Charles & Colvard (CTHR) 10-K 9 Mar 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 02, 2018	Jun. 30, 2017
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 Public Float			$ 17,068,461
Entity Common Stock, Shares Outstanding		21,575,673
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2017

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 4,594,007	$ 7,427,273
Accounts receivable, net	3,377,451	2,794,626
Inventory, net	11,208,658	9,770,206
Prepaid expenses and other assets	969,857	682,083
Total current assets	20,149,973	20,674,188
Long-term assets:
Inventory, net	19,764,959	18,360,211
Property and equipment, net	1,242,200	1,391,116
Intangible assets, net	8,597	8,808
Other assets	64,978	71,453
Total long-term assets	21,080,734	19,831,588
TOTAL ASSETS	41,230,707	40,505,776
Current liabilities:
Accounts payable	4,466,163	3,977,149
Accrued expenses and other liabilities	980,800	631,107
Total current liabilities	5,446,963	4,608,256
Long-term liabilities:
Deferred rent	463,526	594,916
Accrued income taxes	461,592	433,983
Total long-term liabilities	925,118	1,028,899
Total liabilities	6,372,081	5,637,155
Commitments and contingencies (Note 9)
Shareholders' equity:
Common stock, no par value; 50,000,000 shares authorized; 21,580,102 and 21,369,885 shares issued and outstanding at December 31, 2017 and 2016, respectively	54,243,816	54,243,816
Additional paid-in capital	14,726,438	14,282,956
Accumulated deficit	(34,111,628)	(33,658,151)
Total shareholders' equity	34,858,626	34,868,621
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 41,230,707	$ 40,505,776

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Shareholders' equity
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	21,580,102	21,369,885
Common stock, shares outstanding (in shares)	21,580,102	21,369,885

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 27,032,964	$ 29,168,128
Costs and expenses:
Cost of goods sold	15,470,617	20,401,439
Sales and marketing	7,477,354	7,038,277
General and administrative	4,689,823	5,544,452
Research and development	3,714	2,848
Loss on abandonment of property and equipment	0	117,930
Total costs and expenses	27,641,508	33,104,946
Loss from operations	(608,544)	(3,936,818)
Other income (expense):
Interest expense	(541)	(1,737)
Gain on insurance claim settlement	183,217	0
Total other income (expense), net	182,676	(1,737)
Loss before income taxes from continuing operations	(425,868)	(3,938,555)
Income tax net expense from continuing operations	(27,609)	(13,480)
Net loss from continuing operations	(453,477)	(3,952,035)
Discontinued Operations:
Loss from discontinued operations	0	(586,124)
Gain on sale of assets from discontinued operations	0	12,398
Net loss from discontinued operations	0	(573,726)
Net loss	$ (453,477)	$ (4,525,761)
Net loss per common share:
Basic - continuing operations (in dollars per share)	$ (0.02)	$ (0.19)
Basic - discontinued operations (in dollars per share)	0	(0.03)
Basic - total (in dollars per share)	(0.02)	(0.22)
Diluted - continuing operations (in dollars per share)	(0.02)	(0.19)
Diluted - discontinued operations (in dollars per share)	0	(0.03)
Diluted - total (in dollars per share)	$ (0.02)	$ (0.22)
Weighted average number of shares used in computing net loss per common share:
Basic (in shares)	21,193,793	20,926,120
Diluted (in shares)	21,193,793	20,926,120

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2015	$ 54,240,247	$ 13,280,920	$ (29,132,390)	$ 38,388,777
Balance (in shares) at Dec. 31, 2015	21,111,585
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	$ 0	1,003,305	0	1,003,305
Issuance of restricted stock	$ 0	0	0	0
Issuance of restricted stock (in shares)	255,800
Stock option exercises	$ 3,569	(1,269)	0	2,300
Stock option exercises (in shares)	2,500
Net loss	$ 0	0	(4,525,761)	(4,525,761)
Balance at Dec. 31, 2016	$ 54,243,816	14,282,956	(33,658,151)	34,868,621
Balance (in shares) at Dec. 31, 2016	21,369,885
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	$ 0	443,482	0	443,482
Issuance of restricted stock	$ 0	0	0	0
Issuance of restricted stock (in shares)	210,217
Net loss	$ 0	0	(453,477)	(453,477)
Balance at Dec. 31, 2017	$ 54,243,816	$ 14,726,438	$ (34,111,628)	$ 34,858,626
Balance (in shares) at Dec. 31, 2017	21,580,102

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (453,477)	$ (4,525,761)
Net loss from discontinued operations	0	(573,726)
Net loss from continuing operations	(453,477)	(3,952,035)
Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities of continuing operations:
Depreciation and amortization	422,018	557,393
Stock-based compensation	443,482	959,134
Provision for uncollectible accounts	28,000	(73,300)
Provision for sales returns	122,000	(316,000)
Provision for inventory reserves	598,000	200,000
Gain on insurance claim settlement	(183,217)	0
Loss on abandonment of property and equipment	0	117,930
Changes in operating assets and liabilities:
Accounts receivable	(732,825)	1,447,325
Inventory	(3,503,032)	3,998,003
Prepaid expenses and other assets, net	(36,250)	162,157
Accounts payable	489,014	654,001
Deferred rent	(131,390)	(99,656)
Accrued income taxes	27,609	13,480
Accrued expenses and other liabilities	349,693	(333,731)
Net cash (used in) provided by operating activities of continuing operations	(2,560,375)	3,334,701
Net cash used in operating activities of discontinued operations	0	(1,125,578)
Net cash (used in) provided by operating activities	(2,560,375)	2,209,123
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(271,390)	(421,761)
Intangible assets	(1,501)	(5,615)
Proceeds from sale of long-term assets	0	250
Net cash used in investing activities of continuing operations	(272,891)	(427,126)
Net cash provided by investing activities of discontinued operations	0	368,671
Net cash used in investing activities	(272,891)	(58,455)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock option exercises	0	2,300
Net cash provided by financing activities of continuing operations	0	2,300
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(2,833,266)	2,152,968
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	7,427,273	5,274,305
CASH AND CASH EQUIVALENTS, END OF PERIOD	4,594,007	7,427,273
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$ 541	$ 1,737

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	12 Months Ended
	Dec. 31, 2017
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 ® In February 2016, the Company made the strategic decision to explore a potential divestiture of its direct-to-consumer home party business previously operated through its Charles & Colvard Direct, LLC (dba Lulu Avenue ®

BASIS OF PRESENTATION AND SIGNI

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2017
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 - All intercompany accounts have been eliminated. Change in Fiscal Year-End – Discontinued Operations - Use of Estimates - T “ ” Reclassifications - Cash and Cash Equivalents - Concentration of Credit Risk - Trade receivables potentially subject the Company to credit risk. Payment terms on trade receivables for the Company’s Traditional segment customers are generally between 30 and 120 days, though it may offer extended terms with specific customers and on significant orders from time to time. The Company believes its competitors and other vendors in the wholesale jewelry industry have also expanded their use of extended payment terms and, in aggregate, the Company believes that by expanding its use of extended payment terms, it has provided a competitive response in its market and that its net sales have been favorably impacted. The Company is unable to estimate the impact of this program on its net sales, but if it ceased providing extended payment terms in select instances, the Company believes it would not be competitive for some Traditional segment customers in the marketplace and that its net sales and profits would likely decrease. 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 that is verified through trade association reference services, 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. Collateral is not generally required from customers. The need for an allowance for doubtful accounts is determined based upon factors surrounding the credit risk of specific customers, historical trends, and other information. During the year ended December 31, 2016, the Company wrote off $815,000 in accounts receivable related to one international customer that was past due on its payment arrangement as it determined that the benefits of continued collections efforts did not outweigh the cost of legal proceedings. The Company does not believe its commercial terms were a factor with this customer’s non-payment. The Company’s allowance for doubtful accounts previously included an allowance for this accounts receivable, and therefore, this write-off did not have an impact on net loss for the year ended December 31, 2016. The Company has not experienced any other significant accounts receivable write-offs related to revenue arrangements with extended payment terms. See Note 14, “Major Customers and Concentration of Credit Risk”, for further discussion of credit risk within trade accounts receivable. Accounts Receivable Reserves - The following is a reconciliation of the allowance for sales returns: Year Ended December 31, 2017 2016 Balance, beginning of year $ 415,000 $ 731,000 Additions charged to operations 3,878,736 3,574,297 Sales returns (3,756,736 ) (3,890,297 ) Balance, end of year $ 537,000 $ 415,000 The second reserve is an allowance for doubtful accounts for estimated losses resulting from the failure of the Company’s customers to make required payments. This allowance reduces trade accounts receivable to an amount expected to be collected. Based on historical percentages of uncollectible accounts by aging category, changes in payment history, and facts and circumstances regarding specific accounts that become known to management when evaluating the adequacy of the allowance for doubtful accounts, the Company determines a percentage based on the age of the receivable that it deems uncollectible. The allowance is then calculated by applying the appropriate percentage to each of the Company’s accounts receivable aging categories, with consideration given to individual customer account activity subsequent to the current period, including cash receipts, in determining the appropriate allowance for doubtful accounts in the current period. Any increases or decreases to this allowance are charged or credited, respectively, as a bad debt expense to general and administrative expenses. The Company generally uses an internal collection effort, which may include its sales personnel as it deems appropriate. After all internal collection efforts have been exhausted, the Company generally writes off the account receivable. Any accounts with significant balances are reviewed separately to determine an appropriate allowance based on the facts and circumstances of the specific account. During the quarter ended September 30, 2016, the Company wrote off $815,000 in accounts receivable related to one international customer that was past due on its payment arrangement, as the Company determined that the benefits of continued collections efforts did not outweigh the costs of legal proceedings. The Company’s allowance for doubtful accounts previously included an allowance for this accounts receivable, and therefore, this write-off did not have an impact on net loss for the year ended December 31, 2016. During its review for 2017 and 2016, the Company determined no additional reserves were necessary for specific accounts. Based on these criteria, management determined that allowances for doubtful accounts receivable of $254,000 and $226,000 at December 31, 2017 and 2016, respectively, were required. The following is a reconciliation of the allowance for doubtful accounts: Year Ended December 31, 2017 2016 Balance, beginning of year $ 226,000 $ 1,137,000 Additions (reductions) charged to operations 28,000 (73,300 ) Write-offs, net of recoveries - (837,000 ) Balance, end of year $ 254,000 $ 226,000 Although the Company believes that its reserves are adequate, if the financial condition of its customers deteriorates, resulting in an impairment of their ability to make payments, or if it underestimates the allowances required, additional allowances may be necessary, which would result in increased expense in the period in which such determination is made. Inventories - Inventory costs include direct material and labor, inbound freight, purchasing and receiving costs, inspection costs, and warehousing costs. Property and Equipment - Machinery and equipment 5 to 12 years Computer hardware 3 to 5 years Computer software 3 years Furniture and fixtures 5 to 10 years Leasehold improvements Shorter of the estimated useful life or the lease term Intangible Assets - Impairment of Long-Lived Assets - whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount exceeds the fair value and is recognized as an operating expense in the period in which the determination is made. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell. As of December 31, 2017, the Company did not identify any indicators of long-lived asset impairment. In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of its long-lived assets. Any reduction in the useful-life assumption will result in increased depreciation and amortization expense in the period when such determination is made, as well as in subsequent periods. Revenue Recognition - Cost of Goods Sold - Advertising Costs - The Company also offers a cooperative advertising program to certain of its distributor and retail partners that reimburses, via a credit towards future purchases, a portion of their marketing costs based on the customers’ net purchases from the Company and is subject to the customer providing documentation of all advertising performed that includes the Company’s products. For the years ended December 31, 2017 and 2016, these approximate amounts were an expense of $210,000 and $126,000, respectively, and are included as a component of sales and marketing expenses. Advertising expenses, inclusive of the cooperative advertising program, for the years ended December 31, 2017 and 2016 were approximately $1.94 million and $2.59 million, respectively. Approximately $56,000 related to discontinued operations was included in total advertising expense for the year ended December 31, 2016. Sales and Marketing - charlesandcolvard.com, LLC, wholly owned operating subsidiary. General and Administrative - Research and Development - Stock-Based Compensation - The Company recognizes compensation expense for stock-based awards based on estimated fair values on the date of grant. Fair value of stock options using the Black-Scholes-Merton option pricing model is estimated on the date of grant utilizing certain assumptions for dividend yield, expected volatility, risk-free interest rate, and expected lives of the awards, as follows: · Dividend yield - · Expected volatility - · Risk-free interest rate - · Expected lives - The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rates of stock-based awards and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rates, the Company analyzed its historical forfeiture rates, the remaining lives of unvested stock-based awards, and the amount of vested awards as a percentage of total awards outstanding. If the Company’s actual forfeiture rates are materially different from its estimates, or if the Company re-evaluates the forfeiture rates in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period. Income Taxes - In light of the newly enacted Tax Cuts and Jobs Act, or the Tax Act, the Company has provisionally recorded its U.S. deferred taxes based on the Federal corporate income tax rate of 21%. The Company is continuing to analyze aspects of the Tax Act and, therefore, has not finalized its accounting policy with respect to accounting for deferred income taxes. For further discussion of the effects of the Tax Act on our deferred tax assets, see Note 12, “Income Taxes”. Net Loss per Common Share - The following table reconciles the differences between the basic and diluted net loss per share presentations: Year Ended December 31, 2017 2016 Numerator: Net loss from continuing operations $ (453,477 ) $ (3,952,035 ) Net loss from discontinued operations - (573,726 ) Net loss $ (453,477 ) $ (4,525,761 ) Denominator: Weighted average common shares outstanding: Basic 21,193,793 20,926,120 Stock options - - Diluted 21,193,793 20,926,120 Net loss per common share: Basic-continuing operations $ (0.02 ) $ (0.19 ) Basic-discontinued operations - (0.03 ) Basic-total $ (0.02 ) $ (0.22 ) Diluted-continuing operations $ (0.02 ) $ (0.19 ) Diluted-discontinued operations - (0.03 ) Diluted-total $ (0.02 ) $ (0.22 ) For the years ended December 31, 2017 and 2016, stock options to purchase approximately 2.23 million and 2.13 million shares, respectively, 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 anti-dilutive to net loss per common share. For the years ended December 31, 2017 and 2016, 370,000 and 359,000, respectively, of restricted shares that have been issued but not yet vested have been excluded from the computation of diluted net loss per common share. Recently Adopted/Issued Accounting Pronouncements - In February 2016, the FASB issued guidance that establishes a right-of-use, or ROU, model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the statement of operations. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the early stage of its analysis, but currently expects that upon adoption of this standard, ROU assets and liabilities will be recognized in the balance sheet in amounts that will be material.

SEGMENT INFORMATION AND GEOGRAP

SEGMENT INFORMATION AND GEOGRAPHIC DATA	12 Months Ended
	Dec. 31, 2017
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. Previously, the Company managed its business through two operating and reportable segments: wholesale distribution transacted through the parent entity, and the direct-to-consumer distribution channel transacted through the Company’s wholly owned operating subsidiary, charlesandcolvard.com, LLC (formerly Moissanite.com, LLC). During the first quarter of 2017, the Company began managing its business through two newly defined operating and reportable segments based on its distribution channels to sell its product lines, loose jewels and finished jewelry: its “Traditional” segment, which consists of wholesale, retail, and television customers; and its “Online Channels” segment, which consists of e-commerce outlets including charlesandcolvard.com, marketplaces, drop-ship, and other pure-play, exclusively e-commerce outlets. The accounting policies of the Traditional segment and Online Channels segment are the same as those described in Note 2, “Basis of Presentation and Significant Accounting Policies.” The Company evaluates the financial performance of its segments based on net sales; product line gross profit, or the excess of product line sales over product line cost of goods sold; and operating income (loss). The Company’s product line cost of goods sold is defined as product cost of goods sold, excluding non-capitalized expenses from the Company’s manufacturing and production control departments, comprising personnel costs, depreciation, rent, utilities, and corporate overhead allocations; freight out; inventory valuation allowance adjustments; and other inventory adjustments, comprising costs of quality issues, damaged goods, and inventory write-downs. The Company allocates certain general and administrative expenses from its Traditional segment to its Online Channels segment primarily based on net sales and number of employees to arrive at segment operating loss. Unallocated expenses, which also include interest and taxes, remain in its Traditional segment. Summary financial information by reportable segment is as follows: Year Ended December 31, 2017 Traditional Online Channels Total Net sales Loose jewels $ 13,430,776 $ 3,149,972 $ 16,580,748 Finished jewelry 2,515,443 7,936,773 10,452,216 Total $ 15,946,219 $ 11,086,745 $ 27,032,964 Product line cost of goods sold Loose jewels $ 6,998,485 $ 1,526,358 $ 8,524,843 Finished jewelry 1,610,845 3,615,815 5,226,660 Total $ 8,609,330 $ 5,142,173 $ 13,751,503 Product line gross profit Loose jewels $ 6,432,291 $ 1,623,614 $ 8,055,905 Finished jewelry 904,598 4,320,958 5,225,556 Total $ 7,336,889 $ 5,944,572 $ 13,281,461 Operating (loss) income $ (836,797 ) $ 228,253 $ (608,544 ) Depreciation and amortization $ 300,308 $ 121,711 $ 422,018 Capital expenditures $ 123,944 $ 147,446 $ 271,390 Year Ended December 31, 2016 Traditional Online Channels Total Net sales Loose jewels $ 19,231,534 $ 2,220,194 $ 21,451,728 Finished jewelry 1,075,157 6,641,243 7,716,400 Total $ 20,306,691 $ 8,861,437 $ 29,168,128 Product line cost of goods sold Loose jewels $ 13,107,366 $ 809,383 $ 13,916,749 Finished jewelry 1,195,640 2,953,148 4,148,788 Total $ 14,303,006 $ 3,762,531 $ 18,065,537 Product line gross profit (loss) Loose jewels $ 6,124,168 $ 1,410,811 $ 7,534,979 Finished jewelry (120,483 ) 3,688,095 3,567,612 Total $ 6,003,685 $ 5,098,906 $ 11,102,591 Operating loss $ (3,089,559 ) $ (847,259 ) $ (3,936,818 ) Depreciation and amortization $ 479,517 $ 77,876 $ 557,393 Capital expenditures $ 158,702 $ 263,059 $ 421,761 The Company does not allocate any assets to the reportable segments, and therefore, no asset information is reported to the chief operating decision-maker or disclosed in the financial information for each segment. A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the consolidated financial statements is as follows: Year Ended December 31, 2017 2016 Product line cost of goods sold $ 13,751,503 $ 18,065,537 Non-capitalized manufacturing and production control expenses 1,352,311 1,427,924 Freight out 417,074 376,726 Inventory valuation allowances 598,000 200,000 Other inventory adjustments (648,271 ) 331,252 Cost of goods sold $ 15,470,617 $ 20,401,439 The Company recognizes sales by geographic area based on the country in which the customer is based. A portion of the Company’s Traditional segment sales made to international wholesale distributors represents products sold internationally that may be re-imported to U.S. retailers. Sales to international end consumers made by the Company’s Online Channels segment 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. All intangible assets and property and equipment as of December 31, 2017 and December 31, 2016 are held and located in the United States. The following presents net sales data by geographic area: Year Ended December 31, 2017 2016 Net sales United States $ 25,176,220 $ 26,164,660 International 1,856,744 3,003,468 Total $ 27,032,964 $ 29,168,128

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	12 Months Ended
	Dec. 31, 2017
FAIR VALUE MEASUREMENTS [Abstract]
FAIR VALUE MEASUREMENTS	4. FAIR VALUE MEASUREMENTS Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party would use in pricing an asset or liability. The fair value hierarchy consists of three levels based on the reliability of inputs, as follows: · 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 financial instruments identified as subject to fair value measurements on a recurring basis are cash and cash equivalents, trade accounts receivable, and trade accounts payable. All financial instruments are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these financial 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. As of December 31, 2017 and December 31, 2016, no assets were identified for impairment. Level 3 inputs are primarily based on the estimated future cash flows of the asset determined by market inquiries to establish fair market value of used machinery or future revenue expected to be generated with the assistance of patents and trademarks.

INVENTORIES

INVENTORIES	12 Months Ended
	Dec. 31, 2017
INVENTORIES [Abstract]
INVENTORIES	5. INVENTORIES The Company’s total inventories, net of reserves, are as follows as of the dates presented: December 31, 2017 2016 Raw materials $ 4,853,049 $ 3,106,617 Work-in-process 9,219,383 11,048,126 Finished goods 17,896,992 15,057,668 Finished goods on consignment 1,093,752 467,778 Supplies inventory 75,441 17,228 Less inventory reserves (2,165,000 ) (1,567,000 ) Total $ 30,973,617 $ 28,130,417 Short-term portion $ 11,208,658 $ 9,770,206 Long-term portion 19,764,959 18,360,211 Total $ 30,973,617 $ 28,130,417 Inventories are stated at the lower of cost or net realizable value on an average cost basis. Inventory costs include direct material and labor, inbound freight, purchasing and receiving costs, inspection costs, and warehousing costs. Any inventory on hand at the measurement date in excess of the Company’s current requirements based on historical and anticipated levels of sales is classified as long-term on the Company’s consolidated balance sheets. The Company’s classification of its inventory as either short- or long-term inventory requires it to estimate the portion of on-hand inventory that can be realized over the next 12 months and does not include precious metal, labor, and other inventory purchases expected to be both purchased and realized in cost of goods sold over the next 12 months. 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 December 31, 2017 and 2016, work-in-process inventories issued to active production jobs approximated $2.99 million and $7.18 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 had the exclusive right in the U.S. through August 2015 and had the exclusive right in many other countries into the third quarter of 2016 to produce and sell created SiC for use in jewelry applications. 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 over time. The majority of the Company’s finished jewelry featuring moissanite is held in inventory for resale and largely consists of such core 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 holds smaller quantities of designer-inspired and trend moissanite fashion jewelry that is available for resale through retail companies and through its Online Channels segment. The Company also carries a limited amount of inventory as part of its sample line that is used in the selling process to its customers. The Company’s continuing operating subsidiary carries 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. Prior to March 2016, the Company purchased fashion finished jewelry comprising base metals and non-precious gemstones for sale through Lulu Avenue ® The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2017 December 31, 2016 Loose jewels Raw materials $ 4,288,360 $ 2,586,045 Work-in-process 8,328,719 10,589,424 Finished goods 9,487,245 9,455,393 Finished goods on consignment 26,281 5,473 Total loose jewels $ 22,130,605 $ 22,636,335 Finished jewelry Raw materials $ 564,689 $ 520,572 Work-in-process 890,664 458,702 Finished goods 6,304,747 4,081,275 Finished goods on consignment 1,007,471 416,305 Total finished jewelry 8,767,571 5,476,854 Total supplies inventory 75,441 17,228 Total inventory $ 30,973,617 $ 28,130,417 Total net loose jewel inventories at December 31, 2017 and December 31, 2016, including inventory on consignment net of reserves, were $22.13 million and $22.64 million, respectively. Total net finished jewelry inventories at December 31, 2017 and December 31, 2016, including inventory on consignment net of reserves and finished jewelry featuring moissanite manufactured by the Company, were $8.77 million and $5.48 million, respectively. As of December 31, 2017 and December 31, 2016, management established an obsolescence reserve of $1,417,000 and $944,000, respectively. Typically, in the jewelry industry, slow-moving or discontinued lines are sold as closeouts or liquidated in alternative sales channels. During the year ended December 31, 2016, management identified an opportunity to sell approximately $6.77 million of legacy loose jewel inventory of less desirable quality. The Company had no bulk sales of such inventory during the year ended December 31, 2017. Regularly, management reviews the legacy loose jewel inventory for any lower of cost or net realizable value and obsolescence issues. Accordingly, based on demand during the year ended December 31, 2017, and ongoing feedback from customers on the value of some of these goods, management identified some of the remaining inventory of these lower quality goods that could not be sold at its current carrying value and increased the lower of cost or net realizable value reserve on this remaining inventory to approximately $1,326,000 as of December 31, 2017 from $517,000 as of December 31, 2016. As of December 31, 2017 and December 31, 2016, management identified certain finished jewelry that was obsolete due to damage and other factors that indicate the finished jewelry is unsaleable, and established an obsolescence reserve of $91,000 and $427,000, respectively, for the carrying costs in excess of any estimated scrap values. Management reviews the finished jewelry inventory on an ongoing basis for any lower of cost or net realizable value and obsolescence issues. As of December 31, 2017 and December 31, 2016 management established a rework reserve for recut and repairs of $557,000 and $454,000, respectively. Loose jewel inventories at December 31, 2017 and December 31, 2016 included recut reserves of $468,000 and $425,000, respectively. The finished jewelry inventories at December 31, 2017 and December 31, 2016 include a repairs reserve of $89,000 and $29,000, respectively. As of December 31, 2017 and December 31, 2016 management established a shrinkage reserve of $191,000 and $169,000, respectively. The loose jewel inventories at December 31, 2017 and December 31, 2016 include shrinkage reserves of $18,000 and $67,000, respectively. The finished jewelry inventories at December 31, 2017 and December 31, 2016 include shrinkage reserves of $173,000 and $102,000, respectively. Periodically, the Company ships finished goods inventory to certain Traditional segment 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. Included in the total shrinkage reserve is the shrinkage reserve for finished goods on consignment of $60,000 and $46,000 as of December 31, 2017 and December 31, 2016, respectively, to allow for certain loose jewels and finished jewelry on consignment with certain Traditional segment customers that may not be returned or may be returned in a condition that does not meet the Company’s current grading or quality standards. The loose jewel inventories on consignment at December 31, 2017 and December 31, 2016 include shrinkage reserves of $5,000 and $7,000, respectively. The finished jewelry inventories on consignment at December 31, 2017 and December 31, 2016 include shrinkage reserves of $55,000 and $39,000, respectively. The need for adjustments to inventory reserves is evaluated on a period-by-period basis.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	12 Months Ended
	Dec. 31, 2017
PROPERTY AND EQUIPMENT [Abstract]
PROPERTY AND EQUIPMENT	6. PROPERTY AND EQUIPMENT Property and equipment consists of the following: December 31, 2017 2016 Computer software $ 1,206,465 $ 1,192,922 Machinery and equipment 1,026,736 956,050 Computer hardware 1,009,008 874,347 Leasehold improvements 1,126,553 1,083,634 Furniture and fixtures 318,627 309,046 Total 4,687,389 4,415,999 Less accumulated depreciation (3,445,189 ) (3,024,883 ) Property and equipment, net $ 1,242,200 $ 1,391,116 Depreciation expense for the years ended December 31, 2017 and 2016 was approximately $420,000 and $528,000, respectively. Approximately $26,000 related to discontinued operations was included in total depreciation expense for the year ended December 31, 2016.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2017
INTANGIBLE ASSETS [Abstract]
INTANGIBLE ASSETS	7. INTANGIBLE ASSETS Intangible assets consist of the following: December 31, Weighted Average Remaining Amortization Period 2017 2016 (in Years) Patents $ 958,604 $ 958,604 0.1 Trademarks 57,325 55,824 7.7 License rights 6,718 6,718 0.0 Total 1,022,647 1,021,146 Less accumulated amortization (1,014,050 ) (1,012,338 ) Intangible assets, net $ 8,597 $ 8,808 Amortization expense for the years ended December 31, 2017 and 2016 was approximately $2,000 and $68,000, respectively. Amortization expense on existing intangible assets is estimated to be approximately $2,000 for the year ending December 31, 2018 and approximately $1,000 for each of the years ending December 31, 2019, 2020, 2021, and 2022. The remainder of the amortization expense for total intangible assets, net, will be recognized in periods after December 31, 2022. Approximately $13,000 related to discontinued operations was included in total amortization expense for the year ended December 31, 2016.

ACCRUED EXPENSES AND OTHER LIAB

ACCRUED EXPENSES AND OTHER LIABILITIES	12 Months Ended
	Dec. 31, 2017
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
ACCRUED EXPENSES AND OTHER LIABILITIES	8. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities, current, consist of the following: December 31, 2017 2016 Accrued compensation and related benefits $ 652,177 $ 443,547 Accrued cooperative advertising 134,018 50,000 Deferred rent 131,389 115,307 Accrued sales tax 20,844 6,885 Other 42,372 15,368 Accrued expenses and other liabilities $ 980,800 $ 631,107

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2017
COMMITMENTS AND CONTINGENCIES [Abstract]
COMMITMENTS AND CONTINGENCIES	9. COMMITMENTS AND CONTINGENCIES Lease Commitments On December 9, 2013, the Company entered into a Lease Agreement, as amended on December 23, 2013 and April 15, 2014 (the “Lease Agreement”), for a new corporate headquarters, which occupies approximately 36,350 square feet of office, storage, and light manufacturing space. The Company took possession of the leased property on May 23, 2014 once certain improvements to the leased space were completed, and did not have access to the property before this date. These improvements and other lease signing and moving incentives offered by the landlord totaled approximately $550,000 and $73,000, respectively, which will be amortized over the life of the lease until October 31, 2021. Included in the Lease Agreement is a seven-month rent abatement period effective June 2014 through December 2014. The Company recognizes rent expense on a straight-line basis, giving consideration to the rent holidays and escalations, the lease signing and moving allowance to be paid to the Company, and the rent abatement. As of December 31, 2017, the Company’s future minimum payments under the operating leases were as follows: 2018 $ 600,871 2019 617,395 2020 634,373 2021 541,957 Total $ 2,394,596 Rent expense for the years ended December 31, 2017 and 2016 was approximately $510,000 and $539,000, respectively. Approximately $40,000 related to discontinued operations was included in total rent expense for the year ended December 31, 2016. Purchase Commitments On December 12, 2014, the Company entered into a new exclusive supply agreement (the “Supply Agreement”) with Cree, Inc. (“Cree”). Under the 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 Supply Agreement will expire on June 24, 2018, unless extended by the parties. Accordingly, the Company is reviewing various alternatives with respect to our purchase of SiC material, including whether to exercise our unilateral option, subject to certain conditions, to renew the Supply Agreement for an additional two-year period. The Company’s total purchase commitment under the Supply Agreement until June 2018 is dependent upon the size of the SiC material and ranges between approximately $29.60 million and approximately $31.50 million. As of December 31, 2017, the Company’s remaining purchase commitment through June 2018 under the Supply Agreement ranges from approximately $5.15 million to approximately $7.05 million. During the year ended December 31, 2017 and 2016, the Company purchased approximately $9.39 million and $8.20 million, respectively, of SiC crystals from Cree.

LINE OF CREDIT

LINE OF CREDIT	12 Months Ended
	Dec. 31, 2017
LINE OF CREDIT [Abstract]
LINE OF CREDIT	10. LINE OF CREDIT On June 25, 2014, the Company and its wholly owned subsidiaries, Charles & Colvard Direct, LLC, and Moissanite.com, LLC (now charlesandcolvard.com, LLC) (collectively, the “Borrowers”), obtained a $10.00 million asset-based revolving credit facility (the “Credit Facility”) from Wells Fargo Bank, National Association (“Wells Fargo”). The Credit Facility may 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 $1.00 million sublimit. The Credit Facility was scheduled to mature on June 25, 2017. Effective June 22, 2017, the Credit Facility was amended to extend the maturity date to June 25, 2018. The Credit Facility was also amended to reduce the interest rate payable on advances under the Credit Facility to a rate equal to Wells Fargo’s daily three-month LIBOR rate plus 2.00%, calculated on an actual/360 basis and payable monthly in arrears. In addition, the Credit Facility was amended further to include the addition of an EBITDA covenant, whereby the Borrowers were required to maintain a specified minimum monthly EBITDA through December 2017 if the cash position for the Borrowers’ demand deposit account maintained at Wells Fargo falls below $3.00 million or the Borrowers draw upon the Credit Facility. In connection with this amendment, the Company paid a 3% facility fee in the amount of $150,000 that is being amortized over the life of the underlying term of the Credit Facility amendment. The Credit Facility includes a $5.00 million 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 $3.00 million maximum. The Borrowers must maintain a minimum of $1.00 million in excess availability at all times. Each advance accrues interest at a rate equal to either (i) Wells Fargo’s three-month LIBOR rate plus 2.00%, or (ii) Wells Fargo’s Prime Rate plus 1%, each 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. 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 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, as amended (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, (i) any impairment of the Export-Import Bank guaranty, unless the guaranteed advances are repaid within two business days, (ii) an event of default under any other indebtedness of the Borrowers in excess of $200,000, and (iii) 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. Since the current amendment to the Credit Facility matures on June 25, 2018, the Company is currently reviewing various credit facility alternatives. As of December 31, 2017, the Company had not borrowed against the Credit Facility.

SHAREHOLDERS' EQUITY AND STOCK-

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION	12 Months Ended
	Dec. 31, 2017
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION [Abstract]
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION	11. SHAREHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Common Stock The Company is authorized to issue 50,000,000 shares of common stock, no par value. As of December 31, 2017 and 2016, it had 21,580,102 and 21,369,885 shares of common stock outstanding, respectively. Holders of common stock are entitled to one vote for each share held. Preferred Stock The Board of Directors is authorized, without further shareholder approval, to issue up to 10,000,000 shares of preferred stock, no par value. The preferred stock may be issued from time to time in one or more series. No shares of preferred stock had been issued as of December 31, 2017. Equity Compensation Plans 2008 Stock Incentive Plan In May 2008, the shareholders of the Company approved the adoption of the Charles & Colvard, Ltd. 2008 Stock Incentive Plan, as amended on March 31, 2015 and approved by the shareholders of the Company on May 20, 2015 and further amended on March 15, 2016 and approved by the shareholders of the Company on May 18, 2016 The 2008 Plan authorizes the Company to grant stock options, stock appreciation rights, restricted stock, and other equity awards to selected employees, directors, and independent contractors. The aggregate number of shares of the Company’s common stock that may be issued pursuant to awards granted under the 2008 Plan shall not exceed the sum of 6,000,000 plus any shares of common stock subject to an award granted under any stock incentive plan maintained by the Company prior to the 2008 Plan (each, a “Prior Plan”) that is forfeited, cancelled, terminated, expires, or lapses for any reason without the issuance of shares pursuant to the award, or shares subject to an award granted under a Prior Plan which shares are forfeited to, or repurchased or reacquired by, the Company. Stock options granted to employees under the 2008 Plan generally vest over four years and have terms of up to 10 years. The vesting schedules and terms of stock options granted to independent contractors vary depending on the specific grant, but the terms are no longer than 10 years. Stock option awards granted to members of the Board of Directors vest at the end of one year from the date of the grant. The vesting schedules of restricted stock awards granted to employees or independent contractors vary depending on the specific grant but are generally four years or less. Only stock options and restricted stock have been granted under the 2008 Plan. As of December 31, 2017 and 2016, there were 2,227,265 and 2,134,898 stock options outstanding under the 2008 Plan, respectively. Stock-Based Compensation The following table summarizes the components of the Company’s stock-based compensation included in net loss: Year Ended December 31, 2017 2016 Employee stock options $ 336,534 $ 383,778 Consultant stock options - 170,622 Restricted stock awards 106,948 448,906 Total $ 443,482 $ 1,003,306 Due to the Company’s valuation allowance against deferred tax assets as discussed further in Note 12, “Income Taxes”, the income tax benefits for 2017 and 2016 were fully reserved. No stock-based compensation was capitalized as a cost of inventory during the years ended December 31, 2017 and 2016. Approximately $44,000 related to discontinued operations was included in total stock-based compensation expense for the year ended December 31, 2016. Stock Options The following is a summary of the stock option activity for the years ended December 31, 2017 and 2016: Shares Weighted Average Exercise Price Outstanding, December 31, 2015 2,441,077 $ 2.11 Granted 591,005 $ 1.14 Exercised (2,500 ) $ 0.92 Forfeited (449,122 ) $ 1.43 Expired (445,562 ) $ 2.09 Outstanding, December 31, 2016 2,134,898 $ 1.99 Granted 836,369 $ 0.94 Forfeited (103,000 ) $ 1.22 Expired (641,002 ) $ 2.99 Outstanding, December 31, 2017 2,227,265 $ 1.35 The weighted average grant date fair value of stock options granted during the years ended December 31, 2017 and 2016 was $0.53 and $0.63, respectively. The total fair value of stock options that vested during the years ended December 31, 2017 and 2016 was approximately $400,000 and $780,000, respectively. 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 years ended December 31, 2017 and 2016: Year Ended December 31, 2017 2016 Dividend yield 0.0 % 0.0 % Expected volatility 63.4 % 62.2 % Risk-free interest rate 1.90 % 1.42 % Expected lives (years) 5.5 5.6 The following table summarizes information about stock options outstanding at December 31, 2017: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 12/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,227,265 8.06 $ 1.35 1,359,646 7.30 $ 1.57 2,111,450 7.99 $ 1.36 As of December 31, 2017, the unrecognized stock-based compensation expense related to unvested stock options was approximately $337,000, which is expected to be recognized over a weighted average period of approximately 28 months. The aggregate intrinsic value of stock options outstanding, exercisable, and vested or expected to vest at December 31, 2017 was approximately $458,000. This amount is before applicable income taxes and represents the closing market price of the Company’s common stock at December 31, 2017 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. No stock options were exercised during the year ended December 31, 2017. During the year ended December 31, 2016, the aggregate intrinsic value of stock options exercised was approximately $0. Restricted Stock The following is a summary of the restricted stock activity for the years ended December 31, 2017 and 2016: Shares Weighted Average Grant Date Fair Value Unvested, December 31, 2015 425,000 $ 1.87 Granted 509,250 $ 0.93 Vested (321,400 ) $ 2.00 Canceled (253,450 ) $ 1.18 Unvested, December 31, 2016 359,400 $ 0.91 Granted 420,000 $ 1.11 Vested (214,200 ) $ 0.92 Canceled (209,783 ) $ 0.96 Unvested, December 31, 2017 355,417 $ 1.11 The unvested restricted shares as of December 31, 2017 are all As of December 31, 2017, the estimated unrecognized stock-based compensation expense related to these unvested restricted shares subject to the achievement of performance goals was approximately $69,000, all of which is expected to be recognized over a weighted average period of approximately one month. Dividends The Company has paid no cash dividends during the years ended December 31, 2017 and 2016.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2017
INCOME TAXES [Abstract]
INCOME TAXES	12. INCOME TAXES On December 22, 2017, the President signed the Tax Act, which among other things, lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. Consequently, the Company wrote down its net deferred tax assets as of December 31, 2017 by approximately $519,000 to reflect the estimated impact of the Tax Act. The Company recorded a corresponding net adjustment to its valuation allowance related to the re-measurement of certain net deferred tax assets using the lower U.S. corporate income tax. The Company has substantially completed its provisional analysis of the income tax effects of the Tax Act and recorded a reasonable estimate of such effects. However, the SEC staff issued guidance regarding application of FASB income tax-related guidance in the reporting period that includes December 22, 2017 – the date on which the Tax Act was signed into law – to address situations when a company does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The Company has estimated the tax impacts related to the impact to deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017, on a provisional basis. In this regard, the Tax Act repeals the corporate alternative minimum tax, or AMT, regime, including claiming a refund and full realization of remaining AMT credits. The Company has not been able to make a reasonable estimate with respect to its realization of existing AMT credit carryforwards, and accordingly, continues to apply the income tax-related accounting guidance that was in effect immediately prior to the enactment of the Tax Act. In order for the Company to complete the income tax effects of the Tax Act on its existing AMT deferred tax asset, the Company needs to further analyze the nature, validity, and recoverability of its AMT-related deferred tax credit carryforwards prior to recording the underlying appropriate tax benefit. Accordingly, the ultimate impact related to the Tax Act may differ, possibly materially, due to, among other things, completing its analysis of the realization of available AMT credit refunds, further refinement of the Company’s calculations, changes in interpretations and assumptions that the Company made, additional guidance that may be issued by the U.S. Government, and actions and related accounting policy decisions that the Company may take as a result of the Tax Act. The Company expects this analysis to be complete when the Company’s 2017 U.S. corporate income tax return is filed in 2018. The Company accounts for income taxes under the liability method. Under the liability method, deferred income taxes are recognized for the income tax consequences of “temporary differences” by applying enacted statutory income tax rates applicable to future years to differences between the financial statement carrying amounts and the income tax bases of existing assets and liabilities. Income tax net expense Year Ended December 31, 2017 2016 Current: Federal $ - $ - State (27,609 ) (13,480 ) Total (27,609 ) (13,480 ) Deferred: Federal - - State - - Total - - Income tax net expense $ (27,609 ) $ (13,480 ) Significant components of the Company’s deferred income tax assets are as follows: December 31, 2017 2016 Reserves and accruals $ 686,573 $ 1,053,863 Prepaid expenses (28,744 ) (43,774 ) Federal NOL carryforwards 8,395,472 8,530,493 State NOL carryforwards 681,364 615,919 Hong Kong NOL carryforwards 995,566 995,566 Federal benefit on state taxes under uncertain tax positions 94,142 136,969 Stock-based compensation 422,623 342,294 Research tax credit 434,637 434,637 Alternative minimum tax credit 350,743 348,264 Contributions carryforward - 35,100 Depreciation (178,670 ) (286,608 ) Accrued rent 138,178 216,432 Loss on impairment of long-lived assets 33,864 53,042 Valuation allowance (12,025,748 ) (12,432,197 ) Total - - Total deferred income tax assets, net $ - $ - A reconciliation between expected income taxes, computed at the statutory federal income tax rate of 21% applied to pretax accounting loss, and the income tax net expense included in the consolidated statements of operations for the years ended December 31, 2017 and 2016 is as follows: Year Ended December 31, 2017 2016 Anticipated income tax benefit at statutory rate $ 144,795 $ 1,534,176 State income tax expense, net of federal tax effect (54,083 ) (9,350 ) Federal income tax effect of change in tax rate (518,974 ) - Income tax effect of uncertain tax positions (17,946 ) (8,896 ) Return to provision adjustments 2,982 (23,070 ) Stock-based compensation (36,233 ) (110,066 ) Other changes in deferred income tax assets, net (437 ) (13,118 ) Decrease (increase) in valuation allowance 452,287 (1,383,156 ) Income tax net expense $ (27,609 ) $ (13,480 ) As of each reporting date, management considers new evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets. As of December 31, 2017, the Company had approximately $884,000 of remaining federal income tax credits, $533,000 of which expire between 2018 and 2021 and the balance without an expiration, which can be carried forward to offset future income taxes. As of December 31, 2017, the Company had federal tax net operating loss carryforwards under U.S. GAAP of approximately $24.59 million, expiring between 2020 and 2036, which can be used to offset against future federal taxable income; North Carolina tax net operating loss carryforwards of approximately $20.22 million expiring between 2023 and 2032; and various other state tax net operating loss carryforwards expiring between 2021 and 2036, which can be used to offset against future state taxable income. As of December 31, 2017, there was approximately $6.03 million in net operating loss carryforwards in Hong Kong. In accordance with the Hong Kong tax code, these amounts can be carried forward indefinitely to offset future taxable income in Hong Kong. The Company’s deferred tax assets in Hong Kong were fully reserved with a valuation allowance of $996,000 as of December 31, 2017 and 2016 and had been fully reserved in all prior periods due to the uncertainty of future taxable income in this jurisdiction to utilize the deferred tax assets. Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary, which was re-activated in December 2017, but had no operating activity during the year ended December 31, 2017, previously ceased operations during 2008 and became a dormant entity during 2009. If the Company uses any portion of its deferred tax assets in future periods, the valuation allowance would need to be reversed and may impact the Company’s future operating results. Uncertain Tax Positions The gross liability for income taxes associated with uncertain tax positions at December 31, 2017 was approximately $560,000. This amount is shown net of approximately $98,000 recorded as a direct reduction to the associated deferred tax asset. The gross liability, if recognized, would favorably affect the Company’s effective tax rate. The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of the provision for income taxes. The Company accrued approximately $28,000 and $13,000 of interest and penalties associated with uncertain tax positions for the years ended December 31, 2017 and 2016, respectively. Including the interest and penalties recorded for uncertain tax positions, there is a total of approximately $193,000 and $165,000 of interest and penalties included in the accrued income tax liability for uncertain tax positions as of December 31, 2017 and 2016, respectively. To the extent interest and penalties are not ultimately incurred with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. In all of the significant federal and state jurisdictions where it is required to file income tax returns, the Company has analyzed filing positions for all tax years in which the statute of limitations is open. The only periods subject to examination by the major tax jurisdictions where the Company does business are the 2013 through 2016 tax years. The Company does not believe that the outcome of any examination will have a material impact on its consolidated financial statements and does not expect settlement on any uncertain tax positions within the next 12 months. The following summarizes the activity related to the Company ’ Balance as of January 1, 2016 $ 519,284 Increases related to prior year tax positions 13,480 Balance as of December 31, 2016 532,764 Increases related to prior year tax positions 27,609 Balance as of December 31, 2017 $ 560,373

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	12 Months Ended
	Dec. 31, 2017
DISCONTINUED OPERATIONS [Abstract]
DISCONTINUED OPERATIONS	13. DISCONTINUED OPERATIONS In March 2016, the Company and Charles & Colvard Direct, LLC (“Direct”) a wholly owned subsidiary of the Company, entered into an asset purchase agreement (the “Purchase Agreement”) with Yanbal, pursuant to which Yanbal agreed to purchase certain assets of Direct (the “Transferred Assets”). The transactions contemplated by the Purchase Agreement closed on March 4, 2016 (the “Closing Date”). The Company made the decision to divest of these assets after careful analysis and the sale of these assets represented a strategic shift that resulted in a significant favorable impact on the Company’s operations and financial results. Pursuant to the terms of the Purchase Agreement, the Transferred Assets included, among other things, (i) an inventory credit usable towards certain inventory as of the Closing Date, (ii) all existing marketing collateral for Direct’s jewelry offered under the “Lulu Avenue” trademarks as of the Closing Date, (iii) certain assigned contracts, (iv) style advisor and customer lists, and (v) all intellectual property rights owned by the Company and Direct and used solely in connection with the operation of Direct’s direct-to-consumer home party business for the sale of fashion jewelry and related products and services in the U.S., excluding Lulu Avenue-related intellectual property. The inventory credit and an exclusive, nontransferable license to use the Lulu Avenue-related intellectual property that was also granted to Yanbal on the Closing Date expired on July 31, 2016. After the Closing Date, the Company and Direct may no longer engage in the direct-to-consumer home party business and may not solicit style advisors or customers of the direct-to-consumer home party business. The Company had also agreed to provide to Yanbal certain transition services, which services ended August 31, 2016. The purchase price for the Transferred Assets was $500,000 with selling expenses of approximately $131,000, resulting in a net purchase price of approximately $369,000. The Company recorded a liability associated with $35,000 of expense related to certain style advisor incentives and reduced prepaid expenses by $60,000 related to contracts acquired by Yanbal. There were no assets or liabilities related to the Company’s discontinued operations as of December 31, 2016 or 2017. Further, there were no transactions related to discontinued operations during the year ended December 31, 2017. The following table presents the major classes of line items constituting pretax loss from discontinued operations during the year ended December 31, 2016: Net sales $ 804,585 Costs and expenses: Cost of goods sold 276,100 Sales and marketing 940,685 General and administrative 173,913 Interest expense 11 Total costs and expenses 1,390,709 Loss from discontinued operations (586,124 ) Other income: Gain on sale of long-term assets 12,398 Total other income, net 12,398 Pretax loss from discontinued operations $ (573,726 )

MAJOR CUSTOMERS AND CONCENTRATI

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	12 Months Ended
	Dec. 31, 2017
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	14. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK At times, a portion of the Company’s accounts receivable will be due from customers that have individual balances of 10% or more of the Company’s total gross accounts receivable. The following is a summary of customers that represent greater than or equal to 10% of total gross accounts receivable: December 31, 2017 December 31, 2016 Customer A 12 % 16 % Customer B 18 % * % * Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2016. 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 net sales: Year Ended December 31, 2017 2016 Customer C 21 % 17 % Customer D * % 23 % * 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.

EMPLOYEE BENEFIT PLAN

EMPLOYEE BENEFIT PLAN	12 Months Ended
	Dec. 31, 2017
EMPLOYEE BENEFIT PLAN [Abstract]
EMPLOYEE BENEFIT PLAN	15. EMPLOYEE BENEFIT PLAN All full-time employees who meet certain age and length of service requirements are eligible to participate in the Company’s 401(k) Plan. This plan provides for matching contributions by the Company in such amounts as the Board of Directors may annually determine, as well as a 401(k) option under which eligible participants may defer a portion of their salaries. The Company contributed a total of $64,000 and $102,000 to this employee benefit plan during the years ended December 31, 2017 and 2016, respectively.

SUBSEQUENT EVENT

SUBSEQUENT EVENT	12 Months Ended
	Dec. 31, 2017
SUBSEQUENT EVENT [Abstract]
SUBSEQUENT EVENT	16. SUBSEQUENT EVENT On January 30, 2018, the Compensation Committee of the Board of Directors of the Company modified the awards granted under the Charles & Colvard, Ltd. 2017 Senior Management Equity Incentive Program, or the 2017 Program, to reflect a 75% achievement level of the Company Measures, as defined in the 2017 Program. In addition, the Compensation Committee modified the awards from wholly restricted stock awards to awards consisting of 70% restricted stock and 30% cash in lieu of restricted stock. As a result, the Compensation Committee approved the following combined modified awards for the Company’s named executive officers: cash payments totaling approximately $109,000 and total combined restrictions lapsed on approximately 183,000 of the 300,000 total shares of the named executive officers’ original restricted stock awards. The remainder of the original awards of restricted stock was forfeited.

BASIS OF PRESENTATION AND SIG23

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2017
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation - All intercompany accounts have been eliminated.
Change in Fiscal Year-End	Change in Fiscal Year-End –
Discontinued Operations	Discontinued Operations -
Use of Estimates	Use of Estimates - T “ ”
Reclassifications	Reclassifications -
Cash and Cash Equivalents	Cash and Cash Equivalents -
Concentration of Credit Risk	Concentration of Credit Risk - Trade receivables potentially subject the Company to credit risk. Payment terms on trade receivables for the Company’s Traditional segment customers are generally between 30 and 120 days, though it may offer extended terms with specific customers and on significant orders from time to time. The Company believes its competitors and other vendors in the wholesale jewelry industry have also expanded their use of extended payment terms and, in aggregate, the Company believes that by expanding its use of extended payment terms, it has provided a competitive response in its market and that its net sales have been favorably impacted. The Company is unable to estimate the impact of this program on its net sales, but if it ceased providing extended payment terms in select instances, the Company believes it would not be competitive for some Traditional segment customers in the marketplace and that its net sales and profits would likely decrease. 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 that is verified through trade association reference services, 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. Collateral is not generally required from customers. The need for an allowance for doubtful accounts is determined based upon factors surrounding the credit risk of specific customers, historical trends, and other information. During the year ended December 31, 2016, the Company wrote off $815,000 in accounts receivable related to one international customer that was past due on its payment arrangement as it determined that the benefits of continued collections efforts did not outweigh the cost of legal proceedings. The Company does not believe its commercial terms were a factor with this customer’s non-payment. The Company’s allowance for doubtful accounts previously included an allowance for this accounts receivable, and therefore, this write-off did not have an impact on net loss for the year ended December 31, 2016. The Company has not experienced any other significant accounts receivable write-offs related to revenue arrangements with extended payment terms. See Note 14, “Major Customers and Concentration of Credit Risk”, for further discussion of credit risk within trade accounts receivable.
Accounts Receivable Reserves	Accounts Receivable Reserves - The following is a reconciliation of the allowance for sales returns: Year Ended December 31, 2017 2016 Balance, beginning of year $ 415,000 $ 731,000 Additions charged to operations 3,878,736 3,574,297 Sales returns (3,756,736 ) (3,890,297 ) Balance, end of year $ 537,000 $ 415,000 The second reserve is an allowance for doubtful accounts for estimated losses resulting from the failure of the Company’s customers to make required payments. This allowance reduces trade accounts receivable to an amount expected to be collected. Based on historical percentages of uncollectible accounts by aging category, changes in payment history, and facts and circumstances regarding specific accounts that become known to management when evaluating the adequacy of the allowance for doubtful accounts, the Company determines a percentage based on the age of the receivable that it deems uncollectible. The allowance is then calculated by applying the appropriate percentage to each of the Company’s accounts receivable aging categories, with consideration given to individual customer account activity subsequent to the current period, including cash receipts, in determining the appropriate allowance for doubtful accounts in the current period. Any increases or decreases to this allowance are charged or credited, respectively, as a bad debt expense to general and administrative expenses. The Company generally uses an internal collection effort, which may include its sales personnel as it deems appropriate. After all internal collection efforts have been exhausted, the Company generally writes off the account receivable. Any accounts with significant balances are reviewed separately to determine an appropriate allowance based on the facts and circumstances of the specific account. During the quarter ended September 30, 2016, the Company wrote off $815,000 in accounts receivable related to one international customer that was past due on its payment arrangement, as the Company determined that the benefits of continued collections efforts did not outweigh the costs of legal proceedings. The Company’s allowance for doubtful accounts previously included an allowance for this accounts receivable, and therefore, this write-off did not have an impact on net loss for the year ended December 31, 2016. During its review for 2017 and 2016, the Company determined no additional reserves were necessary for specific accounts. Based on these criteria, management determined that allowances for doubtful accounts receivable of $254,000 and $226,000 at December 31, 2017 and 2016, respectively, were required. The following is a reconciliation of the allowance for doubtful accounts: Year Ended December 31, 2017 2016 Balance, beginning of year $ 226,000 $ 1,137,000 Additions (reductions) charged to operations 28,000 (73,300 ) Write-offs, net of recoveries - (837,000 ) Balance, end of year $ 254,000 $ 226,000 Although the Company believes that its reserves are adequate, if the financial condition of its customers deteriorates, resulting in an impairment of their ability to make payments, or if it underestimates the allowances required, additional allowances may be necessary, which would result in increased expense in the period in which such determination is made.
Inventories	Inventories - Inventory costs include direct material and labor, inbound freight, purchasing and receiving costs, inspection costs, and warehousing costs.
Property and Equipment	Property and Equipment - Machinery and equipment 5 to 12 years Computer hardware 3 to 5 years Computer software 3 years Furniture and fixtures 5 to 10 years Leasehold improvements Shorter of the estimated useful life or the lease term
Intangible Assets	Intangible Assets -
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets - whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount exceeds the fair value and is recognized as an operating expense in the period in which the determination is made. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell. As of December 31, 2017, the Company did not identify any indicators of long-lived asset impairment. In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of its long-lived assets. Any reduction in the useful-life assumption will result in increased depreciation and amortization expense in the period when such determination is made, as well as in subsequent periods.
Revenue Recognition	Revenue Recognition -
Cost of Goods Sold	Cost of Goods Sold -
Advertising Costs	Advertising Costs - The Company also offers a cooperative advertising program to certain of its distributor and retail partners that reimburses, via a credit towards future purchases, a portion of their marketing costs based on the customers’ net purchases from the Company and is subject to the customer providing documentation of all advertising performed that includes the Company’s products. For the years ended December 31, 2017 and 2016, these approximate amounts were an expense of $210,000 and $126,000, respectively, and are included as a component of sales and marketing expenses. Advertising expenses, inclusive of the cooperative advertising program, for the years ended December 31, 2017 and 2016 were approximately $1.94 million and $2.59 million, respectively. Approximately $56,000 related to discontinued operations was included in total advertising expense for the year ended December 31, 2016.
Sales and Marketing	Sales and Marketing - charlesandcolvard.com, LLC, wholly owned operating subsidiary.
General and Administrative	General and Administrative -
Research and Development	Research and Development -
Stock-Based Compensation	Stock-Based Compensation - The Company recognizes compensation expense for stock-based awards based on estimated fair values on the date of grant. Fair value of stock options using the Black-Scholes-Merton option pricing model is estimated on the date of grant utilizing certain assumptions for dividend yield, expected volatility, risk-free interest rate, and expected lives of the awards, as follows: · Dividend yield - · Expected volatility - · Risk-free interest rate - · Expected lives - The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rates of stock-based awards and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rates, the Company analyzed its historical forfeiture rates, the remaining lives of unvested stock-based awards, and the amount of vested awards as a percentage of total awards outstanding. If the Company’s actual forfeiture rates are materially different from its estimates, or if the Company re-evaluates the forfeiture rates in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period.
Income Taxes	Income Taxes - In light of the newly enacted Tax Cuts and Jobs Act, or the Tax Act, the Company has provisionally recorded its U.S. deferred taxes based on the Federal corporate income tax rate of 21%. The Company is continuing to analyze aspects of the Tax Act and, therefore, has not finalized its accounting policy with respect to accounting for deferred income taxes. For further discussion of the effects of the Tax Act on our deferred tax assets, see Note 12, “Income Taxes”.
Net Loss per Common Share	Net Loss per Common Share - The following table reconciles the differences between the basic and diluted net loss per share presentations: Year Ended December 31, 2017 2016 Numerator: Net loss from continuing operations $ (453,477 ) $ (3,952,035 ) Net loss from discontinued operations - (573,726 ) Net loss $ (453,477 ) $ (4,525,761 ) Denominator: Weighted average common shares outstanding: Basic 21,193,793 20,926,120 Stock options - - Diluted 21,193,793 20,926,120 Net loss per common share: Basic-continuing operations $ (0.02 ) $ (0.19 ) Basic-discontinued operations - (0.03 ) Basic-total $ (0.02 ) $ (0.22 ) Diluted-continuing operations $ (0.02 ) $ (0.19 ) Diluted-discontinued operations - (0.03 ) Diluted-total $ (0.02 ) $ (0.22 ) For the years ended December 31, 2017 and 2016, stock options to purchase approximately 2.23 million and 2.13 million shares, respectively, 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 anti-dilutive to net loss per common share. For the years ended December 31, 2017 and 2016, 370,000 and 359,000, respectively, of restricted shares that have been issued but not yet vested have been excluded from the computation of diluted net loss per common share.
Recently Adopted/Issued Accounting Pronouncements	Recently Adopted/Issued Accounting Pronouncements - In February 2016, the FASB issued guidance that establishes a right-of-use, or ROU, model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the statement of operations. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the early stage of its analysis, but currently expects that upon adoption of this standard, ROU assets and liabilities will be recognized in the balance sheet in amounts that will be material.

BASIS OF PRESENTATION AND SIG24

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2017
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Reconciliation of allowance for sales returns	The following is a reconciliation of the allowance for sales returns: Year Ended December 31, 2017 2016 Balance, beginning of year $ 415,000 $ 731,000 Additions charged to operations 3,878,736 3,574,297 Sales returns (3,756,736 ) (3,890,297 ) Balance, end of year $ 537,000 $ 415,000
Reconciliation of allowance for doubtful accounts	The following is a reconciliation of the allowance for doubtful accounts: Year Ended December 31, 2017 2016 Balance, beginning of year $ 226,000 $ 1,137,000 Additions (reductions) charged to operations 28,000 (73,300 ) Write-offs, net of recoveries - (837,000 ) Balance, end of year $ 254,000 $ 226,000
Schedule of estimated useful life of property, plant and equipment	Property and equipment are stated at cost and are depreciated over their estimated useful lives using the straight-line method as follows: Machinery and equipment 5 to 12 years Computer hardware 3 to 5 years Computer software 3 years Furniture and fixtures 5 to 10 years Leasehold improvements Shorter of the estimated useful life or the lease term
Reconciliation of basic and diluted net loss per share	The following table reconciles the differences between the basic and diluted net loss per share presentations: Year Ended December 31, 2017 2016 Numerator: Net loss from continuing operations $ (453,477 ) $ (3,952,035 ) Net loss from discontinued operations - (573,726 ) Net loss $ (453,477 ) $ (4,525,761 ) Denominator: Weighted average common shares outstanding: Basic 21,193,793 20,926,120 Stock options - - Diluted 21,193,793 20,926,120 Net loss per common share: Basic-continuing operations $ (0.02 ) $ (0.19 ) Basic-discontinued operations - (0.03 ) Basic-total $ (0.02 ) $ (0.22 ) Diluted-continuing operations $ (0.02 ) $ (0.19 ) Diluted-discontinued operations - (0.03 ) Diluted-total $ (0.02 ) $ (0.22 )

SEGMENT INFORMATION AND GEOGR25

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)	12 Months Ended
	Dec. 31, 2017
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Summary information by reportable segment	Summary financial information by reportable segment is as follows: Year Ended December 31, 2017 Traditional Online Channels Total Net sales Loose jewels $ 13,430,776 $ 3,149,972 $ 16,580,748 Finished jewelry 2,515,443 7,936,773 10,452,216 Total $ 15,946,219 $ 11,086,745 $ 27,032,964 Product line cost of goods sold Loose jewels $ 6,998,485 $ 1,526,358 $ 8,524,843 Finished jewelry 1,610,845 3,615,815 5,226,660 Total $ 8,609,330 $ 5,142,173 $ 13,751,503 Product line gross profit Loose jewels $ 6,432,291 $ 1,623,614 $ 8,055,905 Finished jewelry 904,598 4,320,958 5,225,556 Total $ 7,336,889 $ 5,944,572 $ 13,281,461 Operating (loss) income $ (836,797 ) $ 228,253 $ (608,544 ) Depreciation and amortization $ 300,308 $ 121,711 $ 422,018 Capital expenditures $ 123,944 $ 147,446 $ 271,390 Year Ended December 31, 2016 Traditional Online Channels Total Net sales Loose jewels $ 19,231,534 $ 2,220,194 $ 21,451,728 Finished jewelry 1,075,157 6,641,243 7,716,400 Total $ 20,306,691 $ 8,861,437 $ 29,168,128 Product line cost of goods sold Loose jewels $ 13,107,366 $ 809,383 $ 13,916,749 Finished jewelry 1,195,640 2,953,148 4,148,788 Total $ 14,303,006 $ 3,762,531 $ 18,065,537 Product line gross profit (loss) Loose jewels $ 6,124,168 $ 1,410,811 $ 7,534,979 Finished jewelry (120,483 ) 3,688,095 3,567,612 Total $ 6,003,685 $ 5,098,906 $ 11,102,591 Operating loss $ (3,089,559 ) $ (847,259 ) $ (3,936,818 ) Depreciation and amortization $ 479,517 $ 77,876 $ 557,393 Capital expenditures $ 158,702 $ 263,059 $ 421,761
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 consolidated financial statements is as follows: Year Ended December 31, 2017 2016 Product line cost of goods sold $ 13,751,503 $ 18,065,537 Non-capitalized manufacturing and production control expenses 1,352,311 1,427,924 Freight out 417,074 376,726 Inventory valuation allowances 598,000 200,000 Other inventory adjustments (648,271 ) 331,252 Cost of goods sold $ 15,470,617 $ 20,401,439
Net sales by geographic area	The following presents net sales data by geographic area: Year Ended December 31, 2017 2016 Net sales United States $ 25,176,220 $ 26,164,660 International 1,856,744 3,003,468 Total $ 27,032,964 $ 29,168,128

INVENTORIES (Tables)

INVENTORIES (Tables)	12 Months Ended
	Dec. 31, 2017
INVENTORIES [Abstract]
Schedule of inventory, net of reserves	The Company’s total inventories, net of reserves, are as follows as of the dates presented: December 31, 2017 2016 Raw materials $ 4,853,049 $ 3,106,617 Work-in-process 9,219,383 11,048,126 Finished goods 17,896,992 15,057,668 Finished goods on consignment 1,093,752 467,778 Supplies inventory 75,441 17,228 Less inventory reserves (2,165,000 ) (1,567,000 ) Total $ 30,973,617 $ 28,130,417 Short-term portion $ 11,208,658 $ 9,770,206 Long-term portion 19,764,959 18,360,211 Total $ 30,973,617 $ 28,130,417
Schedule of inventories by product line maintained in its wholesale distribution segment	The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2017 December 31, 2016 Loose jewels Raw materials $ 4,288,360 $ 2,586,045 Work-in-process 8,328,719 10,589,424 Finished goods 9,487,245 9,455,393 Finished goods on consignment 26,281 5,473 Total loose jewels $ 22,130,605 $ 22,636,335 Finished jewelry Raw materials $ 564,689 $ 520,572 Work-in-process 890,664 458,702 Finished goods 6,304,747 4,081,275 Finished goods on consignment 1,007,471 416,305 Total finished jewelry 8,767,571 5,476,854 Total supplies inventory 75,441 17,228 Total inventory $ 30,973,617 $ 28,130,417

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2017
PROPERTY AND EQUIPMENT [Abstract]
Property and equipment	Property and equipment consists of the following: December 31, 2017 2016 Computer software $ 1,206,465 $ 1,192,922 Machinery and equipment 1,026,736 956,050 Computer hardware 1,009,008 874,347 Leasehold improvements 1,126,553 1,083,634 Furniture and fixtures 318,627 309,046 Total 4,687,389 4,415,999 Less accumulated depreciation (3,445,189 ) (3,024,883 ) Property and equipment, net $ 1,242,200 $ 1,391,116

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2017
INTANGIBLE ASSETS [Abstract]
Schedule of intangible assets	Intangible assets consist of the following: December 31, Weighted Average Remaining Amortization Period 2017 2016 (in Years) Patents $ 958,604 $ 958,604 0.1 Trademarks 57,325 55,824 7.7 License rights 6,718 6,718 0.0 Total 1,022,647 1,021,146 Less accumulated amortization (1,014,050 ) (1,012,338 ) Intangible assets, net $ 8,597 $ 8,808

ACCRUED EXPENSES AND OTHER LI29

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2017
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Accrued expenses and other liabilities	Accrued expenses and other liabilities, current, consist of the following: December 31, 2017 2016 Accrued compensation and related benefits $ 652,177 $ 443,547 Accrued cooperative advertising 134,018 50,000 Deferred rent 131,389 115,307 Accrued sales tax 20,844 6,885 Other 42,372 15,368 Accrued expenses and other liabilities $ 980,800 $ 631,107

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2017
COMMITMENTS AND CONTINGENCIES [Abstract]
Future minimum payments under operating lease	As of December 31, 2017, the Company’s future minimum payments under the operating leases were as follows: 2018 $ 600,871 2019 617,395 2020 634,373 2021 541,957 Total $ 2,394,596

SHAREHOLDERS' EQUITY AND STOC31

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2017
SHAREHOLDERS' EQUITY AND 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: Year Ended December 31, 2017 2016 Employee stock options $ 336,534 $ 383,778 Consultant stock options - 170,622 Restricted stock awards 106,948 448,906 Total $ 443,482 $ 1,003,306
Summary of the stock option activity	The following is a summary of the stock option activity for the years ended December 31, 2017 and 2016: Shares Weighted Average Exercise Price Outstanding, December 31, 2015 2,441,077 $ 2.11 Granted 591,005 $ 1.14 Exercised (2,500 ) $ 0.92 Forfeited (449,122 ) $ 1.43 Expired (445,562 ) $ 2.09 Outstanding, December 31, 2016 2,134,898 $ 1.99 Granted 836,369 $ 0.94 Forfeited (103,000 ) $ 1.22 Expired (641,002 ) $ 2.99 Outstanding, December 31, 2017 2,227,265 $ 1.35
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 years ended December 31, 2017 and 2016: Year Ended December 31, 2017 2016 Dividend yield 0.0 % 0.0 % Expected volatility 63.4 % 62.2 % Risk-free interest rate 1.90 % 1.42 % Expected lives (years) 5.5 5.6
Information about stock options outstanding	The following table summarizes information about stock options outstanding at December 31, 2017: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 12/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,227,265 8.06 $ 1.35 1,359,646 7.30 $ 1.57 2,111,450 7.99 $ 1.36
Restricted stock activity	The following is a summary of the restricted stock activity for the years ended December 31, 2017 and 2016: Shares Weighted Average Grant Date Fair Value Unvested, December 31, 2015 425,000 $ 1.87 Granted 509,250 $ 0.93 Vested (321,400 ) $ 2.00 Canceled (253,450 ) $ 1.18 Unvested, December 31, 2016 359,400 $ 0.91 Granted 420,000 $ 1.11 Vested (214,200 ) $ 0.92 Canceled (209,783 ) $ 0.96 Unvested, December 31, 2017 355,417 $ 1.11

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2017
INCOME TAXES [Abstract]
Income tax net (expense) benefit	Income tax net expense Year Ended December 31, 2017 2016 Current: Federal $ - $ - State (27,609 ) (13,480 ) Total (27,609 ) (13,480 ) Deferred: Federal - - State - - Total - - Income tax net expense $ (27,609 ) $ (13,480 )
Significant components of deferred income tax assets	Significant components of the Company’s deferred income tax assets are as follows: December 31, 2017 2016 Reserves and accruals $ 686,573 $ 1,053,863 Prepaid expenses (28,744 ) (43,774 ) Federal NOL carryforwards 8,395,472 8,530,493 State NOL carryforwards 681,364 615,919 Hong Kong NOL carryforwards 995,566 995,566 Federal benefit on state taxes under uncertain tax positions 94,142 136,969 Stock-based compensation 422,623 342,294 Research tax credit 434,637 434,637 Alternative minimum tax credit 350,743 348,264 Contributions carryforward - 35,100 Depreciation (178,670 ) (286,608 ) Accrued rent 138,178 216,432 Loss on impairment of long-lived assets 33,864 53,042 Valuation allowance (12,025,748 ) (12,432,197 ) Total - - Total deferred income tax assets, net $ - $ -
Schedule of effective income tax rate reconciliation	A reconciliation between expected income taxes, computed at the statutory federal income tax rate of 21% applied to pretax accounting loss, and the income tax net expense included in the consolidated statements of operations for the years ended December 31, 2017 and 2016 is as follows: Year Ended December 31, 2017 2016 Anticipated income tax benefit at statutory rate $ 144,795 $ 1,534,176 State income tax expense, net of federal tax effect (54,083 ) (9,350 ) Federal income tax effect of change in tax rate (518,974 ) - Income tax effect of uncertain tax positions (17,946 ) (8,896 ) Return to provision adjustments 2,982 (23,070 ) Stock-based compensation (36,233 ) (110,066 ) Other changes in deferred income tax assets, net (437 ) (13,118 ) Decrease (increase) in valuation allowance 452,287 (1,383,156 ) Income tax net expense $ (27,609 ) $ (13,480 )
Summary of gross liability for uncertain tax positions	The following summarizes the activity related to the Company ’ Balance as of January 1, 2016 $ 519,284 Increases related to prior year tax positions 13,480 Balance as of December 31, 2016 532,764 Increases related to prior year tax positions 27,609 Balance as of December 31, 2017 $ 560,373

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	12 Months Ended
	Dec. 31, 2017
DISCONTINUED OPERATIONS [Abstract]
Summary of discontinued operations	The following table presents the major classes of line items constituting pretax loss from discontinued operations during the year ended December 31, 2016: Net sales $ 804,585 Costs and expenses: Cost of goods sold 276,100 Sales and marketing 940,685 General and administrative 173,913 Interest expense 11 Total costs and expenses 1,390,709 Loss from discontinued operations (586,124 ) Other income: Gain on sale of long-term assets 12,398 Total other income, net 12,398 Pretax loss from discontinued operations $ (573,726 )

MAJOR CUSTOMERS AND CONCENTRA34

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)	12 Months Ended
	Dec. 31, 2017
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]
Summary of customers that represent greater than or equal to 10% of total net sales and receivables	The following is a summary of customers that represent greater than or equal to 10% of total gross accounts receivable: December 31, 2017 December 31, 2016 Customer A 12 % 16 % Customer B 18 % * % * Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2016. 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 net sales: Year Ended December 31, 2017 2016 Customer C 21 % 17 % Customer D * % 23 % *

DESCRIPTION OF BUSINESS (Detail

DESCRIPTION OF BUSINESS (Details)	Mar. 04, 2016USD ($)
Yanbal USA Inc. [Member]
Business Acquisition [Line Items]
Purchase price for transferred assets	$ 500,000

BASIS OF PRESENTATION AND SIG36

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Concentration of Credit Risk (Details) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016
Concentration of Credit Risk [Abstract]
Non-interest bearing amounts on deposit in excess of FDIC insurable limits		$ 4,320,000
Trade Accounts Receivable [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Accounts receivables write-offs	$ 815,000		$ 815,000
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Minimum [Member]
Concentration Risk [Line Items]
Customer payment term for trade receivables		30 days
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Maximum [Member]
Concentration Risk [Line Items]
Customer payment term for trade receivables		120 days

BASIS OF PRESENTATION AND SIG37

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Accounts Receivable Reserves (Details) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016
Trade Accounts Receivable [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Accounts receivables write-offs	$ 815,000		$ 815,000
Allowance for Sales Returns [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance, beginning of year		$ 415,000	731,000
Additions charged to operations		3,878,736	3,574,297
Sales returns		(3,756,736)	(3,890,297)
Balance, end of year		537,000	415,000
Allowance for Doubtful Accounts [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance, beginning of year		226,000	1,137,000
Additions (reductions) charged to operations		28,000	(73,300)
Write-offs, net of recoveries		0	(837,000)
Balance, end of year		$ 254,000	$ 226,000

BASIS OF PRESENTATION AND SIG38

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2017
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	5 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	12 years
Computer Hardware [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Computer Hardware [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	5 years
Computer Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	5 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	10 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Useful life, property, plant and equipment	Shorter of the estimated useful life or the lease term

BASIS OF PRESENTATION AND SIG39

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Amortized life of patent	17 years
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Amortized life of patent	1 month 6 days

BASIS OF PRESENTATION AND SIG40

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details)	12 Months Ended
	Dec. 31, 2017
Minimum [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Absolute right of return for shipments to wholesale customers on consignment terms	6 months
Maximum [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Period for return of jewels and finished jewelry for credit	30 days
Absolute right of return for shipments to wholesale customers on consignment terms	1 year
Customer payment period on consignment shipment	60 days
Online Channels [Member] | Maximum [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Period for return of jewels and finished jewelry for credit	60 days

BASIS OF PRESENTATION AND SIG41

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Advertising Costs, Sales and Marketing (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Advertising Costs, Sales and Marketing [Abstract]
Other sales and marketing expenses	$ 210,000	$ 126,000
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Advertising expense	$ 1,940,000	2,590,000
Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Advertising expense		$ 56,000

BASIS OF PRESENTATION AND SIG42

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Stock-Based Compensation (Details)	12 Months Ended
	Dec. 31, 2017
Stock-Based Compensation [Abstract]
Dividend yield	0.00%

BASIS OF PRESENTATION AND SIG43

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Line Items]
Federal statutory income tax rate		35.00%
Plan [Member]
Income Tax Disclosure [Line Items]
Federal statutory income tax rate	21.00%

BASIS OF PRESENTATION AND SIG44

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Net Loss per Common Share (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Numerator [Abstract]
Net loss from continuing operations	$ (453,477)	$ (3,952,035)
Net loss from discontinued operations	0	(573,726)
Net loss	$ (453,477)	$ (4,525,761)
Weighted average common shares outstanding [Abstract]
Basic (in shares)	21,193,793	20,926,120
Stock options (in shares)	0	0
Diluted (in shares)	21,193,793	20,926,120
Net loss per common share [Abstract]
Basic - continuing operations (in dollars per share)	$ (0.02)	$ (0.19)
Basic - discontinued operations (in dollars per share)	0	(0.03)
Basic - total (in dollars per share)	(0.02)	(0.22)
Diluted - continuing operations (in dollars per share)	(0.02)	(0.19)
Diluted - discontinued operations (in dollars per share)	0	(0.03)
Diluted - total (in dollars per share)	$ (0.02)	$ (0.22)
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the computation of diluted net loss per common share (in shares)	2,230,000	2,130,000
Restricted Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the computation of diluted net loss per common share (in shares)	370,000	359,000

SEGMENT INFORMATION AND GEOGR45

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Details)	12 Months Ended
	Dec. 31, 2017USD ($)Segment	Dec. 31, 2016USD ($)
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Number of operating segments | Segment	2
Number of reportable segments | Segment	2
Summary information by segment [Abstract]
Net sales	$ 27,032,964	$ 29,168,128
Product line cost of goods sold	15,470,617	20,401,439
Operating loss (income)	(608,544)	(3,936,818)
Depreciation and amortization	422,018	557,393
Capital expenditures	271,390	421,761
Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	27,032,964	29,168,128
Product line gross profit (loss)	13,281,461	11,102,591
Operating loss (income)	(608,544)	(3,936,818)
Depreciation and amortization	422,018	557,393
Capital expenditures	271,390	421,761
Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	13,751,503	18,065,537
Loose Jewels [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	16,580,748	21,451,728
Product line gross profit (loss)	8,055,905	7,534,979
Loose Jewels [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	8,524,843	13,916,749
Finished Jewelry [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	10,452,216	7,716,400
Product line gross profit (loss)	5,225,556	3,567,612
Finished Jewelry [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	5,226,660	4,148,788
Operating and Reportable Segments [Member] | Traditional [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	15,946,219	20,306,691
Product line gross profit (loss)	7,336,889	6,003,685
Operating loss (income)	(836,797)	(3,089,559)
Depreciation and amortization	300,308	479,517
Capital expenditures	123,944	158,702
Operating and Reportable Segments [Member] | Traditional [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	8,609,330	14,303,006
Operating and Reportable Segments [Member] | Traditional [Member] | Loose Jewels [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	13,430,776	19,231,534
Product line gross profit (loss)	6,432,291	6,124,168
Operating and Reportable Segments [Member] | Traditional [Member] | Loose Jewels [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	6,998,485	13,107,366
Operating and Reportable Segments [Member] | Traditional [Member] | Finished Jewelry [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	2,515,443	1,075,157
Product line gross profit (loss)	904,598	(120,483)
Operating and Reportable Segments [Member] | Traditional [Member] | Finished Jewelry [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	1,610,845	1,195,640
Operating and Reportable Segments [Member] | Online Channels [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	11,086,745	8,861,437
Product line gross profit (loss)	5,944,572	5,098,906
Operating loss (income)	228,253	(847,259)
Depreciation and amortization	121,711	77,876
Capital expenditures	147,446	263,059
Operating and Reportable Segments [Member] | Online Channels [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	5,142,173	3,762,531
Operating and Reportable Segments [Member] | Online Channels [Member] | Loose Jewels [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	3,149,972	2,220,194
Product line gross profit (loss)	1,623,614	1,410,811
Operating and Reportable Segments [Member] | Online Channels [Member] | Loose Jewels [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	1,526,358	809,383
Operating and Reportable Segments [Member] | Online Channels [Member] | Finished Jewelry [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	7,936,773	6,641,243
Product line gross profit (loss)	4,320,958	3,688,095
Operating and Reportable Segments [Member] | Online Channels [Member] | Finished Jewelry [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	3,615,815	2,953,148
Segment Reconciling Items [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	15,470,617	20,401,439
Segment Reconciling Items [Member] | Continuing Operations [Member] | Product Line Cost of Goods Sold [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	13,751,503	18,065,537
Segment Reconciling Items [Member] | Continuing Operations [Member] | Non-Capitalized Manufacturing and Production Control Expenses [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	1,352,311	1,427,924
Segment Reconciling Items [Member] | Continuing Operations [Member] | Freight Out [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	417,074	376,726
Segment Reconciling Items [Member] | Continuing Operations [Member] | Inventory Valuation Allowances [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	598,000	200,000
Segment Reconciling Items [Member] | Continuing Operations [Member] | Other Inventory Adjustments [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	$ (648,271)	$ 331,252

SEGMENT INFORMATION AND GEOGR46

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Data by Geographic Area (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Net sales [Abstract]
Net sales	$ 27,032,964	$ 29,168,128
Continuing Operations [Member]
Net sales [Abstract]
Net sales	27,032,964	29,168,128
Continuing Operations [Member] | Reportable Geographical Components [Member]
Net sales [Abstract]
Net sales	27,032,964	29,168,128
Continuing Operations [Member] | Reportable Geographical Components [Member] | United States [Member]
Net sales [Abstract]
Net sales	25,176,220	26,164,660
Continuing Operations [Member] | Reportable Geographical Components [Member] | International [Member]
Net sales [Abstract]
Net sales	$ 1,856,744	$ 3,003,468

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Total inventories, net of reserves [Abstract]
Raw materials	$ 4,853,049	$ 3,106,617
Work-in-process	9,219,383	11,048,126
Finished goods	17,896,992	15,057,668
Finished goods on consignment	1,093,752	467,778
Total supplies inventory	75,441	17,228
Less inventory reserves	(2,165,000)	(1,567,000)
Total	30,973,617	28,130,417
Short-term portion	11,208,658	9,770,206
Long-term portion	19,764,959	18,360,211
Inventories issued to active production	2,990,000	7,180,000
Inventory of net loose jewels	22,130,000	22,640,000
Inventory of net jewelry	8,770,000	5,480,000
Inventory reserve for obsolescence	1,417,000	944,000
Sale of slow moving loose jewel inventory of less desirable quality	0	6,770,000
Lower of cost or market value	1,326,000	517,000
Carrying value of inventory reserve for obsolescence of finished jewelry	91,000	427,000
Inventory rework reserve for recut	557,000	454,000
Inventory reserve for recuts	468,000	425,000
Inventory reserve for shrinkage of finished jewelry on repairs	89,000	29,000
Inventory reserve for shrinkage	191,000	169,000
Inventory reserve for shrinkage of loose jewels	18,000	67,000
Inventory reserve for shrinkage of finished jewelry	173,000	102,000
Shrinkage reserve for finished goods on consignment	60,000	46,000
Inventory reserve for shrinkage of loose jewels on consignment	5,000	7,000
Inventory reserve for shrinkage of finished jewelry on consignment	55,000	39,000
Loose Jewels [Member]
Total inventories, net of reserves [Abstract]
Raw materials	4,288,360	2,586,045
Work-in-process	8,328,719	10,589,424
Finished goods	9,487,245	9,455,393
Finished goods on consignment	26,281	5,473
Total	22,130,605	22,636,335
Finished Jewelry [Member]
Total inventories, net of reserves [Abstract]
Raw materials	564,689	520,572
Work-in-process	890,664	458,702
Finished goods	6,304,747	4,081,275
Finished goods on consignment	1,007,471	416,305
Total	$ 8,767,571	$ 5,476,854

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Total	$ 4,687,389	$ 4,415,999
Less accumulated depreciation	(3,445,189)	(3,024,883)
Property and equipment, net	1,242,200	1,391,116
Depreciation expense	420,000	528,000
Discontinued Operations [Member]
Property, Plant and Equipment [Line Items]
Depreciation expense		26,000
Computer Software [Member]
Property, Plant and Equipment [Line Items]
Total	1,206,465	1,192,922
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Total	1,026,736	956,050
Computer Hardware [Member]
Property, Plant and Equipment [Line Items]
Total	1,009,008	874,347
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total	1,126,553	1,083,634
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total	$ 318,627	$ 309,046

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Intangible assets [Abstract]
Total	$ 1,022,647	$ 1,021,146
Less accumulated amortization	(1,014,050)	(1,012,338)
Intangible assets, net	$ 8,597	8,808
Weighted average amortization period	17 years
Amortization expense	$ 2,000	68,000
Estimated amortization expenses [Abstract]
2,018	2,000
2,019	1,000
2,020	1,000
2,021	1,000
2,022	1,000
Discontinued Operations [Member]
Intangible assets [Abstract]
Amortization expense		13,000
Patents [Member]
Intangible assets [Abstract]
Total	$ 958,604	958,604
Weighted average amortization period	1 month 6 days
Trademarks [Member]
Intangible assets [Abstract]
Total	$ 57,325	55,824
Weighted average amortization period	7 years 8 months 12 days
License Rights [Member]
Intangible assets [Abstract]
Total	$ 6,718	$ 6,718
Weighted average amortization period	0 years

ACCRUED EXPENSES AND OTHER LI50

ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Accrued compensation and related benefits	$ 652,177	$ 443,547
Accrued cooperative advertising	134,018	50,000
Deferred rent	131,389	115,307
Accrued sales tax	20,844	6,885
Other	42,372	15,368
Accrued expenses and other liabilities	$ 980,800	$ 631,107

COMMITMENTS AND CONTINGENCIES51

COMMITMENTS AND CONTINGENCIES (Details)	12 Months Ended
	Dec. 31, 2017USD ($)ft²	Dec. 31, 2016USD ($)	May 23, 2014USD ($)
Lease Commitments [Abstract]
Land subject to leases | ft²	36,350
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]
2,018	$ 600,871
2,019	617,395
2,020	634,373
2,021	541,957
Total	2,394,596
Other Commitments [Line Items]
Rent expense	$ 510,000	$ 539,000
Long-term Purchase Commitment [Line Items]
Percentage committed to be purchased	100.00%
Period of exclusive supply agreement	2 years
Actual purchases under purchase amendment	$ 9,390,000	8,200,000
Minimum [Member]
Long-term Purchase Commitment [Line Items]
Purchase commitment	29,600,000
Remaining purchase commitment	5,150,000
Maximum [Member]
Long-term Purchase Commitment [Line Items]
Purchase commitment	31,500,000
Remaining purchase commitment	$ 7,050,000
Discontinued Operations [Member]
Other Commitments [Line Items]
Rent expense		$ 40,000

LINE OF CREDIT (Details)

LINE OF CREDIT (Details) - Wells Fargo [Member] - Line of Credit [Member] - USD ($)	Jun. 22, 2017	Dec. 31, 2017
Line of Credit Facility [Line Items]
Revolving line of credit		$ 10,000,000
Line of credit facility, sublimit for letter of credit		$ 1,000,000
Line of credit maturity date		Jun. 25, 2017
Percentage of facility fee		3.00%
Facility fee		$ 150,000
Line of credit facility, sublimit for advances		$ 5,000,000
Percentage of advances, guaranteed by bank		90.00%
Interest rate in event of default in excess of standard rate		3.00%
Number of business day within which guaranteed advances to be repaid		2 days
Advances against line of credit		$ 0
Minimum [Member]
Line of Credit Facility [Line Items]
Excess availability of inventory at all times required for advances		1,000,000
Maximum [Member]
Line of Credit Facility [Line Items]
Borrowers' demand deposit account to be maintained		3,000,000
Advances against inventory		3,000,000
Indebtedness to be maintained in the event of default to avoid triggering of default terms		$ 200,000
LIBOR [Member]
Line of Credit Facility [Line Items]
Line of credit, description of variable rate basis	Wells Fargo’s three-month LIBOR rate	Wells Fargo’s three-month LIBOR rate
Debt instrument, term of variable rate	3 months	3 months
Line of credit, spread on variable rate	2.00%	2.00%
Prime Rate [Member]
Line of Credit Facility [Line Items]
Line of credit, description of variable rate basis		Wells Fargo’s Prime Rate
Line of credit, spread on variable rate		1.00%

SHAREHOLDERS' EQUITY AND STOC53

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Common Stock [Abstract]
Common stock, shares authorized (in shares)			50,000,000	50,000,000
Common stock, par value (in dollars per share)			$ 0	$ 0
Common stock, shares outstanding (in shares)			21,580,102	21,369,885
Common stock voting rights	common stock are entitled to one vote for each share held
Preferred Stock [Abstract]
Preferred stock, shares authorized (in shares)			10,000,000
Preferred stock, par value (in dollars per share)			$ 0
Preferred stock, shares issued (in shares)			0
Components of the Company's stock based compensation included in net income [Abstract]
Share-based compensation expense	$ 443,482	$ 1,003,306
Weighted average assumptions for stock options [Abstract]
Dividend yield	0.00%
2008 Stock Incentive Plan [Member]
Equity Compensation Plans [Abstract]
Share-based payment award, number of shares authorized (in shares)			6,000,000
Vesting period	4 years
2008 Stock Incentive Plan [Member] | Maximum [Member]
Equity Compensation Plans [Abstract]
Share based payment award expiration term	10 years
2008 Stock Incentive Plan [Member] | Board of Directors [Member]
Equity Compensation Plans [Abstract]
Vesting period	1 year
2008 Stock Incentive Plan [Member] | Independent Contractors [Member] | Maximum [Member]
Equity Compensation Plans [Abstract]
Share based payment award expiration term	10 years
Employee Stock Options [Member]
Components of the Company's stock based compensation included in net income [Abstract]
Share-based compensation expense	$ 336,534	383,778
Stock-based compensation capitalized as a cost of inventory	$ 0	$ 0
Stock Option Activity [Roll Forward]
Outstanding, beginning balance (in shares)	2,134,898	2,441,077
Granted (in shares)	836,369	591,005
Exercised (in shares)		(2,500)
Forfeited (in shares)	(103,000)	(449,122)
Expired (in shares)	(641,002)	(445,562)
Outstanding, ending balance (in shares)	2,227,265	2,134,898
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 1.99	$ 2.11
Granted (in dollars per share)	0.94	1.14
Exercised (in dollars per share)		0.92
Forfeited (in dollars per share)	1.22	1.43
Expired (in dollars per share)	2.99	2.09
Outstanding, ending balance (in dollars per share)	1.35	1.99
Fair value of stock options (in dollars per share)	$ 0.53	$ 0.63
Fair value of stock options vested	$ 400,000	$ 780,000
Weighted average assumptions for stock options [Abstract]
Dividend yield	0.00%	0.00%
Expected volatility	63.40%	62.20%
Risk-free interest rate	1.90%	1.42%
Expected lives	5 years 6 months	5 years 7 months 6 days
Options Outstanding [Abstract]
Balance as of end of period (in shares)	2,134,898	2,441,077	2,227,265	2,134,898
Weighted average remaining contractual life	8 years 22 days
Weighted average exercise price (in dollars per share)	$ 1.35	$ 2.11	$ 1.35	$ 1.99
Options Exercisable [Abstract]
Balance as of end of period (in shares)			1,359,646
Weighted average remaining contractual life	7 years 3 months 18 days
Weighted average exercise price (in dollars per share)			$ 1.57
Options Vested or Expected to Vest [Abstract]
Balance as of end of period (in shares)			2,111,450
Weighted average remaining contractual life	7 years 11 months 26 days
Weighted average exercise price (in dollars per share)			$ 1.36
Additional Disclosures [Abstract]
Unrecognized stock-based compensation expense related to unvested awards			$ 337,000
Total compensation cost not yet recognized, period for recognition	28 months
Aggregate intrinsic value of stock options outstanding			458,000
Aggregate intrinsic value of stock options exercisable			458,000
Aggregate intrinsic value of stock options vested and expected to vest			458,000
Aggregate intrinsic value of stock options exercised	$ 0	$ 0
Employee Stock Options [Member] | Discontinued Operations [Member]
Components of the Company's stock based compensation included in net income [Abstract]
Share-based compensation expense		44,000
Consultant Stock Options [Member]
Components of the Company's stock based compensation included in net income [Abstract]
Share-based compensation expense	0	170,622
Restricted Stock [Member]
Components of the Company's stock based compensation included in net income [Abstract]
Share-based compensation expense	$ 106,948	$ 448,906
Additional Disclosures [Abstract]
Unrecognized stock-based compensation expense related to unvested awards			$ 69,000
Total compensation cost not yet recognized, period for recognition	1 month
Restricted Stock Activity [Roll Forward]
Unvested, beginning balance (in shares)	359,400	425,000
Granted (in shares)	420,000	509,250
Vested (in shares)	(214,200)	(321,400)
Canceled (in shares)	(209,783)	(253,450)
Unvested, ending balance (in shares)	355,417	359,400
Weighted Average Grant Date Fair Value [Roll Forward]
Unvested, beginning balance (in dollars per share)	$ 0.91	$ 1.87
Granted (in dollars per share)	1.11	0.93
Vested (in dollars per share)	0.92	2
Canceled (in dollars per share)	0.96	1.18
Unvested, ending balance (in dollars per share)	$ 1.11	$ 0.91
Restricted Stock [Member] | Maximum [Member]
Equity Compensation Plans [Abstract]
Vesting period	4 years

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Line Items]
Federal statutory income tax rate		35.00%
Tax effect of remeasurement of deferred tax assets		$ 519,000
Current [Abstract]
Federal		0	$ 0
State		(27,609)	(13,480)
Total		(27,609)	(13,480)
Deferred [Abstract]
Federal		0	0
State		0	0
Total		0	0
Income tax net expense		(27,609)	(13,480)
Deferred income tax assets [Abstract]
Reserves and accruals		686,573	1,053,863
Prepaid expenses		(28,744)	(43,774)
Federal NOL carryforwards		8,395,472	8,530,493
State NOL carryforwards		681,364	615,919
Hong Kong NOL carryforwards		995,566	995,566
Federal benefit on state taxes under uncertain tax positions		94,142	136,969
Stock-based compensation		422,623	342,294
Research tax credit		434,637	434,637
Alternative minimum tax credit		350,743	348,264
Contributions carryforward		0	35,100
Depreciation		(178,670)	(286,608)
Accrued rent		138,178	216,432
Loss on impairment of long-lived assets		33,864	53,042
Valuation allowance		(12,025,748)	(12,432,197)
Total		0	0
Total deferred income tax assets, net		0	0
Effective income tax rate reconciliation [Abstract]
Anticipated income tax benefit at statutory rate		144,795	1,534,176
State income tax expense, net of federal tax effect		(54,083)	(9,350)
Federal income tax effect of change in tax rate		(518,974)	0
Income tax effect of uncertain tax positions		(17,946)	(8,896)
Return to provision adjustments		2,982	(23,070)
Stock-based compensation		(36,233)	(110,066)
Other changes in deferred income tax assets, net		(437)	(13,118)
Decrease (increase) in valuation allowance		452,287	(1,383,156)
Income tax net expense		(27,609)	(13,480)
Tax Credit Carryforward [Line Items]
Federal income tax credits		884,000
Remaining balance of federal income tax expire between 2018 and 2021		533,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense [Abstract]
Gross liability for income taxes that will impact the company's effective tax rate		560,000
Direct reduction to associated deferred tax asset		98,000
Interest and penalties associated with uncertain tax positions		28,000	13,000
Interest and penalties included in the accrued income tax liability for uncertain tax positions		193,000	165,000
Activities related to gross liability for uncertain tax positions [Roll Forward]
Beginning balance	$ 560,373	532,764	519,284
Increases related to prior year tax positions		27,609	13,480
Ending balance		$ 560,373	532,764
Earliest Tax Year [Member]
Tax Credit Carryforward [Line Items]
Federal income tax credit expiration date		Dec. 31, 2018
Latest Tax Year [Member]
Tax Credit Carryforward [Line Items]
Federal income tax credit expiration date		Dec. 31, 2021
Plan [Member]
Income Tax Disclosure [Line Items]
Federal statutory income tax rate	21.00%
Federal [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards		$ 24,590,000
Federal [Member] | Minimum [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, expiration dates		Dec. 31, 2020
Federal [Member] | Maximum [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, expiration dates		Dec. 31, 2036
North Carolina [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards		$ 20,220,000
North Carolina [Member] | Minimum [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, expiration dates		Dec. 31, 2023
North Carolina [Member] | Maximum [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, expiration dates		Dec. 31, 2032
Other State [Member] | Minimum [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, expiration dates		Dec. 31, 2021
Other State [Member] | Maximum [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, expiration dates		Dec. 31, 2036
Hong Kong Tax Code [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards		$ 6,030,000
Valuation allowance		$ (996,000)	$ (996,000)

DISCONTINUED OPERATIONS (Detail

DISCONTINUED OPERATIONS (Details) - USD ($)	Mar. 04, 2016	Dec. 31, 2017	Dec. 31, 2016
Other income [Abstract]
Gain on sale of long-term assets		$ 0	$ 12,398
Pretax loss from discontinued operations		0	(586,124)
Yanbal USA Inc. [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discontinued operations, purchase price for transferred assets, gross	$ 500,000
Discontinued operations, purchase agreement selling expenses	131,000
Discontinued operations, purchase price for transferred assets, net	369,000
Discontinued operations, expense related to certain style advisor incentives	35,000
Discontinued operations, reduction in prepaid expenses	$ 60,000
Assets Related to Discontinued Operations [Abstract]
Discontinued operations, assets		0	0
Discontinued operations, liabilities		$ 0	0
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Net sales			804,585
Costs and expenses [Abstract]
Cost of goods sold			276,100
Sales and marketing			940,685
General and administrative			173,913
Interest expense			11
Total costs and expenses			1,390,709
Loss from discontinued operations			(586,124)
Other income [Abstract]
Gain on sale of long-term assets			12,398
Total other income, net			12,398
Pretax loss from discontinued operations			$ (573,726)

MAJOR CUSTOMERS AND CONCENTRA56

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details) - Customer Concentration Risk [Member]	12 Months Ended
	Dec. 31, 2017		Dec. 31, 2016
Accounts Receivable [Member] | Customer A [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	12.00%		16.00%
Accounts Receivable [Member] | Customer B [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	18.00%			[1]
Total Net Sales [Member] | Customer C [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	21.00%		17.00%
Total Net Sales [Member] | Customer D [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		[2]	23.00%
[1]	Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2016.
[2]	Customer D did not have net sales that represented 10% or more of total net sales for the year ended December 31, 2017.

EMPLOYEE BENEFIT PLAN (Details)

EMPLOYEE BENEFIT PLAN (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
EMPLOYEE BENEFIT PLAN [Abstract]
Company contribution, cost recognized	$ 64,000	$ 102,000

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) - USD ($)	Jan. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Restricted Stock [Member]
Subsequent Event [Line Items]
Restricted stock awards lapsed (in shares)		(209,783)	(253,450)
Restricted stock awards granted (in shares)		420,000	509,250
Subsequent Event [Member] | 2017 Senior Management Equity Incentive Program [Member]
Subsequent Event [Line Items]
Achievement level percentage	75.00%
Subsequent Event [Member] | 2017 Senior Management Equity Incentive Program [Member] | Restricted Stock [Member]
Subsequent Event [Line Items]
Modified percentage of restricted stock	70.00%
Modified percentage of cash in lieu of restricted stock	30.00%
Compensation paid in cash	$ 109,000
Restricted stock awards lapsed (in shares)	(183,000)
Restricted stock awards granted (in shares)	300,000