and December 31, 2014, work-in-process inventories issued to active production jobs approximated $1.40 million and $2.05 million, respectively. The Company’s jewels do not degrade in quality over time and inventory generally consists of the shapes and sizes most commonly used in the jewelry industry. In addition, the majority of jewel inventory is not mounted in finished jewelry settings and is therefore not subject to fashion trends nor is obsolescence a significant factor. The Company has very small market penetration in the worldwide jewelry market, and the Company has the exclusive right in the U.S. through mid-2015 and in many other countries through mid-2016 to produce and sell created SiC for use in jewelry applications. During the three months ended June 30, 2015, management identified an opportunity to sell approximately $2.28 million of slow moving loose jewel inventory of less desirable quality. As a result of this sale, the Company determined a lower of cost or market reserve of $103,000 was required on some of the remaining inventory of these lower quality goods. In view of the foregoing factors, management has concluded that no excess or obsolete loose jewel inventory reserve requirements existed as of June 30, 2015 on goods other than the lower quality goods noted previously. The Company manufactures finished jewelry featuring moissanite. Relative to loose moissanite jewels, finished jewelry is more fashion oriented and subject to styling trends that could render certain designs obsolete. The majority of the Company’s finished jewelry featuring moissanite is held in inventory for resale and consists of such basic designs as stud earrings, solitaire and three-stone rings, pendants, and bracelets that tend not to be subject to significant obsolescence risk due to their classic styling. In addition, the Company manufactures small individual quantities of designer-inspired moissanite fashion jewelry as part of its sample line that are used in the selling process to its wholesale customers. In 2011, the Company began purchasing fashion finished jewelry comprised of base metals and non-precious gemstones for sale through Lulu Avenue ® Periodically, the Company ships finished goods inventory to wholesale customers on consignment terms. Under these terms, the customer assumes the risk of loss and has an absolute right of return for a specified period. Finished goods on consignment . Total net loose jewel inventories at June 30, 2015 and December 31, 2014, including inventory on consignment net of reserves, were $29.23 million and $31.95 million, respectively. The loose jewel inventories at June 30, 2015 and December 31, 2014 include shrinkage reserves of $142,000 and $17,000, respectively, with $8,000 and $17,000 of shrinkage reserves on inventory on consignment at June 30, 2015 and December 31, 2014, respectively. Loose jewel inventories at June 30, 2015 and December 31, 2014 also include recuts reserves of $366,000 and $216,000, respectively. Total net jewelry inventories at June 30, 2015 and December 31, 2014, including inventory on consignment net of reserves, finished jewelry featuring moissanite manufactured by the Company since entering the finished jewelry business in 2010, and fashion finished jewelry purchased by the Company for sale through Lulu Avenue ® The need for adjustments to inventory reserves is evaluated on a period-by-period basis.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2015
INCOME TAXES [Abstract]
INCOME TAXES	6. INCOME TAXES The Company recognized an income tax net expense of approximately $3,000 for the three months ended June 30, 2015 compared to an income tax net expense of approximately $4.15 million for the three months ended June 30, 2014. The Company recognized an income tax net expense of approximately $6,000 for the six months ended June 30, 2015 compared to an income tax net expense of $4.05 million for the six months ended June 30, 2014. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets. For the three and six months ended June 30, 2015, the Company recognized $3,000 and $6,000, respectively, of income tax expense for estimated tax, penalties, and interest associated with uncertain tax positions. During the three and six months ended June 30, 2014, the Company also recognized approximately $3,000 and $6,000, respectively, of income tax expense for estimated tax, penalties, and interest associated with uncertain tax positions.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2015
COMMITMENTS AND CONTINGENCIES [Abstract]
COMMITMENTS AND CONTINGENCIES	7. COMMITMENTS AND CONTINGENCIES Lease Commitments In March 2004, the Company entered into a seven-year lease, for approximately 16,500 square feet of mixed-use space from an unaffiliated third party. In January 2011, the Company amended the lease to extend the term through January 2017 with a one-time option to terminate the lease effective as of July 31, 2014. The Company exercised this right to terminate the lease by giving notice to the lessor prior to October 31, 2013. The cost to terminate the lease effective July 31, 2014 was approximately $112,000, which the Company paid at the time notice was given to terminate the lease. The Company recognizes rent expense on a straight-line basis, giving consideration to the rent holidays and escalations, the lease signing and moving allowance paid to the Company, and the rent abatement. As of June 30, 2015, the Company’s future minimum payments under the operating leases were as follows: 2015 $ 280,076 2016 569,138 2017 584,789 2018 600,871 2019 617,395 Thereafter 1,176,330 Total $ 3,828,599 Rent expense for the three months ended June 30, 2015 and 2014 was approximately $128,000 and $84,000, respectively. Rent expense for the six months ended June 30, 2015 and 2014 was approximately $255,000 and $115,000, respectively. Purchase Commitments On June 6, 1997, the Company entered into an amended and restated exclusive supply agreement with Cree, Inc. (“Cree”). The exclusive supply agreement had an initial term of ten years that was extended in January 2005 to July 2015. In connection with the amended and restated exclusive supply agreement, the Company committed to purchase from Cree a minimum of 50%, by dollar volume, of its raw material SiC crystal requirements. If the Company’s orders required Cree to expand beyond specified production levels, the Company committed to purchase certain minimum quantities. On December 12, 2014, the Company entered into a new exclusive supply agreement with Cree (the “New Supply Agreement”), which superseded and replaced (with respect to materials ordered subsequent to the effective date of the New Supply Agreement) the exclusive supply agreement that was set to expire in 2015. Under the New Supply Agreement, subject to certain terms and conditions, the Company agreed to exclusively purchase from Cree, and Cree agreed to exclusively supply, 100% of the Company’s required SiC materials in quarterly installments that must equal or exceed a set minimum order quantity. The initial term of the New Supply Agreement will expire on June 24, 2018, unless extended by the parties. The Company also has one option to unilaterally extend the term of the agreement for an additional two-year period, subject to certain conditions. The Company’s total purchase commitment under the New Supply Agreement until June 2018 is dependent upon the size of the SiC material and ranges between approximately $29.6 million and approximately $31.5 million. During the six months ended June 30, 2015 and 2014, the Company purchased approximately $3.05 million and $3.58 million, respectively, of SiC crystals from Cree.

LINE OF CREDIT

LINE OF CREDIT	6 Months Ended
	Jun. 30, 2015
LINE OF CREDIT [Abstract]
LINE OF CREDIT	8. LINE OF CREDIT On September 20, 2013, the Company obtained a $10,000,000 revolving line of credit (the “Line of Credit”) from PNC Bank, National Association (“PNC Bank”) for general corporate and working capital purposes. The Line of Credit was evidenced by a Committed Line of Credit Note, dated September 20, 2013 (the “Note”), which was set to mature on June 15, 2015. The interest rate under the Note was the one-month LIBOR rate (adjusted daily) plus 1.50%, calculated on an actual/360 basis. The Line of Credit was also governed by a loan agreement, dated September 20, 2013, and was guaranteed by Charles & Colvard Direct, LLC, and Moissanite.com, LLC. The Line of Credit was secured by a lien on substantially all assets of the Company and its subsidiaries. Effective June 25, 2014, the Line of Credit was terminated concurrent with the Company entering into a new banking relationship with Wells Fargo Bank, National Association (“Wells Fargo”). The Company had not utilized the Line of Credit. The Company recognized the remaining $19,000 of deferred legal expenses associated with this Line of Credit upon termination. On June 25, 2014, the Company and its wholly owned subsidiaries, Charles & Colvard Direct, LLC, and Moissanite.com, LLC (collectively, the “Borrowers”), obtained a $10,000,000 asset-based revolving credit facility (the “Credit Facility”) from Wells Fargo. The Credit Facility will be used for general corporate and working capital purposes, including transaction fees and expenses incurred in connection therewith and the issuance of letters of credit up to a $1,000,000 sublimit. The Credit Facility will mature on June 25, 2017. The Credit Facility includes a $5,000,000 sublimit for advances that are supported by a 90% guaranty provided by the U.S. Export-Import Bank. Advances under the Credit Facility are limited to a borrowing base, which is computed by applying specified advance rates to the value of the Borrowers’ eligible accounts and inventory, less reserves. Advances against inventory are further subject to an initial $3,000,000 maximum. The Borrowers must maintain a minimum of $1,000,000 in excess availability at all times. There are no other financial covenants. Each advance accrues interest at a rate equal to Wells Fargo’s 3-month LIBOR rate plus 2.50%, calculated on an actual/360 basis and payable monthly in arrears. Principal outstanding during an event of default accrues interest at a rate of 3% in excess of the above rate. Any advance may be prepaid in whole or in part at any time. In addition, the maximum line amount may be reduced by the Company in whole or part at any time, subject to a fee equal to 2% of any reduction in the first year after closing, 1% of any reduction in the second year after closing, and 0% thereafter. There are no mandatory prepayments or line reductions. The Credit Facility is secured by a lien on substantially all assets of the Borrowers, each of which is jointly and severally liable for all obligations thereunder. Wells Fargo’s security interest in certain SiC materials is subordinate to Cree’s security interest in such materials pursuant to the New Supply Agreement and an Intercreditor Agreement with Wells Fargo. The Credit Facility is evidenced by a credit and security agreement, dated as of June 25, 2014 and amended as of September 16, 2014 and December 12, 2014 (collectively, the “Credit Agreement”), and customary ancillary documents. The Credit Agreement contains customary covenants, representations and cash dominion provisions, including a financial reporting covenant and limitations on dividends, distributions, debt, contingent obligations, liens, loans, investments, mergers, acquisitions, divestitures, subsidiaries, affiliate transactions, and changes in control. Events of default under the Credit Facility include, without limitation, (1) any impairment of the Export-Import Bank guaranty, unless the guaranteed advances are repaid within two business days, (2) an event of default under any other indebtedness of the Borrowers in excess of $200,000, and (3) a material adverse change in the ability of the Borrowers to perform their obligations under the Credit Agreement or in the Borrowers’ assets, liabilities, businesses or prospects, or other circumstances that Wells Fargo believes may impair the prospect of repayment. If an event of default occurs, Wells Fargo is entitled to take enforcement action, including acceleration of amounts due under the Credit Agreement and foreclosure upon collateral. The Credit Agreement contains other customary terms, including indemnity, expense reimbursement, yield protection, and confidentiality provisions. Wells Fargo is permitted to assign the Credit Facility. As of June 30, 2015, the Company had not borrowed against the Credit Facility.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2015
STOCK- BASED COMPENSATION [Abstract]
STOCK- BASED COMPENSATION	9. STOCK-BASED COMPENSATION The following table summarizes the components of the Company’s stock-based compensation included in net loss: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Employee stock options $ 119,990 $ 209,698 $ 306,461 $ 392,422 Consultant stock options 25,203 - 41,448 - Restricted stock awards 248,910 224,281 425,433 418,068 Income tax benefit - (78,349 ) - (146,046 ) Totals $ 394,103 $ 355,630 $ 773,342 $ 664,444 No stock-based compensation was capitalized as a cost of inventory during the three and six months ended June 30, 2015 and 2014. Stock Options - Shares Weighted Average Exercise Price Outstanding, December 31, 2014 1,665,946 $ 2.93 Granted 526,133 $ 1.39 Exercised (241,752 ) $ 0.71 Forfeited (90,856 ) $ 3.55 Expired (300,892 ) $ 2.96 Outstanding, June 30, 2015 1,558,579 $ 2.71 The weighted average grant-date fair value of stock options granted during the six months ended June 30, 2015 was $0.77. The total fair value of stock options that vested during the six months ended June 30, 2015 was approximately $392,000. The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted average assumptions for stock options granted during the six months ended June 30, 2015: Dividend yield 0.0 % Expected volatility 65.7 % Risk-free interest rate 1.60 % Expected lives (years) 5.62 Although the Company issued dividends in prior years, a dividend yield of zero was used due to the uncertainty of future dividend payments. Volatility is a measure of the amount by which a financial variable such as share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. . The expected lives of the stock options issued in 2014 and the first six months of 2015 represent the estimated period of time until exercise or forfeiture and are based on the simplified method of using the mid-point between the vesting term and the original contractual term. Stock options issued prior to 2014 were expensed using expected lives that represented the time until exercise or forfeiture using historical information. The following table summarizes information about stock options outstanding at June 30, 2015: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 6/30/2015 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 6/30/2015 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 6/30/2015 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 1,558,579 7.84 $ 2.71 736,338 6.23 $ 3.26 1,486,036 7.77 $ 2.74 As of June 30, 2015, the unrecognized stock-based compensation expense related to unvested stock options was approximately $942,000, which is expected to be recognized over a weighted average period of approximately 19 months. The aggregate intrinsic value of stock options outstanding, exercisable, and vested or expected to vest at June 30, 2015 was approximately $118,000, $38,000, and $111,000, respectively. This amount is before applicable income taxes and represents the closing market price of the Company’s common stock at June 30, 2015 less the grant price, multiplied by the number of stock options that had a grant price that is less than the closing market price. This amount represents the amount that would have been received by the optionees had these stock options been exercised on that date. During the three and six months ended June 30, 2015, the aggregate intrinsic value of stock options exercised was approximately $169,000 and $167,000, respectively. Restricted Stock - Shares Weighted Average Grant Date Fair Value Unvested, December 31, 2014 287,006 $ 3.29 Granted 487,500 $ 1.38 Vested (220,752 ) $ 2.58 Canceled - $ - Unvested, June 30, 2015 553,754 $ 1.89 As of June 30, 2015, the unrecognized stock-based compensation expense related to unvested restricted stock was approximately $807,000, which is expected to be recognized over a weighted average period of approximately 10 months. Dividends

NET LOSS PER COMMON SHARE

NET LOSS PER COMMON SHARE	6 Months Ended
	Jun. 30, 2015
NET LOSS PER COMMON SHARE [Abstract]
NET LOSS PER COMMON SHARE	10. NET LOSS PER COMMON SHARE Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods. Diluted net loss per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of stock options that are computed using the treasury stock method. Antidilutive stock awards are comprised of stock options and unvested restricted shares which would have been antidilutive in the application of the treasury stock method in accordance with the “Earnings Per Share” topic of the Financial Accounting Standard Board Accounting Standards Codification. The following table reconciles the differences between the basic and diluted earnings per share presentations: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net loss $ (4,047,536 ) $ (6,194,083 ) $ (5,726,987 ) $ (7,257,477 ) Denominator: Weighted average common shares outstanding: Basic 20,326,577 20,262,299 20,217,646 20,229,979 Stock options - - - - Fully diluted 20,326,577 20,262,299 20,217,646 20,229,979 Net loss per common share: Basic $ (0.20 ) $ (0.31 ) $ (0.28 ) $ (0.36 ) Diluted $ (0.20 ) $ (0.31 ) $ (0.28 ) $ (0.36 ) For the three and six months ended June 30, 2015, stock options to purchase approximately 1.56 million shares, and for the three and six months ended June 30, 2014, stock options to purchase approximately 1.37 million shares, were excluded from the computation of diluted net loss per common share because the exercise price of the stock options was greater than the average market price of the common shares or the effect of inclusion of such amounts would be antidilutive to net loss per common share.

MAJOR CUSTOMERS AND CONCENTRATI

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	6 Months Ended
	Jun. 30, 2015
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	11. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments, and trade accounts receivable. The Company maintains cash and cash equivalents and investments with high-quality financial institutions. At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits of $250,000 per depositor at each financial institution. Amounts on deposit in excess of FDIC insurable limits at June 30, 2015 and December 31, 2014 approximated $4.94 million and $3.70 million, respectively. Trade receivables potentially subject the Company to credit risk. The Company’s standard wholesale customer payment terms on trade receivables are generally between 30 and 90 days, . The Company extends credit to its customers based upon a number of factors, including an evaluation of the customer’s financial condition and credit history, the customer’s payment history with the Company, the customer’s reputation in the trade, and/or an evaluation of the Company’s opportunity to introduce its moissanite jewels or finished jewelry featuring moissanite to new or expanded markets. At times, a portion of the Company’s accounts receivable will be due from customers that have individual balances in excess of 10% of the Company’s total net accounts receivable. The following is a summary of customers that represent greater than or equal to 10% of total net accounts receivable: June 30, 2015 December 31, 2014 Customer A 59 % 28 % Customer B 14 % 11 % A significant portion of sales is derived from certain customer relationships. The following is a summary of customers that represent greater than or equal to 10% of total gross sales: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Customer A 43 % 36 % 33 % 30 % Customer B 1 % 4 % 9 % 13 % Customer C 0 % 15 % -2 % 17 % The Company records its sales return allowance at the corporate level based on several factors including historical sales return activity and specific allowances for known customer returns. For this disclosure, the Company reports the customer activity without effect of specific sales return allowances. Customer C returned goods in excess of its purchases during the period; however, these returns did not affect current period revenue as these returns had been specifically reserved as of December 31, 2014. As these returns were received from Customer C, the Company reduced its sales return allowance related to these returns.

BASIS OF PRESENTATION AND SIG17

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2015
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation - The condensed consolidated financial statements as of and for the three and six months ended June 30, 2015 and 2014 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of December 31, 2014 is derived from the audited financial statements as of that date. The accompanying statements should be read in conjunction with the audited financial statements and related notes, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 13, 2015 (the “2014 Annual Report”). The accompanying condensed consolidated financial statements as of and for the three and six months ended June 30, 2015 and 2014 include the accounts of the Company and its wholly owned subsidiaries Moissanite.com, LLC, formed in 2011; Charles & Colvard Direct, LLC, formed in 2011; and Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary that became a dormant entity in the second quarter of 2009 and the operations of which ceased in 2008. All intercompany accounts have been eliminated.
Significant Accounting Policies	Significant Accounting Policies -
Use of Estimates	Use of Estimates - T
Reclassifications	Reclassifications -
Recently Adopted/Issued Accounting Pronouncements	Recently Adopted/Issued Accounting Pronouncements - In May 2014, the Financial Accounting Standards Board issued a new accounting standard that supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of the new standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The new standard defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of the pending adoption of the standard on its consolidated financial statements and has not yet determined the method by which the Company will adopt the standard in 2017. In August 2014, the FASB issued new accounting guidance intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Under U.S. GAAP, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, U.S. GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. This new accounting guidance provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. This new accounting guidance is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect this new accounting guidance will have a material impact on its consolidated financial statements. All other new and recently issued, but not yet effective, accounting pronouncements have been deemed to be not relevant to the Company and therefore are not expected to have any impact once adopted.

SEGMENT INFORMATION AND GEOGR18

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)	6 Months Ended
	Jun. 30, 2015
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Summary information by segment	Summary financial information by reportable segment is as follows: Three Months Ended June 30, 2015 Wholesale Moissanite.com Charles & Colvard Direct Total Net sales Loose jewels $ 3,628,160 $ 138,148 $ - $ 3,766,308 Finished jewelry 1,294,494 1,122,732 1,293,338 3,710,564 Total $ 4,922,654 $ 1,260,880 $ 1,293,338 $ 7,476,872 Product line cost of goods sold Loose jewels $ 3,040,470 $ 21,748 $ 65 $ 3,062,283 Finished jewelry 1,204,174 533,659 259,089 1,996,922 Total $ 4,244,644 $ 555,407 $ 259,154 $ 5,059,205 Product line gross profit Loose jewels $ 587,690 $ 116,400 $ (65 ) $ 704,025 Finished jewelry 90,320 589,073 1,034,249 1,713,642 Total $ 678,010 $ 705,473 $ 1,034,184 $ 2,417,667 Operating loss $ (2,617,570 ) $ (278,605 ) $ (1,147,351 ) $ (4,043,526 ) Depreciation and amortization $ 163,209 $ 31,987 $ 26,752 $ 221,948 Capital expenditures $ 35,636 $ - $ 2,445 $ 38,081 Three Months Ended June 30, 2014 Wholesale Moissanite.com Charles & Colvard Direct Total Net sales Loose jewels $ 3,837,012 $ 171,819 $ 1,508 $ 4,010,339 Finished jewelry 3,012,372 536,201 282,735 3,831,308 Total $ 6,849,384 $ 708,020 $ 284,243 $ 7,841,647 Product line cost of goods sold Loose jewels $ 2,040,944 $ 24,902 $ 444 $ 2,066,290 Finished jewelry 2,377,715 287,023 82,626 2,747,364 Total $ 4,418,659 $ 311,925 $ 83,070 $ 4,813,654 Product line gross profit Loose jewels $ 1,796,068 $ 146,917 $ 1,064 $ 1,944,049 Finished jewelry 634,657 249,178 200,109 1,083,944 Total $ 2,430,725 $ 396,095 $ 201,173 $ 3,027,993 Operating loss $ (1,008,146 ) $ (331,243 ) $ (701,539 ) $ (2,040,928 ) Depreciation and amortization $ 214,021 $ 71,093 $ 25,833 $ 310,947 Capital expenditures $ 928,341 $ - $ - $ 928,341 Six Months Ended June 30, 2015 Wholesale Moissanite.com Charles & Colvard Direct Total Net sales Loose jewels $ 7,316,034 $ 271,404 $ - $ 7,587,438 Finished jewelry 3,518,781 2,093,402 2,654,315 8,266,498 Total $ 10,834,815 $ 2,364,806 $ 2,654,315 $ 15,853,936 Product line cost of goods sold Loose jewels $ 5,242,573 $ 40,819 $ 65 $ 5,283,457 Finished jewelry 2,431,984 1,014,019 578,864 4,024,867 Total $ 7,674,557 $ 1,054,838 $ 578,929 $ 9,308,324 Product line gross profit Loose jewels $ 2,073,461 $ 230,585 $ (65 ) $ 2,303,981 Finished jewelry 1,086,797 1,079,383 2,075,451 4,241,631 Total $ 3,160,258 $ 1,309,968 $ 2,075,386 $ 6,545,612 Operating loss $ (2,851,346 ) $ (682,734 ) $ (2,185,923 ) $ (5,720,003 ) Depreciation and amortization $ 323,849 $ 63,694 $ 53,133 $ 440,676 Capital expenditures $ 145,200 $ 533 $ 9,452 $ 155,185 Six Months Ended June 30, 2014 Wholesale Moissanite.com Charles & Colvard Direct Total Net sales Loose jewels $ 7,370,756 $ 318,761 $ 1,508 $ 7,691,025 Finished jewelry 4,632,243 1,097,467 488,465 6,218,175 Total $ 12,002,999 $ 1,416,228 $ 489,973 $ 13,909,200 Product line cost of goods sold Loose jewels $ 3,816,079 $ 47,175 $ 444 $ 3,863,698 Finished jewelry 3,657,816 581,908 145,888 4,385,612 Total $ 7,473,895 $ 629,083 $ 146,332 $ 8,249,310 Product line gross profit Loose jewels $ 3,554,677 $ 271,586 $ 1,064 $ 3,827,327 Finished jewelry 974,427 515,559 342,577 1,832,563 Total $ 4,529,104 $ 787,145 $ 343,641 $ 5,659,890 Operating loss $ (1,133,003 ) $ (736,014 ) $ (1,342,414 ) $ (3,211,431 ) Depreciation and amortization $ 393,693 $ 144,252 $ 50,800 $ 588,745 Capital expenditures $ 956,666 $ - $ - $ 956,666 June 30, 2015 Wholesale Moissanite.com Charles & Colvard Direct Total Total assets $ 47,064,928 $ 87,091 $ 88,257 $ 47,240,276 December 31, 2014 Wholesale Moissanite.com Charles & Colvard Direct Total Total assets $ 51,183,888 $ 128,049 $ 114,460 $ 51,426,397
Schedule of reconciliation of product line cost of goods sold to cost of goods sold as reported in consolidated financial statements	A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the condensed consolidated financial statements is as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Product line cost of goods sold $ 5,059,205 $ 4,813,654 $ 9,308,324 $ 8,249,310 Non-capitalized manufacturing and production control expenses 500,460 256,144 647,572 411,167 Freight out 111,256 76,077 201,990 135,976 Inventory valuation allowances 411,000 45,000 615,000 69,000 Other inventory adjustments 379,616 134,106 532,554 122,570 Cost of goods sold $ 6,461,537 $ 5,324,981 $ 11,305,440 $ 8,988,023
Schedule of inventories by product line maintained in its wholesale distribution segment	The Company’s net inventories by product line maintained in the parent entity’s wholesale distribution segment are as follows: June 30, 2015 December 31, 2014 Loose jewels Raw materials $ 6,103,326 $ 4,658,692 Work-in-process 5,277,481 5,752,103 Finished goods 17,769,727 21,495,873 Finished goods on consignment 75,375 46,284 Total $ 29,225,909 $ 31,952,952 Finished jewelry Raw materials $ 164,193 $ 258,707 Work-in-process 507,480 540,576 Finished goods 4,481,665 5,557,417 Finished goods on consignment 109,904 578,200 Total $ 5,263,242 $ 6,934,900
Data by geographic area	The following presents certain data by geographic area: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net sales United States $ 6,956,269 $ 7,267,441 $ 14,718,615 $ 12,976,474 International 520,603 574,206 1,135,321 932,726 Total $ 7,476,872 $ 7,841,647 $ 15,853,936 $ 13,909,200 June 30, 2015 December 31, 2014 Property and equipment, net United States $ 1,663,608 $ 1,859,355 International - - Total $ 1,663,608 $ 1,859,355 June 30, 2015 December 31, 2014 Intangible assets, net United States $ 26,978 $ 39,050 International 145,917 177,897 Total $ 172,895 $ 216,947

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Jun. 30, 2015
INVENTORIES [Abstract]
Schedule of inventory, net of reserves	The Company’s total inventories, net of reserves, consisted of the following as of June 30, 2015 and December 31, 2014: June 30, 2015 December 31, 2014 Raw materials $ 6,267,519 $ 4,917,399 Work-in-process 5,784,961 6,292,679 Finished goods 23,795,375 27,985,067 Finished goods on consignment 210,279 677,484 Less inventory reserves (1,529,000 ) (934,000 ) Total $ 34,529,134 $ 38,938,629 Current portion $ 13,404,996 $ 13,320,639 Long-term portion 21,124,138 25,617,990 Total $ 34,529,134 $ 38,938,629

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Jun. 30, 2015
COMMITMENTS AND CONTINGENCIES [Abstract]
Future minimum payments under operating lease	As of June 30, 2015, the Company’s future minimum payments under the operating leases were as follows: 2015 $ 280,076 2016 569,138 2017 584,789 2018 600,871 2019 617,395 Thereafter 1,176,330 Total $ 3,828,599

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2015
STOCK- BASED COMPENSATION [Abstract]
Schedule for components of stock based compensation	The following table summarizes the components of the Company’s stock-based compensation included in net loss: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Employee stock options $ 119,990 $ 209,698 $ 306,461 $ 392,422 Consultant stock options 25,203 - 41,448 - Restricted stock awards 248,910 224,281 425,433 418,068 Income tax benefit - (78,349 ) - (146,046 ) Totals $ 394,103 $ 355,630 $ 773,342 $ 664,444
Summary of the stock option activity	The following is a summary of the stock option activity for the six months ended June 30, 2015: Shares Weighted Average Exercise Price Outstanding, December 31, 2014 1,665,946 $ 2.93 Granted 526,133 $ 1.39 Exercised (241,752 ) $ 0.71 Forfeited (90,856 ) $ 3.55 Expired (300,892 ) $ 2.96 Outstanding, June 30, 2015 1,558,579 $ 2.71
Weighted average assumptions for stock options granted	The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted average assumptions for stock options granted during the six months ended June 30, 2015: Dividend yield 0.0 % Expected volatility 65.7 % Risk-free interest rate 1.60 % Expected lives (years) 5.62
Information about stock options outstanding	The following table summarizes information about stock options outstanding at June 30, 2015: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 6/30/2015 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 6/30/2015 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 6/30/2015 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 1,558,579 7.84 $ 2.71 736,338 6.23 $ 3.26 1,486,036 7.77 $ 2.74
Restricted stock activity	The following is a summary of the restricted stock activity for the six months ended June 30, 2015: Shares Weighted Average Grant Date Fair Value Unvested, December 31, 2014 287,006 $ 3.29 Granted 487,500 $ 1.38 Vested (220,752 ) $ 2.58 Canceled - $ - Unvested, June 30, 2015 553,754 $ 1.89

NET LOSS PER COMMON SHARE (Tabl

NET LOSS PER COMMON SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
NET LOSS PER COMMON SHARE [Abstract]
Reconciliation of the differences between the basic and fully diluted earnings per share	The following table reconciles the differences between the basic and diluted earnings per share presentations: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net loss $ (4,047,536 ) $ (6,194,083 ) $ (5,726,987 ) $ (7,257,477 ) Denominator: Weighted average common shares outstanding: Basic 20,326,577 20,262,299 20,217,646 20,229,979 Stock options - - - - Fully diluted 20,326,577 20,262,299 20,217,646 20,229,979 Net loss per common share: Basic $ (0.20 ) $ (0.31 ) $ (0.28 ) $ (0.36 ) Diluted $ (0.20 ) $ (0.31 ) $ (0.28 ) $ (0.36 )

MAJOR CUSTOMERS AND CONCENTRA23

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)	6 Months Ended
	Jun. 30, 2015
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]
Summary of customers that represent greater than or equal to 10% of total gross sales	The following is a summary of customers that represent greater than or equal to 10% of total net accounts receivable: June 30, 2015 December 31, 2014 Customer A 59 % 28 % Customer B 14 % 11 % The following is a summary of customers that represent greater than or equal to 10% of total gross sales: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Customer A 43 % 36 % 33 % 30 % Customer B 1 % 4 % 9 % 13 % Customer C 0 % 15 % -2 % 17 %

SEGMENT INFORMATION AND GEOGR24

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)Segment	Jun. 30, 2014USD ($)	Dec. 31, 2014USD ($)
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Number of operating segments | Segment			3
Number of reportable segments | Segment			3
Summary information by segment [Abstract]
Net sales	$ 7,476,872	$ 7,841,647	$ 15,853,936	$ 13,909,200
Product line cost of goods sold	5,059,205	4,813,654	9,308,324	8,249,310
Product line gross profit	2,417,667	3,027,993	6,545,612	5,659,890
Operating loss	(4,043,526)	(2,040,928)	(5,720,003)	(3,211,431)
Depreciation and amortization	221,948	310,947	440,676	588,745
Capital expenditures	38,081	928,341	155,185	956,666
Total assets	47,240,276		47,240,276		$ 51,426,397
Cost of Goods Sold [Abstract]
Cost of goods sold	6,461,537	5,324,981	11,305,440	8,988,023
Inventories, net [Abstract]
Raw materials	6,267,519		6,267,519		4,917,399
Work-in-process	5,784,961		5,784,961		6,292,679
Supplies inventories	40,000		40,000		51,000
Loose Jewels [Member]
Summary information by segment [Abstract]
Net sales	3,766,308	4,010,339	7,587,438	7,691,025
Product line cost of goods sold	3,062,283	2,066,290	5,283,457	3,863,698
Product line gross profit	704,025	1,944,049	2,303,981	3,827,327
Inventories, net [Abstract]
Raw materials	6,103,326		6,103,326		4,658,692
Work-in-process	5,277,481		5,277,481		5,752,103
Finished goods	17,769,727		17,769,727		21,495,873
Finished goods on consignment	75,375		75,375		46,284
Total	29,225,909		29,225,909		31,952,952
Finished Jewelry [Member]
Summary information by segment [Abstract]
Net sales	3,710,564	3,831,308	8,266,498	6,218,175
Product line cost of goods sold	1,996,922	2,747,364	4,024,867	4,385,612
Product line gross profit	1,713,642	1,083,944	4,241,631	1,832,563
Inventories, net [Abstract]
Raw materials	164,193		164,193		258,707
Work-in-process	507,480		507,480		540,576
Finished goods	4,481,665		4,481,665		5,557,417
Finished goods on consignment	109,904		109,904		578,200
Total	5,263,242		5,263,242		6,934,900
Operating and Reporting Segments [Member] | Wholesale [Member]
Summary information by segment [Abstract]
Net sales	4,922,654	6,849,384	10,834,815	12,002,999
Product line cost of goods sold	4,244,644	4,418,659	7,674,557	7,473,895
Product line gross profit	678,010	2,430,725	3,160,258	4,529,104
Operating loss	(2,617,570)	(1,008,146)	(2,851,346)	(1,133,003)
Depreciation and amortization	163,209	214,021	323,849	393,693
Capital expenditures	35,636	928,341	145,200	956,666
Total assets	47,064,928		47,064,928		51,183,888
Operating and Reporting Segments [Member] | Wholesale [Member] | Loose Jewels [Member]
Summary information by segment [Abstract]
Net sales	3,628,160	3,837,012	7,316,034	7,370,756
Product line cost of goods sold	3,040,470	2,040,944	5,242,573	3,816,079
Product line gross profit	587,690	1,796,068	2,073,461	3,554,677
Operating and Reporting Segments [Member] | Wholesale [Member] | Finished Jewelry [Member]
Summary information by segment [Abstract]
Net sales	1,294,494	3,012,372	3,518,781	4,632,243
Product line cost of goods sold	1,204,174	2,377,715	2,431,984	3,657,816
Product line gross profit	90,320	634,657	1,086,797	974,427
Operating and Reporting Segments [Member] | Moissanite.com [Member]
Summary information by segment [Abstract]
Net sales	1,260,880	708,020	2,364,806	1,416,228
Product line cost of goods sold	555,407	311,925	1,054,838	629,083
Product line gross profit	705,473	396,095	1,309,968	787,145
Operating loss	(278,605)	(331,243)	(682,734)	(736,014)
Depreciation and amortization	31,987	71,093	63,694	144,252
Capital expenditures	0	0	533	0
Total assets	87,091		87,091		128,049
Operating and Reporting Segments [Member] | Moissanite.com [Member] | Loose Jewels [Member]
Summary information by segment [Abstract]
Net sales	138,148	171,819	271,404	318,761
Product line cost of goods sold	21,748	24,902	40,819	47,175
Product line gross profit	116,400	146,917	230,585	271,586
Operating and Reporting Segments [Member] | Moissanite.com [Member] | Finished Jewelry [Member]
Summary information by segment [Abstract]
Net sales	1,122,732	536,201	2,093,402	1,097,467
Product line cost of goods sold	533,659	287,023	1,014,019	581,908
Product line gross profit	589,073	249,178	1,079,383	515,559
Operating and Reporting Segments [Member] | Charles & Colvard Direct [Member]
Summary information by segment [Abstract]
Net sales	1,293,338	284,243	2,654,315	489,973
Product line cost of goods sold	259,154	83,070	578,929	146,332
Product line gross profit	1,034,184	201,173	2,075,386	343,641
Operating loss	(1,147,351)	(701,539)	(2,185,923)	(1,342,414)
Depreciation and amortization	26,752	25,833	53,133	50,800
Capital expenditures	2,445	0	9,452	0
Total assets	88,257		88,257		$ 114,460
Operating and Reporting Segments [Member] | Charles & Colvard Direct [Member] | Loose Jewels [Member]
Summary information by segment [Abstract]
Net sales	0	1,508	0	1,508
Product line cost of goods sold	65	444	65	444
Product line gross profit	(65)	1,064	(65)	1,064
Operating and Reporting Segments [Member] | Charles & Colvard Direct [Member] | Finished Jewelry [Member]
Summary information by segment [Abstract]
Net sales	1,293,338	282,735	2,654,315	488,465
Product line cost of goods sold	259,089	82,626	578,864	145,888
Product line gross profit	1,034,249	200,109	2,075,451	342,577
Segment Reconciling Items [Member]
Cost of Goods Sold [Abstract]
Non-capitalized manufacturing and production control expenses	500,460	256,144	647,572	411,167
Freight out	111,256	76,077	201,990	135,976
Inventory valuation allowances	411,000	45,000	615,000	69,000
Other inventory adjustments	$ 379,616	$ 134,106	$ 532,554	$ 122,570

SEGMENT INFORMATION AND GEOGR25

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Data by Geographic Area (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Net sales [Abstract]
Net sales	$ 7,476,872	$ 7,841,647	$ 15,853,936	$ 13,909,200
Property and Equipment, Net [Member]
Assets by geographical area [Abstract]
Total	1,663,608		1,663,608		$ 1,859,355
Intangible Assets, Net [Member]
Assets by geographical area [Abstract]
Total	172,895		172,895		216,947
Reportable Geographical Components [Member] | United States [Member]
Net sales [Abstract]
Net sales	6,956,269	7,267,441	14,718,615	12,976,474
Reportable Geographical Components [Member] | United States [Member] | Property and Equipment, Net [Member]
Assets by geographical area [Abstract]
Total	1,663,608		1,663,608		1,859,355
Reportable Geographical Components [Member] | United States [Member] | Intangible Assets, Net [Member]
Assets by geographical area [Abstract]
Total	26,978		26,978		39,050
Reportable Geographical Components [Member] | International [Member]
Net sales [Abstract]
Net sales	520,603	$ 574,206	1,135,321	$ 932,726
Reportable Geographical Components [Member] | International [Member] | Property and Equipment, Net [Member]
Assets by geographical area [Abstract]
Total	0		0		0
Reportable Geographical Components [Member] | International [Member] | Intangible Assets, Net [Member]
Assets by geographical area [Abstract]
Total	$ 145,917		$ 145,917		$ 177,897

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Total inventories, net of reserves [Abstract]
Raw materials	$ 6,267,519	$ 4,917,399
Work-in-process	5,784,961	6,292,679
Finished goods	23,795,375	27,985,067
Finished goods on consignment	210,279	677,484
Less inventory reserves	(1,529,000)	(934,000)
Total	34,529,134	38,938,629
Current portion	13,404,996	13,320,639
Long-term portion	$ 21,124,138	25,617,990
Period considered for classification of long term inventory	12 months
Work-in-process inventories issued to active production jobs	$ 1,400,000	2,050,000
Sale of slow moving loose jewel inventory of less desirable quality	2,280,000
Lower of cost or market reserve	103,000
Inventory reserve for obsolescence	536,000	250,000
Carrying value of inventory reserve for obsolescence of moissanite	86,000	31,000
Shrinkage reserve for finished goods on consignment	25,000	53,000
Inventory of net loose jewels	29,230,000	31,950,000
Inventory reserve for shrinkage of loose jewels	142,000	17,000
Inventory reserve for shrinkage of loose jewels on consignment	8,000	17,000
Inventory reserve for recuts	366,000	216,000
Inventory of net jewelry	5,260,000	6,930,000
Scrap reserve	66,000	101,000
Inventory reserve for shrinkage of finished jewelry	167,000	192,000
Inventory reserve for shrinkage of finished jewelry on consignment	17,000	36,000
Inventory reserve for shrinkage of finished jewelry on repairs	$ 63,000	$ 127,000

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
INCOME TAXES [Abstract]
Income tax expense (benefit)	$ 3,243	$ 4,152,987	$ 6,336	$ 4,045,777
Income tax expense for estimated tax, penalties, and interest for other uncertain tax positions	$ 3,000	$ 3,000	$ 6,000	$ 6,000

COMMITMENTS AND CONTINGENCIES28

COMMITMENTS AND CONTINGENCIES (Details)	Dec. 12, 2014USD ($)Option	Dec. 09, 2013ft²	Jun. 30, 2015USD ($)ft²	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)ft²	Jun. 30, 2014USD ($)	May. 23, 2014USD ($)	Oct. 31, 2013USD ($)
Lease Commitments [Abstract]
Period of lease					7 years
Land subject to leases (in square feet) | ft²		36,350	16,500		16,500
Number of months included in costs to terminate lease					2 months
Cost to terminate lease								$ 112,000
Leasehold improvements offered by landlord							$ 550,000
Lease signing and moving incentives offered by landlord							$ 73,000
Period for which rent is abated		7 months
Future minimum payments under operating lease [Abstract]
2,015			$ 280,076		$ 280,076
2,016			569,138		569,138
2,017			584,789		584,789
2,018			600,871		600,871
2,019			617,395		617,395
Thereafter			1,176,330		1,176,330
Total			3,828,599		3,828,599
Rent expense			128,000	$ 84,000	$ 255,000	$ 115,000
Purchase Commitments [Abstract]
Period of exclusive supply agreement	2 years				10 years
Percentage committed to be purchased (in hundredths)	100.00%				50.00%
Number of option to unilaterally extend the term | Option	1
Minimum purchase commitment in initial new order	$ 29,600,000		4,000,000		$ 4,000,000
Maximum purchase commitment in initial new order	$ 31,500,000
Minimum purchase commitment under the amendment			7,640,000		7,640,000
Maximum purchase commitment under amendment			$ 18,560,000		18,560,000
Actual purchases under purchase amendment					$ 3,050,000	$ 3,580,000

LINE OF CREDIT (Details)

LINE OF CREDIT (Details) - USD ($)	Jun. 25, 2014	Sep. 20, 2013	Jun. 30, 2015
PNC Bank [Member] | Line of Credit Note [Member]
Line of Credit Facility [Line Items]
Revolving line of credit		$ 10,000,000
Line of credit maturity date		Jun. 15, 2015
Line of credit, description of variable rate basis		One-month LIBOR rate
Basis for calculation of LIBOR rate (adjusted daily)		actual / 360
PNC Bank [Member] | LIBOR [Member] | Line of Credit Note [Member]
Line of Credit Facility [Line Items]
Line of credit, spread on variable rate (in hundredths)		1.50%
Wells Fargo [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	$ 10,000,000
Line of credit maturity date	Jun. 25, 2017
Line of credit, description of variable rate basis			Wells Fargo’s 3-month LIBOR rate
Basis for calculation of LIBOR rate (adjusted daily)			actual / 360
Legal fees	$ 19,000
Line of credit facility, sublimit for letter of credit	$ 1,000,000
Line of credit facility, sublimit for advances			$ 5,000,000
Percentage of advances, guaranteed by bank (in hundredths)			90.00%
Maximum advances against inventory			$ 3,000,000
Minimum excess availability of inventory at all times required for advances			$ 1,000,000
Interest rate in event of default in excess of standard rate (in hundredths)			3.00%
Prepaid advance fee for reduction in first year after closing (in hundredths)			2.00%
Prepaid advance fee for reduction in Second year after closing (in hundredths)			1.00%
Prepaid advance fee for reduction, thereafter (in hundredths)			0.00%
Number of business day within which guaranteed advances to be repaid			2 days
Maximum indebtedness to be maintained in the event of default to avoid triggering of default terms			$ 200,000
Advances against line of credit			$ 0
Wells Fargo [Member] | LIBOR [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit, spread on variable rate (in hundredths)			2.50%

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Components of the Company's stock based compensation included in net income [Abstract]
Income tax benefit	$ 0	$ (78,349)	$ 0	$ (146,046)
Totals	394,103	355,630	773,342	664,444
Employee Stock Options [Member]
Components of the Company's stock based compensation included in net income [Abstract]
Allocated share-based compensation expense	119,990	209,698	306,461	392,422
Stock-based compensation capitalized as a cost of inventory	$ 0	0	$ 0	0
Shares [Roll Forward]
Outstanding, December 31, 2014			1,665,946
Granted (in shares)			526,133
Exercised (in shares)			(241,752)
Forfeited (in shares)			(90,856)
Expired (in shares)			(300,892)
Outstanding, June 30, 2015	1,558,579		1,558,579
Weighted Average Exercise Price [Roll Forward]
Outstanding, December 31, 2014 (in dollars per share)			$ 2.93
Granted (in dollars per share)			1.39
Exercised (in dollars per share)			0.71
Forfeited (in dollars per share)			3.55
Expired (in dollars per share)			2.96
Outstanding, June 30, 2015 (in dollars per share)	$ 2.71		2.71
Fair value of stock options (in dollars per share)			$ 0.77
Fair value of stock options vested			$ 392,000
Weighted average assumptions for stock options [Abstract]
Dividend yield (in hundredths)			0.00%
Expected volatility (in hundredths)			65.70%
Risk-free interest rate (in hundredths)			1.60%
Expected lives			5 years 7 months 13 days
Options Outstanding [Abstract]
Balance as of 6/30/2015 (in shares)	1,558,579		1,665,946
Weighted Average Remaining Contractual Life (Years)			7 years 10 months 2 days
Weighted Average Exercise Price (in dollars per share)	$ 2.71		$ 2.93
Options Exercisable [Abstract]
Balance as of 6/30/2015 (in shares)	736,338
Weighted Average Remaining Contractual Life (Years)			6 years 2 months 23 days
Weighted Average Exercise Price (in dollars per share)	$ 3.26
Options Vested or Expected to Vest [Abstract]
Balance as of 6/30/2015 (in shares)	1,486,036
Weighted Average Remaining Contractual Life (Years)			7 years 9 months 7 days
Weighted Average Exercise Price (in dollars per share)	$ 2.74
Unrecognized stock-based compensation expense related to unvested awards	$ 942,000
Total compensation cost not yet recognized, period for recognition			19 months
Aggregate intrinsic value of stock options outstanding	118,000
Aggregate intrinsic value of stock options exercisable	38,000
Aggregate intrinsic value of stock options vested and expected to vest	111,000
Aggregate intrinsic value of stock options exercised	169,000		$ 167,000
Restricted Stock [Member]
Components of the Company's stock based compensation included in net income [Abstract]
Allocated share-based compensation expense	248,910	224,281	$ 425,433	418,068
Options Vested or Expected to Vest [Abstract]
Unrecognized stock-based compensation expense related to unvested awards	$ 807,000
Total compensation cost not yet recognized, period for recognition			10 months
Shares [Roll Forward]
Unvested, December 31, 2014 (in shares)			287,006
Granted (in shares)			487,500
Vested (in shares)			(220,752)
Canceled (in shares)			0
Unvested, June 30, 2015 (in shares)	553,754		553,754
Weighted Average Grant Date Fair Value [Roll Forward]
Unvested, December 31, 2014 (in dollars per share)			$ 3.29
Granted (in dollars per share)			1.38
Vested (in dollars per share)			2.58
Canceled (in dollars per share)			0
Unvested, June 30, 2015 (in dollars per share)	$ 1.89		$ 1.89
Consultant Stock Options [Member]
Components of the Company's stock based compensation included in net income [Abstract]
Allocated share-based compensation expense	$ 25,203	$ 0	$ 41,448	$ 0

NET LOSS PER COMMON SHARE (Deta

NET LOSS PER COMMON SHARE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator [Abstract]
Net loss	$ (4,047,536)	$ (6,194,083)	$ (5,726,987)	$ (7,257,477)
Weighted average common shares outstanding [Abstract]
Basic (in shares)	20,326,577	20,262,299	20,217,646	20,229,979
Stock options (in shares)	0	0	0	0
Fully diluted (in shares)	20,326,577	20,262,299	20,217,646	20,229,979
Net loss per common share [Abstract]
Basic (in dollars per share)	$ (0.20)	$ (0.31)	$ (0.28)	$ (0.36)
Diluted (in dollars per share)	$ (0.20)	$ (0.31)	$ (0.28)	$ (0.36)
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options to purchase shares and non vested restricted shares (in shares)	1,560,000	1,370,000	1,560,000	1,370,000

MAJOR CUSTOMERS AND CONCENTRA32

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Concentration Risk [Line Items]
Insurance coverage per depositor at each financial institution			$ 250,000
Interest-bearing amounts on deposit in excess of FDIC insurable limits	$ 4,940,000		4,940,000		$ 3,700,000
Increase in allowance for doubtful accounts			$ 815,000
Minimum [Member]
Concentration Risk [Line Items]
Period of customer payments on trade receivables			30 days
Maximum [Member]
Concentration Risk [Line Items]
Period of customer payments on trade receivables			90 days
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)			59.00%		28.00%
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)			14.00%		11.00%
Total Gross Sales [Member]
Concentration Risk [Line Items]
Percentage of gross sales used as benchmark (in hundredths)			10.00%
Total Gross Sales [Member] | Customer Concentration Risk [Member] | Customer A [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	43.00%	36.00%	33.00%	30.00%
Total Gross Sales [Member] | Customer Concentration Risk [Member] | Customer B [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	1.00%	4.00%	9.00%	13.00%
Total Gross Sales [Member] | Customer Concentration Risk [Member] | Customer C [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	0.00%	15.00%	(2.00%)	17.00%