Charles & Colvard (CTHR) 10-Q 8 Feb 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Feb. 01, 2019
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 Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		21,598,069
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2,019
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Current assets:
Cash and cash equivalents	$ 2,803,621	$ 3,393,186
Restricted cash	201,081	0
Accounts receivable, net	2,972,322	1,765,722
Inventory, net	11,318,267	10,979,891
Prepaid expenses and other assets	1,305,119	916,162
Total current assets	18,600,410	17,054,961
Long-term assets:
Inventory, net	21,474,480	20,848,647
Property and equipment, net	1,200,342	1,144,198
Intangible assets, net	89,729	34,833
Other assets	387,165	389,868
Total long-term assets	23,151,716	22,417,546
TOTAL ASSETS	41,752,126	39,472,507
Current liabilities:
Accounts payable	4,467,137	4,170,952
Accrued expenses and other liabilities	1,125,481	618,945
Total current liabilities	5,592,618	4,789,897
Long-term liabilities:
Deferred rent	315,613	393,051
Accrued income taxes	480,660	471,126
Total long-term liabilities	796,273	864,177
Total liabilities	6,388,891	5,654,074
Commitments and contingencies (Note 9)
Shareholders' equity:
Common stock, no par value; 50,000,000 shares authorized; 21,568,069 and 21,705,173 shares issued and outstanding at December 31, 2018 and June 30, 2018, respectively	54,247,296	54,243,816
Additional paid-in capital	15,203,924	14,962,071
Accumulated deficit	(34,087,985)	(35,387,454)
Total shareholders' equity	35,363,235	33,818,433
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 41,752,126	$ 39,472,507

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares	Dec. 31, 2018	Jun. 30, 2018
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)	21,568,069	21,705,173
Common stock, shares outstanding (in shares)	21,568,069	21,705,173

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) [Abstract]
Net sales	$ 10,139,461	$ 8,536,982	$ 16,734,167	$ 14,745,790
Costs and expenses:
Cost of goods sold	5,346,207	4,926,314	8,959,956	8,409,917
Sales and marketing	2,346,893	2,028,159	3,988,017	3,785,166
General and administrative	1,250,181	1,077,205	2,474,956	2,214,941
Research and development	1,422	81	1,422	570
Total costs and expenses	8,944,703	8,031,759	15,424,351	14,410,594
Income from operations	1,194,758	505,223	1,309,816	335,196
Other (expense) income:
Interest expense	(352)	(444)	(698)	(449)
Loss on foreign currency exchange	(74)	0	(102)	0
Gain on insurance claim settlement	0	183,217	0	183,217
Other expense	0	0	(13)	0
Total other (expense) income	(426)	182,773	(813)	182,768
Income before income taxes	1,194,332	687,996	1,309,003	517,964
Income tax expense	(4,767)	(4,507)	(9,534)	(9,014)
Net income	$ 1,189,565	$ 683,489	$ 1,299,469	$ 508,950
Net income per common share:
Basic (in dollars per share)	$ 0.06	$ 0.03	$ 0.06	$ 0.02
Diluted (in dollars per share)	$ 0.05	$ 0.03	$ 0.06	$ 0.02
Weighted average number of shares used in computing net income per common share:
Basic (in shares)	21,468,569	21,222,228	21,461,773	21,193,793
Diluted (in shares)	21,681,484	21,731,440	21,623,967	21,536,020

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 1,299,469	$ 508,950
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	230,013	207,854
Stock-based compensation	243,082	237,396
(Recovery of) uncollectible accounts		(1,000)
Provision for uncollectible accounts	8,056
Provision for sales returns	635,000	67,000
Provision for inventory reserves	52,000	551,000
Provision for accounts receivable discounts	38,788	0
Gain on insurance claim settlement	0	(183,217)
Changes in operating assets and liabilities:
Accounts receivable	(1,888,444)	(1,451,017)
Inventory	(1,016,209)	(2,353,372)
Prepaid expenses and other assets, net	(386,254)	(78,294)
Accounts payable	296,185	601,185
Deferred rent	(77,438)	(69,079)
Accrued income taxes	9,534	9,014
Accrued expenses and other liabilities	506,536	303,741
Net cash used in operating activities	(49,682)	(1,649,839)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(285,377)	(44,757)
Intangible assets	(55,676)	(508)
Net cash used in investing activities	(341,053)	(45,265)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock option exercises	2,251	0
Net cash provided by financing activities	2,251	0
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(388,484)	(1,695,104)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	3,393,186	6,289,111
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	3,004,702	4,594,007
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	0	0
Cash paid during the period for taxes	$ 0	$ 0

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	6 Months Ended
	Dec. 31, 2018
DESCRIPTION OF BUSINESS [Abstract]
DESCRIPTION OF BUSINESS	1. DESCRIPTION OF BUSINESS Charles & Colvard, Ltd. (the “Company”), a North Carolina corporation founded in 1995, manufactures, markets, and distributes Charles & Colvard Created Moissanite ®

BASIS OF PRESENTATION AND SIGNI

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Dec. 31, 2018
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements as of and for the three and six months ended December 31, 2018 and 2017 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2018 is derived from the audited financial statements as of that date. The accompanying statements should be read in conjunction with the audited financial statements and related notes, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Transition Report on Form 10-KT (the “2018 Transition Report”) for the six-month period ended June 30, 2018 (the “transition period ended June 30, 2018”) filed with the SEC on September 7, 2018. The accompanying condensed consolidated financial statements as of and for the three and six months ended December 31, 2018 and 2017, and as of June 30, 2018, include the accounts of the Company and its wholly owned subsidiaries charlesandcolvard.com, LLC, formed in 2011; Charles & Colvard Direct, LLC, formed in 2011; and Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary, which was re-activated in December 2017. Charles & Colvard Direct, LLC, had no operating activity during the six-month periods ended December 31, 2018 or 2017. Charles & Colvard (HK) Ltd. previously became dormant in the second quarter of 2009 and has had no operating activity since its operations ceased in 2008. All intercompany accounts have been eliminated. Significant Accounting Policies – Use of Estimates Reclassifications – Cash and Cash Equivalents – Restricted Cash – White Oak Commercial Finance, LLC (“White Oak”) The Company has full access to its cash balances without restriction following the period of time such cash is held by White Oak. For additional information regarding the Company’s asset-based revolving credit facility, see Note 10, “Line of Credit.” The reconciliation of cash, cash equivalents, and restricted cash, as presented on the Condensed Consolidated Statements of Cash Flows, consists of the following as of the dates presented: December 31, 2018 December 31, 2017 Cash and cash equivalents $ 2,803,621 $ 4,594,007 Restricted cash 201,081 - Total cash, cash equivalents, and restricted cash $ 3,004,702 $ 4,594,007 Recently Adopted/Issued Accounting Pronouncements – In June 2018, the FASB issued guidance that is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees. This new guidance of the adoption of this new guidance will not be material to the Company’s financial statements.

SEGMENT INFORMATION AND GEOGRAP

SEGMENT INFORMATION AND GEOGRAPHIC DATA	6 Months Ended
	Dec. 31, 2018
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. The Company manages its business through two operating and reportable segments based on its distribution channels to sell its product lines, loose jewels and finished jewelry: its “Online Channels” segment, which consists of e-commerce outlets including charlesandcolvard.com, third-party online marketplaces, drop-ship, and other pure-play, exclusively e-commerce outlets; and its “Traditional” segment, which consists of wholesale, retail, and historically television customers. The accounting policies of the Online Channels segment and Traditional segment are the same as those described in Note 2, “Basis of Presentation and Significant Accounting Policies” of this Quarterly Report on Form 10-Q and in the Notes to the Consolidated Financial Statements in the 2018 Transition Report. 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 between its Traditional segment and its Online Channels segment primarily based on net sales and number of employees to arrive at segment operating income (loss). Unallocated expenses remain in its Traditional segment. Summary financial information by reportable segment is as follows: Three Months Ended December 31, 2018 Online Channels Traditional Total Net sales Finished jewelry $ 4,357,713 $ 839,543 $ 5,197,256 Loose jewels 1,098,452 3,843,753 4,942,205 Total $ 5,456,165 $ 4,683,296 $ 10,139,461 Product line cost of goods sold Finished jewelry $ 1,913,201 $ 558,427 $ 2,471,628 Loose jewels 433,749 2,036,665 2,470,414 Total $ 2,346,950 $ 2,595,092 $ 4,942,042 Product line gross profit Finished jewelry $ 2,444,512 $ 281,116 $ 2,725,628 Loose jewels 664,703 1,807,088 2,471,791 Total $ 3,109,215 $ 2,088,204 $ 5,197,419 Operating income $ 806,591 $ 388,167 $ 1,194,758 Depreciation and amortization $ 43,063 $ 78,734 $ 121,797 Capital expenditures $ 61,600 $ 59,678 $ 121,278 Three Months Ended December 31, 2017 Online Channels Traditional Total Net sales Finished jewelry $ 3,723,936 $ 1,003,133 $ 4,727,069 Loose jewels 885,593 2,924,320 3,809,913 Total $ 4,609,529 $ 3,927,453 $ 8,536,982 Product line cost of goods sold Finished jewelry $ 1,903,087 $ 717,245 $ 2,620,332 Loose jewels 425,113 1,451,869 1,876,982 Total $ 2,328,200 $ 2,169,114 $ 4,497,314 Product line gross profit Finished jewelry $ 1,820,849 $ 285,888 $ 2,106,737 Loose jewels 460,480 1,472,451 1,932,931 Total $ 2,281,329 $ 1,758,339 $ 4,039,668 Operating income (loss) $ 866,784 $ (361,561 ) $ 505,223 Depreciation and amortization $ 28,895 $ 74,402 $ 103,297 Capital expenditures $ 1,547 $ 23,559 $ 25,106 Six Months Ended December 31, 2018 Online Channels Traditional Total Net sales Finished jewelry $ 6,473,653 $ 1,278,240 $ 7,751,893 Loose jewels 2,065,612 6,916,662 8,982,274 Total $ 8,539,265 $ 8,194,902 $ 16,734,167 Product line cost of goods sold Finished jewelry $ 2,746,591 $ 781,076 $ 3,527,667 Loose jewels 922,034 3,597,144 4,519,178 Total $ 3,668,625 $ 4,378,220 $ 8,046,845 Product line gross profit Finished jewelry $ 3,727,062 $ 497,164 $ 4,224,226 Loose jewels 1,143,578 3,319,518 4,463,096 Total $ 4,870,640 $ 3,816,682 $ 8,687,322 Operating income $ 890,338 $ 419,478 $ 1,309,816 Depreciation and amortization $ 71,139 $ 158,874 $ 230,013 Capital expenditures $ 62,850 $ 222,527 $ 285,377 Six Months Ended December 31, 2017 Online Channels Traditional Total Net sales Finished jewelry $ 5,107,288 $ 1,730,117 $ 6,837,405 Loose jewels 1,576,972 6,331,413 7,908,385 Total $ 6,684,260 $ 8,061,530 $ 14,745,790 Product line cost of goods sold Finished jewelry $ 2,513,849 $ 1,096,044 $ 3,609,893 Loose jewels 792,490 3,329,079 4,121,569 Total $ 3,306,339 $ 4,425,123 $ 7,731,462 Product line gross profit Finished jewelry $ 2,593,439 $ 634,073 $ 3,227,512 Loose jewels 784,482 3,002,334 3,786,816 Total $ 3,377,921 $ 3,636,407 $ 7,014,328 Operating income (loss) $ 586,155 $ (250,959 ) $ 335,196 Depreciation and amortization $ 59,172 $ 148,683 $ 207,855 Capital expenditures $ 1,548 $ 43,209 $ 44,757 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 condensed consolidated financial statements is as follows: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Product line cost of goods sold $ 4,942,042 $ 4,497,314 $ 8,046,845 $ 7,731,462 Non-capitalized manufacturing and production control expenses 307,164 330,634 653,768 629,493 Freight out 203,669 143,987 302,789 244,003 Inventory valuation allowances 3,000 554,000 52,000 551,000 Other inventory adjustments (109,668 ) (599,621 ) (95,446 ) (746,041 ) Cost of goods sold $ 5,346,207 $ 4,926,314 $ 8,959,956 $ 8,409,917 The Company recognizes sales by geographic area based on the country in which the customer is based. Sales to international end consumers made through our transactional website, charlesandcolvard.com, are included in international sales for financial reporting purposes. During periods prior to the quarter ended December 31, 2018, sales to international end consumers made through charlesandcolvard.com were included in U.S. sales because products were shipped and invoiced to a U.S.-based intermediary party that assumed all international shipping and credit risks. 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. All intangible assets, as well as property and equipment, as of December 31, 2018 and June 30, 2018, are held and located in the United States. The following presents net sales by geographic area: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Net sales United States $ 8,870,317 $ 7,969,735 $ 14,693,186 $ 13,720,560 International 1,269,144 567,247 2,040,981 1,025,230 Total $ 10,139,461 $ 8,536,982 $ 16,734,167 $ 14,745,790

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Dec. 31, 2018
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. All financial instruments are reflected in the condensed 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. For the six months ended December 31, 2018 and 2017, no impairment was recorded.

INVENTORIES

INVENTORIES	6 Months Ended
	Dec. 31, 2018
INVENTORIES [Abstract]
INVENTORIES	5. INVENTORIES The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2018 June 30, 2018 Raw materials $ 4,687,528 $ 5,083,436 Work-in-process 10,758,871 10,659,786 Finished goods 18,098,640 17,483,773 Finished goods on consignment 1,226,296 523,971 Supplies inventory 41,412 45,572 Less: inventory reserves (2,020,000 ) (1,968,000 ) Total $ 32,792,747 $ 31,828,538 Short-term portion $ 11,318,267 $ 10,979,891 Long-term portion 21,474,480 20,848,647 Total $ 32,792,747 $ 31,828,538 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 expected 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, 2018 and June 30, 2018, work-in-process inventories issued to active production jobs approximated $1.92 million and $2.45 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 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. While we expect expansion of our finished jewelry product offerings 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. We believe these finished jewelry products are less subject to significant obsolescence risk due to their classic styling. In addition, the Company generally 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 subsidiaries carry no net inventories, and inventory is transferred without intercompany markup from the parent entity as product line cost of goods sold when sold to the end consumer. The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2018 June 30, 2018 Finished jewelry: Raw materials $ 678,090 $ 595,649 Work-in-process 1,114,425 1,196,268 Finished goods 6,118,482 5,517,951 Finished goods on consignment 1,037,362 476,648 Total finished jewelry $ 8,948,359 $ 7,786,516 Loose jewels: Raw materials $ 4,009,438 $ 4,487,787 Work-in-process 9,644,446 9,463,518 Finished goods 9,983,158 10,015,822 Finished goods on consignment 165,934 29,323 Total loose jewels 23,802,976 23,996,450 Total supplies inventory 41,412 45,572 Total inventory $ 32,792,747 $ 31,828,538 Total net finished jewelry inventories at December 31, 2018 and June 30, 2018, including inventory on consignment net of reserves and finished jewelry featuring moissanite manufactured by the Company, were $8.95 million and $7.79 million, respectively. Total net loose jewel inventories at December 31, 2018 and June 30, 2018, including inventory on consignment net of reserves, were $23.80 million and $24.00 million, respectively. As of December 31, 2018 and June 30, 2018, management established an obsolescence reserve of $1.34 million and $1.30 million, respectively. Typically, in the jewelry industry, slow-moving or discontinued lines are sold as closeouts or liquidated in sales channels such as third-party online marketplaces, drop-ship, and other pure-play, exclusively e-commerce outlets. Regularly, management reviews the legacy loose jewel inventory for any lower of cost or net realizable value and obsolescence issues. Accordingly, based on current demand during the three and six months ended December 31, 2018, and ongoing feedback from distribution 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. Accordingly, management’s analysis revealed that while some of these items were sold during the three and six months ended December 31, 2018, the remaining items in the Company’s legacy inventory required an increase in the lower of cost or net realizable value reserve to approximately $1.33 million as of December 31, 2018 from $1.29 million as of June 30, 2018. As of December 31, 2018 and June 30, 2018, 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 $5,000 and $7,000, 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, 2018 and June 30, 2018 management established a rework reserve for recut and repairs of $482,000 and $534,000, respectively. Loose jewel inventories at December 31, 2018 and June 30, 2018 included recut reserves of $482,000 and $418,000, respectively. The finished jewelry inventories at December 31, 2018 and June 30, 2018 include a repairs reserve of $0 and $116,000, respectively. As of December 31, 2018 and June 30, 2018 management established a shrinkage reserve of $199,000 and $136,000, respectively. The loose jewel inventories at December 31, 2018 and June 30, 2018 include shrinkage reserves of $48,000 and $48,000, respectively. The finished jewelry inventories at December 31, 2018 and June 30, 2018 include shrinkage reserves of $151,000 and $88,000, 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 $23,000 and $18,000 as of , 2018 and June 30, 2018, 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 , 2018 and June 30, 2018 include shrinkage reserves of $9,000 and $11,000, respectively. The finished jewelry inventories on consignment at , 2018 and June 30, 2018 include shrinkage reserves of $14,000 and $7,000, respectively. The need for adjustments to inventory-related reserves and valuation allowances is evaluated on a period-by-period basis. Changes to the Company’s inventory reserves and allowances are accounted for in the current accounting period in which a change in such reserves and allowances is observed and deemed appropriate, including changes in management’s estimates used in the process to determine such reserves and valuation allowances.

RETURNS ASSET AND REFUND LIABIL

RETURNS ASSET AND REFUND LIABILITIES	6 Months Ended
	Dec. 31, 2018
RETURNS ASSET AND REFUND LIABILITIES [Abstract]
RETURNS ASSET AND REFUND LIABILITIES	6. RETURNS ASSET AND REFUND LIABILITIES In connection with the Company’s adoption of the new he Company established a returns asset account and a refund liabilities account to record the effects of its estimated product returns and sales returns allowance. The Company’s returns asset and refund liabilities are updated at the end of each financial reporting period and the effect of such changes are accounted for in the period in which such changes occur. The Company estimates anticipated product returns in the form of a refund liability based on historical return percentages and current period sales levels. The Company also accrues a related returns asset for goods expected to be returned in salable condition, less any expected costs to recover such goods, including return shipping costs that the Company may incur. As of December 31, 2018 and June 30, 2018, the Company’s refund liabilities balances were $1.28 million and $648,000, respectively, and are included within accounts receivable, net, in the accompanying condensed consolidated balance sheets. As of December 31, 2018 and June 30, 2018, the Company’s returns asset balances were $472,000 and $250,000, respectively, and are included within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. Prior to the adoption of the new

ACCRUED EXPENSES AND OTHER LIAB

ACCRUED EXPENSES AND OTHER LIABILITIES	6 Months Ended
	Dec. 31, 2018
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
ACCRUED EXPENSES AND OTHER LIABILITIES	7. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities, current, consist of the following as of the dates presented: December 31, 2018 June 30, 2018 Accrued compensation and related benefits $ 669,875 $ 359,077 Deferred rent 147,913 139,558 Accrued cooperative advertising 115,796 60,784 Accrued sales and use tax 142,338 17,149 Other 49,559 42,377 Total accrued expenses and other liabilities $ 1,125,481 $ 618,945

INCOME TAXES

INCOME TAXES	6 Months Ended
	Dec. 31, 2018
INCOME TAXES [Abstract]
INCOME TAXES	8. INCOME TAXES The Company recognized an income tax net expense of approximately $5,000 for estimated taxes, penalties, and interest associated with uncertain tax positions for each of the three months ended December 31, 2018 and 2017, and approximately $10,000 and $9,000, respectively, for the six months ended December 31, 2018 and 2017. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Dec. 31, 2018
COMMITMENTS AND CONTINGENCIES [Abstract]
COMMITMENTS AND CONTINGENCIES	9. COMMITMENTS AND CONTINGENCIES Purchase Commitments On December 12, 2014, the Company entered into an 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 was scheduled to expire on June 24, 2018, unless extended by the parties. Effective June 22, 2018, the Supply Agreement was amended to extend the expiration date to June 25, 2023. The Supply Agreement was also amended to (i) provide the Company with one option, subject to certain conditions, to unilaterally extend the term of the Supply Agreement for an additional two-year period following expiration of the initial term; (ii) establish a process by which Cree may begin producing alternate SiC material based on the Company’s specifications that will give the Company the flexibility to use the materials in a broader variety of its products; and (iii) permit the Company to purchase certain amounts of SiC materials from third parties under limited conditions. The Company’s total purchase commitment under the Supply Agreement until June 2023 is approximately $52.95 million, of which approximately $48.46 remains to be purchased as of December 31, 2018. Over the life of the Supply Agreement, as amended, the Company’s future minimum annual purchase commitments of SiC crystals range from approximately $9 million to $12 million each year. During the six months ended December 31, 2018, the Company purchased approximately $4.43 million of SiC crystals from Cree pursuant to the terms of the Supply Agreement, as amended. During the six months ended December 31, 2017, the Company purchased approximately $4.97 million of SiC crystals from Cree. The Company’s purchases in 2017 were pursuant to the terms and conditions of the Supply Agreement prior to the effective date of its amendment as of June 22, 2018.

LINE OF CREDIT

LINE OF CREDIT	6 Months Ended
	Dec. 31, 2018
LINE OF CREDIT [Abstract]
LINE OF CREDIT	10. LINE OF CREDIT On July 13, 2018, the Company and its wholly-owned subsidiary, charlesandcolvard.com, LLC (collectively, the “Borrowers”), obtained a $5.00 million asset-based revolving credit facility (the “White Oak Credit Facility”) from White Oak. The White Oak Credit Facility may be used for general corporate and working capital purposes, including permitted acquisitions. The White Oak Credit Facility, which matures on July 13, 2021, is guaranteed by Charles & Colvard Direct, LLC, a wholly-owned subsidiary of the Company. Under the terms of the White Oak Credit Facility, the Borrowers must maintain at least $500,000 in excess availability at all times. The White Oak Credit Facility contains no other financial covenants. Advances under the White Oak Credit Facility may be either revolving or non-revolving. As of December 31, 2018, the Company had not borrowed against the White Oak Credit Facility. Prior to obtaining the White Oak Credit Facility, the Company and its wholly owned subsidiaries, Charles & Colvard Direct, LLC and charlesandcolvard.com, LLC), had a $10.00 million asset-based revolving credit facility from Wells Fargo . This asset-based revolving credit facility (the “ Wells Fargo Credit Facility”) was available 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 effective date of the Wells Fargo Credit Facility was June 25, 2014, and it was scheduled to mature on June 25, 2017. Any advances would have accrued 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 would have been payable monthly in arrears. Principal outstanding during an event of default, which did not occur during the term of the Wells Fargo Credit Facility, would have accrued interest at a rate of 3% in excess of the above rate. The Company had not borrowed against the Wells Fargo Credit Facility as of June 25, 2018, the date upon which the Wells Fargo Credit Facility matured and was terminated in accordance with its terms.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Dec. 31, 2018
STOCK-BASED COMPENSATION [Abstract]
STOCK-BASED COMPENSATION	11. STOCK-BASED COMPENSATION The following table summarizes the components of the Company’s stock-based compensation included in net income for the periods presented: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Employee stock options $ 56,575 $ 86,565 $ 114,747 $ 180,196 Restricted stock awards 115,331 31,728 128,335 57,200 Totals $ 171,906 $ 118,293 $ 243,082 $ 237,396 No stock-based compensation was capitalized as a cost of inventory during the three and six months ended December 31, 2018 and 2017. Stock Options The following is a summary of the stock option activity for the six months ended December 31, 2018: Shares Weighted Average Exercise Price Outstanding, June 30, 2018 2,388,169 $ 1.46 Granted 275,025 $ 1.00 Exercised (2,500 ) $ 0.90 Forfeited (12,500 ) $ 1.05 Expired (64,256 ) $ 1.73 Outstanding, December 31, 2018 2,583,938 $ 1.41 The weighted average grant date fair value of stock options granted during the six months ended December 31, 2018 was $0.57. The total fair value of stock options that vested during the six months ended December 31, 2018 was approximately $100,000. The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted average assumptions for stock options granted during the six months ended December 31, 2018: Dividend yield 0.0 % Expected volatility 61.2 % Risk-free interest rate 3.11 % Expected lives (years) 5.5 Although the Company issued dividends in prior years, a dividend yield of zero was used due to the uncertainty of future dividend payments. Volatility is a measure of the amount by which a financial variable such as share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. . The expected lives of the stock options issued since 2014 represent the estimated period of time until exercise or forfeiture and are based on the simplified method of using the mid-point between the vesting term and the original contractual term. Stock . Expected forfeitures are based on the historical forfeiture rates by employee class. The following table summarizes information about stock options outstanding at December 31, 2018: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 12/31/2018 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2018 Weighted Average Remaining Contractual (Years) Weighted Average Exercise Price Balance as of 12/31/2018 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,583,938 7.36 $ 1.41 1,996,413 6.84 $ 1.51 2,483,469 7.30 $ 1.42 As of December 31, 2018, the unrecognized stock-based compensation expense related to unvested stock options was approximately $297,000, which is expected to be recognized over a weighted average period of approximately 19 months. The aggregate intrinsic value of stock options outstanding, exercisable, and vested or expected to vest at December 31, 2018 was approximately $6,000. This amount is before applicable income taxes and represents the closing market price of the Company’s common stock at December 31, 2018 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 three months ended December 31, 2018 and three and six months ended December 31, 2017. Restricted Stock The following is a summary of the restricted stock activity for the six months ended December 31, 2018: Shares Weighted Average Grant Date Fair Value Unvested, June 30, 2018 264,000 $ 1.25 Vested (24,896 ) $ 1.31 Canceled (109,604 ) $ 1.31 Unvested, December 31, 2018 129,500 $ 1.18 No restricted stock shares were granted during the six months ended December 31, 2018. As of December 31, 2018, the estimated unrecognized stock-based compensation expense related to unvested restricted shares subject to achievement of performance goals was approximately $32,000, all of which is expected to be recognized over a weighted average period of approximately one month. Dividends The Company has not paid any cash dividends in the current fiscal year through December 31, 2018.

NET INCOME PER COMMON SHARE

NET INCOME PER COMMON SHARE	6 Months Ended
	Dec. 31, 2018
NET INCOME PER COMMON SHARE [Abstract]
NET INCOME PER COMMON SHARE	12. NET INCOME PER COMMON SHARE Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods. Diluted net income per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of stock options and unvested restricted shares that are computed using the treasury stock method. Antidilutive stock awards consist of stock options that would have been antidilutive in the application of the treasury stock method. The following table reconciles the differences between the basic and diluted net income per share presentations: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Numerator: Net income $ 1,189,565 $ 683,489 $ 1,299,469 $ 508,950 Denominator: Weighted average common shares outstanding: Basic 21,468,569 21,222,228 21,461,773 21,193,793 Effect of dilutive securities 212,915 509,212 162,194 342,227 Diluted 21,681,484 21,731,440 21,623,967 21,536,020 Net income per common share: Basic $ 0.06 $ 0.03 $ 0.06 $ 0.02 Diluted $ 0.05 $ 0.03 $ 0.06 $ 0.02 For the three and six months ended December 31, 2018 stock options to purchase approximately 2.44 million and 2.45 million shares, respectively, and for the three and six months ended December 31, 2017 stock options to purchase approximately 2.03 million and 2.19 million shares, respectively, were excluded from the computation of diluted net income 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 income per common share. For each of the three- and six-month periods ended December 31, 2018 and 2017, no restricted shares that were issued but not yet vested were excluded from the computation of diluted net income per common share.

MAJOR CUSTOMERS AND CONCENTRATI

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	6 Months Ended
	Dec. 31, 2018
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	13. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and restricted cash and trade accounts receivable. At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits of $250,000 per depositor at each financial institution. The Company has never experienced any losses related to these balances. Non-interest-bearing amounts on deposit in excess of FDIC insurable limits at December 31, 2018 approximated $2.47 million. 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 three and six months ended December 31, 2018 and 2017, the Company has not experienced significant accounts receivable write-offs related to revenue arrangements with extended payment terms. 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 10% or more of total gross accounts receivable as of the dates presented: December 31, 2018 June 30, 2018 Customer A 23 % 10 % Customer B 13 % 23 % Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Customer A 13 % 10 % 11 % 11 % Customer B 15 % 13 % 14 % 17 %

BASIS OF PRESENTATION AND SIG_2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Dec. 31, 2018
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements as of and for the three and six months ended December 31, 2018 and 2017 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2018 is derived from the audited financial statements as of that date. The accompanying statements should be read in conjunction with the audited financial statements and related notes, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Transition Report on Form 10-KT (the “2018 Transition Report”) for the six-month period ended June 30, 2018 (the “transition period ended June 30, 2018”) filed with the SEC on September 7, 2018. The accompanying condensed consolidated financial statements as of and for the three and six months ended December 31, 2018 and 2017, and as of June 30, 2018, include the accounts of the Company and its wholly owned subsidiaries charlesandcolvard.com, LLC, formed in 2011; Charles & Colvard Direct, LLC, formed in 2011; and Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary, which was re-activated in December 2017. Charles & Colvard Direct, LLC, had no operating activity during the six-month periods ended December 31, 2018 or 2017. Charles & Colvard (HK) Ltd. previously became dormant in the second quarter of 2009 and has had no operating activity since its operations ceased in 2008. All intercompany accounts have been eliminated.
Use of Estimates	Use of Estimates
Reclassifications	Reclassifications –
Cash and Cash Equivalents	Cash and Cash Equivalents –
Restricted Cash	Restricted Cash – White Oak Commercial Finance, LLC (“White Oak”) The Company has full access to its cash balances without restriction following the period of time such cash is held by White Oak. For additional information regarding the Company’s asset-based revolving credit facility, see Note 10, “Line of Credit.” The reconciliation of cash, cash equivalents, and restricted cash, as presented on the Condensed Consolidated Statements of Cash Flows, consists of the following as of the dates presented: December 31, 2018 December 31, 2017 Cash and cash equivalents $ 2,803,621 $ 4,594,007 Restricted cash 201,081 - Total cash, cash equivalents, and restricted cash $ 3,004,702 $ 4,594,007
Recently Adopted/Issued Accounting Pronouncements	Recently Adopted/Issued Accounting Pronouncements – In June 2018, the FASB issued guidance that is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees. This new guidance of the adoption of this new guidance will not be material to the Company’s financial statements.

BASIS OF PRESENTATION AND SIG_3

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Dec. 31, 2018
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Cash, Cash Equivalents and Restricted Cash	The reconciliation of cash, cash equivalents, and restricted cash, as presented on the Condensed Consolidated Statements of Cash Flows, consists of the following as of the dates presented: December 31, 2018 December 31, 2017 Cash and cash equivalents $ 2,803,621 $ 4,594,007 Restricted cash 201,081 - Total cash, cash equivalents, and restricted cash $ 3,004,702 $ 4,594,007

SEGMENT INFORMATION AND GEOGR_2

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)	6 Months Ended
	Dec. 31, 2018
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Financial Information by Reportable Segment	Summary financial information by reportable segment is as follows: Three Months Ended December 31, 2018 Online Channels Traditional Total Net sales Finished jewelry $ 4,357,713 $ 839,543 $ 5,197,256 Loose jewels 1,098,452 3,843,753 4,942,205 Total $ 5,456,165 $ 4,683,296 $ 10,139,461 Product line cost of goods sold Finished jewelry $ 1,913,201 $ 558,427 $ 2,471,628 Loose jewels 433,749 2,036,665 2,470,414 Total $ 2,346,950 $ 2,595,092 $ 4,942,042 Product line gross profit Finished jewelry $ 2,444,512 $ 281,116 $ 2,725,628 Loose jewels 664,703 1,807,088 2,471,791 Total $ 3,109,215 $ 2,088,204 $ 5,197,419 Operating income $ 806,591 $ 388,167 $ 1,194,758 Depreciation and amortization $ 43,063 $ 78,734 $ 121,797 Capital expenditures $ 61,600 $ 59,678 $ 121,278 Three Months Ended December 31, 2017 Online Channels Traditional Total Net sales Finished jewelry $ 3,723,936 $ 1,003,133 $ 4,727,069 Loose jewels 885,593 2,924,320 3,809,913 Total $ 4,609,529 $ 3,927,453 $ 8,536,982 Product line cost of goods sold Finished jewelry $ 1,903,087 $ 717,245 $ 2,620,332 Loose jewels 425,113 1,451,869 1,876,982 Total $ 2,328,200 $ 2,169,114 $ 4,497,314 Product line gross profit Finished jewelry $ 1,820,849 $ 285,888 $ 2,106,737 Loose jewels 460,480 1,472,451 1,932,931 Total $ 2,281,329 $ 1,758,339 $ 4,039,668 Operating income (loss) $ 866,784 $ (361,561 ) $ 505,223 Depreciation and amortization $ 28,895 $ 74,402 $ 103,297 Capital expenditures $ 1,547 $ 23,559 $ 25,106 Six Months Ended December 31, 2018 Online Channels Traditional Total Net sales Finished jewelry $ 6,473,653 $ 1,278,240 $ 7,751,893 Loose jewels 2,065,612 6,916,662 8,982,274 Total $ 8,539,265 $ 8,194,902 $ 16,734,167 Product line cost of goods sold Finished jewelry $ 2,746,591 $ 781,076 $ 3,527,667 Loose jewels 922,034 3,597,144 4,519,178 Total $ 3,668,625 $ 4,378,220 $ 8,046,845 Product line gross profit Finished jewelry $ 3,727,062 $ 497,164 $ 4,224,226 Loose jewels 1,143,578 3,319,518 4,463,096 Total $ 4,870,640 $ 3,816,682 $ 8,687,322 Operating income $ 890,338 $ 419,478 $ 1,309,816 Depreciation and amortization $ 71,139 $ 158,874 $ 230,013 Capital expenditures $ 62,850 $ 222,527 $ 285,377 Six Months Ended December 31, 2017 Online Channels Traditional Total Net sales Finished jewelry $ 5,107,288 $ 1,730,117 $ 6,837,405 Loose jewels 1,576,972 6,331,413 7,908,385 Total $ 6,684,260 $ 8,061,530 $ 14,745,790 Product line cost of goods sold Finished jewelry $ 2,513,849 $ 1,096,044 $ 3,609,893 Loose jewels 792,490 3,329,079 4,121,569 Total $ 3,306,339 $ 4,425,123 $ 7,731,462 Product line gross profit Finished jewelry $ 2,593,439 $ 634,073 $ 3,227,512 Loose jewels 784,482 3,002,334 3,786,816 Total $ 3,377,921 $ 3,636,407 $ 7,014,328 Operating income (loss) $ 586,155 $ (250,959 ) $ 335,196 Depreciation and amortization $ 59,172 $ 148,683 $ 207,855 Capital expenditures $ 1,548 $ 43,209 $ 44,757
Reconciliation of Product Line Cost of Goods Sold to Cost of Goods Sold as Reported in Consolidated Financial Statements	A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the condensed consolidated financial statements is as follows: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Product line cost of goods sold $ 4,942,042 $ 4,497,314 $ 8,046,845 $ 7,731,462 Non-capitalized manufacturing and production control expenses 307,164 330,634 653,768 629,493 Freight out 203,669 143,987 302,789 244,003 Inventory valuation allowances 3,000 554,000 52,000 551,000 Other inventory adjustments (109,668 ) (599,621 ) (95,446 ) (746,041 ) Cost of goods sold $ 5,346,207 $ 4,926,314 $ 8,959,956 $ 8,409,917
Net Sales by Geographic Area	The following presents net sales by geographic area: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Net sales United States $ 8,870,317 $ 7,969,735 $ 14,693,186 $ 13,720,560 International 1,269,144 567,247 2,040,981 1,025,230 Total $ 10,139,461 $ 8,536,982 $ 16,734,167 $ 14,745,790

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Dec. 31, 2018
INVENTORIES [Abstract]
Inventory, Net of Reserves	The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2018 June 30, 2018 Raw materials $ 4,687,528 $ 5,083,436 Work-in-process 10,758,871 10,659,786 Finished goods 18,098,640 17,483,773 Finished goods on consignment 1,226,296 523,971 Supplies inventory 41,412 45,572 Less: inventory reserves (2,020,000 ) (1,968,000 ) Total $ 32,792,747 $ 31,828,538 Short-term portion $ 11,318,267 $ 10,979,891 Long-term portion 21,474,480 20,848,647 Total $ 32,792,747 $ 31,828,538
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, 2018 June 30, 2018 Finished jewelry: Raw materials $ 678,090 $ 595,649 Work-in-process 1,114,425 1,196,268 Finished goods 6,118,482 5,517,951 Finished goods on consignment 1,037,362 476,648 Total finished jewelry $ 8,948,359 $ 7,786,516 Loose jewels: Raw materials $ 4,009,438 $ 4,487,787 Work-in-process 9,644,446 9,463,518 Finished goods 9,983,158 10,015,822 Finished goods on consignment 165,934 29,323 Total loose jewels 23,802,976 23,996,450 Total supplies inventory 41,412 45,572 Total inventory $ 32,792,747 $ 31,828,538

ACCRUED EXPENSES AND OTHER LI_2

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)	6 Months Ended
	Dec. 31, 2018
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Accrued Expenses and Other Liabilities	Accrued expenses and other liabilities, current, consist of the following as of the dates presented: December 31, 2018 June 30, 2018 Accrued compensation and related benefits $ 669,875 $ 359,077 Deferred rent 147,913 139,558 Accrued cooperative advertising 115,796 60,784 Accrued sales and use tax 142,338 17,149 Other 49,559 42,377 Total accrued expenses and other liabilities $ 1,125,481 $ 618,945

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Dec. 31, 2018
STOCK-BASED COMPENSATION [Abstract]
Stock Based Compensation	The following table summarizes the components of the Company’s stock-based compensation included in net income for the periods presented: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Employee stock options $ 56,575 $ 86,565 $ 114,747 $ 180,196 Restricted stock awards 115,331 31,728 128,335 57,200 Totals $ 171,906 $ 118,293 $ 243,082 $ 237,396
Stock Option Activity	The following is a summary of the stock option activity for the six months ended December 31, 2018: Shares Weighted Average Exercise Price Outstanding, June 30, 2018 2,388,169 $ 1.46 Granted 275,025 $ 1.00 Exercised (2,500 ) $ 0.90 Forfeited (12,500 ) $ 1.05 Expired (64,256 ) $ 1.73 Outstanding, December 31, 2018 2,583,938 $ 1.41
Weighted Average Assumptions for Stock Options Granted	The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted average assumptions for stock options granted during the six months ended December 31, 2018: Dividend yield 0.0 % Expected volatility 61.2 % Risk-free interest rate 3.11 % Expected lives (years) 5.5
Information About Stock Options Outstanding	The following table summarizes information about stock options outstanding at December 31, 2018: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 12/31/2018 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2018 Weighted Average Remaining Contractual (Years) Weighted Average Exercise Price Balance as of 12/31/2018 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,583,938 7.36 $ 1.41 1,996,413 6.84 $ 1.51 2,483,469 7.30 $ 1.42
Restricted Stock Activity	The following is a summary of the restricted stock activity for the six months ended December 31, 2018: Shares Weighted Average Grant Date Fair Value Unvested, June 30, 2018 264,000 $ 1.25 Vested (24,896 ) $ 1.31 Canceled (109,604 ) $ 1.31 Unvested, December 31, 2018 129,500 $ 1.18

NET INCOME PER COMMON SHARE (Ta

NET INCOME PER COMMON SHARE (Tables)	6 Months Ended
	Dec. 31, 2018
NET INCOME PER COMMON SHARE [Abstract]
Reconciliation of Basic and Diluted Net Income Per Share	The following table reconciles the differences between the basic and diluted net income per share presentations: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Numerator: Net income $ 1,189,565 $ 683,489 $ 1,299,469 $ 508,950 Denominator: Weighted average common shares outstanding: Basic 21,468,569 21,222,228 21,461,773 21,193,793 Effect of dilutive securities 212,915 509,212 162,194 342,227 Diluted 21,681,484 21,731,440 21,623,967 21,536,020 Net income per common share: Basic $ 0.06 $ 0.03 $ 0.06 $ 0.02 Diluted $ 0.05 $ 0.03 $ 0.06 $ 0.02

MAJOR CUSTOMERS AND CONCENTRA_2

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)	6 Months Ended
	Dec. 31, 2018
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]
Customers That Represent Greater Than or Equal to 10% of Total Net Sales and Receivables	The following is a summary of customers that represent 10% or more of total gross accounts receivable as of the dates presented: December 31, 2018 June 30, 2018 Customer A 23 % 10 % Customer B 13 % 23 % Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Customer A 13 % 10 % 11 % 11 % Customer B 15 % 13 % 14 % 17 %

BASIS OF PRESENTATION AND SIG_4

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Cash, Cash Equivalents and Restricted Cash [Abstract]
Cash and cash equivalents	$ 2,803,621	$ 3,393,186	$ 4,594,007
Restricted cash	201,081	0	0
Total cash, cash equivalents, and restricted cash	$ 3,004,702	$ 3,393,186	$ 4,594,007	$ 6,289,111

SEGMENT INFORMATION AND GEOGR_3

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Product Line (Details)	3 Months Ended		6 Months Ended
	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2018USD ($)Segment	Dec. 31, 2017USD ($)
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	$ 10,139,461	$ 8,536,982	$ 16,734,167	$ 14,745,790
Product line cost of goods sold	5,346,207	4,926,314	8,959,956	8,409,917
Operating (loss) income	1,194,758	505,223	1,309,816	335,196
Depreciation and amortization			230,013	207,854
Capital expenditures			285,377	44,757
Continuing Operations [Member]
Summary information by segment [Abstract]
Net sales	10,139,461	8,536,982	16,734,167	14,745,790
Product line cost of goods sold	4,942,042	4,497,314	8,046,845	7,731,462
Product line gross profit	5,197,419	4,039,668	8,687,322	7,014,328
Operating (loss) income	1,194,758	505,223	1,309,816	335,196
Depreciation and amortization	121,797	103,297	230,013	207,855
Capital expenditures	121,278	25,106	285,377	44,757
Continuing Operations [Member] | Finished Jewelry [Member]
Summary information by segment [Abstract]
Net sales	5,197,256	4,727,069	7,751,893	6,837,405
Product line cost of goods sold	2,471,628	2,620,332	3,527,667	3,609,893
Product line gross profit	2,725,628	2,106,737	4,224,226	3,227,512
Continuing Operations [Member] | Loose Jewels [Member]
Summary information by segment [Abstract]
Net sales	4,942,205	3,809,913	8,982,274	7,908,385
Product line cost of goods sold	2,470,414	1,876,982	4,519,178	4,121,569
Product line gross profit	2,471,791	1,932,931	4,463,096	3,786,816
Operating and Reportable Segments [Member] | Continuing Operations [Member] | Online Channels [Member]
Summary information by segment [Abstract]
Net sales	5,456,165	4,609,529	8,539,265	6,684,260
Product line cost of goods sold	2,346,950	2,328,200	3,668,625	3,306,339
Product line gross profit	3,109,215	2,281,329	4,870,640	3,377,921
Operating (loss) income	806,591	866,784	890,338	586,155
Depreciation and amortization	43,063	28,895	71,139	59,172
Capital expenditures	61,600	1,547	62,850	1,548
Operating and Reportable Segments [Member] | Continuing Operations [Member] | Online Channels [Member] | Finished Jewelry [Member]
Summary information by segment [Abstract]
Net sales	4,357,713	3,723,936	6,473,653	5,107,288
Product line cost of goods sold	1,913,201	1,903,087	2,746,591	2,513,849
Product line gross profit	2,444,512	1,820,849	3,727,062	2,593,439
Operating and Reportable Segments [Member] | Continuing Operations [Member] | Online Channels [Member] | Loose Jewels [Member]
Summary information by segment [Abstract]
Net sales	1,098,452	885,593	2,065,612	1,576,972
Product line cost of goods sold	433,749	425,113	922,034	792,490
Product line gross profit	664,703	460,480	1,143,578	784,482
Operating and Reportable Segments [Member] | Continuing Operations [Member] | Traditional [Member]
Summary information by segment [Abstract]
Net sales	4,683,296	3,927,453	8,194,902	8,061,530
Product line cost of goods sold	2,595,092	2,169,114	4,378,220	4,425,123
Product line gross profit	2,088,204	1,758,339	3,816,682	3,636,407
Operating (loss) income	388,167	(361,561)	419,478	(250,959)
Depreciation and amortization	78,734	74,402	158,874	148,683
Capital expenditures	59,678	23,559	222,527	43,209
Operating and Reportable Segments [Member] | Continuing Operations [Member] | Traditional [Member] | Finished Jewelry [Member]
Summary information by segment [Abstract]
Net sales	839,543	1,003,133	1,278,240	1,730,117
Product line cost of goods sold	558,427	717,245	781,076	1,096,044
Product line gross profit	281,116	285,888	497,164	634,073
Operating and Reportable Segments [Member] | Continuing Operations [Member] | Traditional [Member] | Loose Jewels [Member]
Summary information by segment [Abstract]
Net sales	3,843,753	2,924,320	6,916,662	6,331,413
Product line cost of goods sold	2,036,665	1,451,869	3,597,144	3,329,079
Product line gross profit	1,807,088	1,472,451	3,319,518	3,002,334
Segment Reconciling Items [Member] | Continuing Operations [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	5,346,207	4,926,314	8,959,956	8,409,917
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	4,942,042	4,497,314	8,046,845	7,731,462
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	307,164	330,634	653,768	629,493
Segment Reconciling Items [Member] | Continuing Operations [Member] | Freight Out [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	203,669	143,987	302,789	244,003
Segment Reconciling Items [Member] | Continuing Operations [Member] | Inventory Valuation Allowances [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	3,000	554,000	52,000	551,000
Segment Reconciling Items [Member] | Continuing Operations [Member] | Other Inventory Adjustments [Member]
Summary information by segment [Abstract]
Product line cost of goods sold	$ (109,668)	$ (599,621)	$ (95,446)	$ (746,041)

SEGMENT INFORMATION AND GEOGR_4

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Data by Geographic Area (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Net sales [Abstract]
Net sales	$ 10,139,461	$ 8,536,982	$ 16,734,167	$ 14,745,790
Continuing Operations [Member]
Net sales [Abstract]
Net sales	10,139,461	8,536,982	16,734,167	14,745,790
Reportable Geographical Components [Member] | Continuing Operations [Member] | United States [Member]
Net sales [Abstract]
Net sales	8,870,317	7,969,735	14,693,186	13,720,560
Reportable Geographical Components [Member] | Continuing Operations [Member] | International [Member]
Net sales [Abstract]
Net sales	$ 1,269,144	$ 567,247	$ 2,040,981	$ 1,025,230

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
FAIR VALUE MEASUREMENTS [Abstract]
Asset impairment	$ 0	$ 0

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Total inventories, net of reserves [Abstract]
Raw materials	$ 4,687,528	$ 5,083,436
Work-in-process	10,758,871	10,659,786
Finished goods	18,098,640	17,483,773
Finished goods on consignment	1,226,296	523,971
Total supplies inventory	41,412	45,572
Less: inventory reserves	(2,020,000)	(1,968,000)
Total inventory	32,792,747	31,828,538
Short-term portion	11,318,267	10,979,891
Long-term portion	21,474,480	20,848,647
Inventories issued to active production	1,920,000	2,450,000
Inventory of net jewelry	8,950,000	7,790,000
Inventory of net loose jewels	23,800,000	24,000,000
Inventory reserve for obsolescence	1,340,000	1,300,000
Lower of cost or market value	1,330,000	1,290,000
Carrying value of inventory reserve for obsolescence of finished jewelry	5,000	7,000
Inventory rework reserve for recut	482,000	534,000
Inventory reserve for recut	482,000	418,000
Inventory reserve for shrinkage of finished jewelry on repairs	0	116,000
Inventory reserve for shrinkage	199,000	136,000
Inventory reserve for shrinkage of loose jewels	48,000	48,000
Inventory reserve for shrinkage of finished jewelry	151,000	88,000
Shrinkage reserve for finished goods on consignment	23,000	18,000
Inventory reserve for shrinkage of loose jewels on consignment	9,000	11,000
Inventory reserve for shrinkage of finished jewelry on consignment	14,000	7,000
Finished Jewelry [Member]
Total inventories, net of reserves [Abstract]
Raw materials	678,090	595,649
Work-in-process	1,114,425	1,196,268
Finished goods	6,118,482	5,517,951
Finished goods on consignment	1,037,362	476,648
Total finished jewelry and loose jewels	8,948,359	7,786,516
Loose Jewels [Member]
Total inventories, net of reserves [Abstract]
Raw materials	4,009,438	4,487,787
Work-in-process	9,644,446	9,463,518
Finished goods	9,983,158	10,015,822
Finished goods on consignment	165,934	29,323
Total finished jewelry and loose jewels	$ 23,802,976	$ 23,996,450

RETURNS ASSET AND REFUND LIAB_2

RETURNS ASSET AND REFUND LIABILITIES (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
RETURNS ASSET AND REFUND LIABILITIES [Abstract]
Refund liabilities	$ 1,280,000	$ 648,000
Asset returns	$ 472,000	$ 250,000

ACCRUED EXPENSES AND OTHER LI_3

ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Accrued compensation and related benefits	$ 669,875	$ 359,077
Deferred rent	147,913	139,558
Accrued cooperative advertising	115,796	60,784
Accrued sales and use tax	142,338	17,149
Other	49,559	42,377
Total accrued expenses and other liabilities	$ 1,125,481	$ 618,945

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
INCOME TAXES [Abstract]
Income tax expense for estimated tax, penalties, and interest for other uncertain tax positions	$ 5,000	$ 5,000	$ 10,000	$ 9,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Purchase Commitment [Abstract]
Percentage committed to be purchased	100.00%
Period of exclusive supply agreement	2 years
Purchase commitment in initial new order	$ 52,950
Remaining purchase commitment	48,460
Actual purchases under purchase amendment	4,430	$ 4,970
Minimum [Member]
Purchase Commitment [Abstract]
Future minimum annual purchase commitments	9,000
Maximum [Member]
Purchase Commitment [Abstract]
Future minimum annual purchase commitments	$ 12,000

LINE OF CREDIT, White Oak Credi

LINE OF CREDIT, White Oak Credit Facility (Details) - White Oak Commercial Finance LLC [Member]	6 Months Ended
	Dec. 31, 2018USD ($)
Revolving Credit Facility [Member]
Line of Credit Facility Disclosure [Abstract]
Revolving line of credit	$ 5,000,000
Line of credit maturity date	Jul. 13, 2021
Interest rate in event of default in excess of standard rate	2.00%
Credit facility outstanding	$ 0
Revolving Credit Facility [Member] | Minimum [Member]
Line of Credit Facility Disclosure [Abstract]
Excess availability covenant	$ 500,000
Debt instrument effective percentage	5.50%
Revolving Credit Facility [Member] | LIBOR [Member]
Line of Credit Facility Disclosure [Abstract]
Debt instrument, term of variable rate	1 month
Line of credit, spread on variable rate	3.75%
Line of credit, description of variable rate basis	one-month LIBOR
Revolving Credit Facility [Member] | Floor Rate [Member]
Line of Credit Facility Disclosure [Abstract]
Line of credit, spread on variable rate	1.25%
Non-Revolving Credit Facility [Member] | LIBOR [Member]
Line of Credit Facility Disclosure [Abstract]
Line of credit, spread on variable rate	4.75%

LINE OF CREDIT, Wells Fargo Cre

LINE OF CREDIT, Wells Fargo Credit Facility (Details) - Wells Fargo [Member] - Line of Credit [Member] - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2018	Dec. 31, 2018	Jun. 25, 2018
Credit Facility [Abstract]
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, 2018
Interest rate in event of default in excess of standard rate	3.00%
Credit facility outstanding			$ 0
LIBOR [Member]
Credit Facility [Abstract]
Line of credit, description of variable rate basis		Wells Fargo’s three-month LIBOR rate
Debt instrument, term of variable rate	3 months
Line of credit, spread on variable rate	2.00%
Prime Rate [Member]
Credit Facility [Abstract]
Line of credit, description of variable rate basis		Wells Fargo’s Prime Rate
Line of credit, spread on variable rate	1.00%

STOCK-BASED COMPENSATION, Stock

STOCK-BASED COMPENSATION, Stock-Based Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Stock-Based Compensation [Abstract]
Stock-based compensation	$ 171,906	$ 118,293	$ 243,082	$ 237,396
Employee Stock Options [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation	56,575	86,565	114,747	180,196
Stock-based compensation capitalized as a cost of inventory	0	0	0	0
Restricted Stock Awards [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation	$ 115,331	$ 31,728	$ 128,335	$ 57,200

STOCK-BASED COMPENSATION, Sto_2

STOCK-BASED COMPENSATION, Stock Options (Details) - Stock Options [Member] - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018
Stock Option Activity [Roll Forward]
Outstanding, beginning balance (in shares)			2,388,169
Granted (in shares)			275,025
Exercised (in shares)	0	0	(2,500)	0
Forfeited (in shares)			(12,500)
Expired (in shares)			(64,256)
Outstanding, ending balance (in shares)	2,583,938		2,583,938
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)			$ 1.46
Granted (in dollars per share)			1
Exercised (in dollars per share)			0.90
Forfeited (in dollars per share)			1.05
Expired (in dollars per share)			1.73
Outstanding, ending balance (in dollars per share)	$ 1.41		1.41
Fair value of stock options (in dollars per share)			$ 0.57
Fair value of stock options vested			$ 100,000
Weighted average assumptions for stock options [Abstract]
Dividend yield			0.00%
Expected volatility			61.20%
Risk-free interest rate			3.11%
Expected lives			5 years 6 months
Options Outstanding [Abstract]
Balance as of end of period (in shares)	2,583,938		2,388,169		2,583,938
Weighted average remaining contractual life			7 years 4 months 10 days
Weighted average exercise price (in dollars per share)	$ 1.41		$ 1.46		$ 1.41
Options Exercisable [Abstract]
Balance as of end of period (in shares)					1,996,413
Weighted average remaining contractual life			6 years 10 months 2 days
Weighted average exercise price (in dollars per share)					$ 1.51
Options Vested or Expected to Vest [Abstract]
Balance as of end of period (in shares)					2,483,469
Weighted average remaining contractual life			7 years 3 months 18 days
Weighted average exercise price (in dollars per share)					$ 1.42
Additional Disclosures [Abstract]
Unrecognized stock-based compensation expense related to unvested awards					$ 297,000
Total compensation cost not yet recognized, period for recognition			19 months
Aggregate intrinsic value of stock options outstanding					6,000
Aggregate intrinsic value of stock options exercisable					6,000
Aggregate intrinsic value of stock options vested or expected to vest					$ 6,000
Aggregate intrinsic value of stock options exercised			$ 300

STOCK-BASED COMPENSATION, Restr

STOCK-BASED COMPENSATION, Restricted Stock (Details)	6 Months Ended
	Dec. 31, 2018USD ($)$ / sharesshares
Dividends [Abstract]
Cash dividends | $	$ 0
Restricted Stock [Member]
Restricted Stock Activity [Roll Forward]
Unvested, beginning balance (in shares)	264,000
Vested (in shares)	(24,896)
Canceled (in shares)	(109,604)
Unvested, ending balance (in shares)	129,500
Weighted Average Grant Date Fair Value [Roll Forward]
Unvested, beginning balance (in dollars per share) | $ / shares	$ 1.25
Vested (in dollars per share) | $ / shares	1.31
Canceled (in dollars per share) | $ / shares	1.31
Unvested, ending balance (in dollars per share) | $ / shares	$ 1.18
Additional Disclosures [Abstract]
Granted (in shares)	0
Unrecognized stock-based compensation expense related to unvested awards | $	$ 32,000
Total compensation cost not yet recognized, period for recognition	1 month

NET INCOME PER COMMON SHARE (De

NET INCOME PER COMMON SHARE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Numerator [Abstract]
Net income	$ 1,189,565	$ 683,489	$ 1,299,469	$ 508,950
Weighted average common shares outstanding [Abstract]
Basic (in shares)	21,468,569	21,222,228	21,461,773	21,193,793
Effect of dilutive securities (in shares)	212,915	509,212	162,194	342,227
Diluted (in shares)	21,681,484	21,731,440	21,623,967	21,536,020
Net income per common share:
Basic (in dollars per share)	$ 0.06	$ 0.03	$ 0.06	$ 0.02
Diluted (in dollars per share)	$ 0.05	$ 0.03	$ 0.06	$ 0.02
Stock Options [Member]
Antidilutive Securities [Abstract]
Shares excluded from the computation of diluted net loss per common share (in shares)	2,440,000	2,030,000	2,450,000	2,190,000
Restricted Shares [Member]
Antidilutive Securities [Abstract]
Shares excluded from the computation of diluted net loss per common share (in shares)	0	0	0	0

MAJOR CUSTOMERS AND CONCENTRA_3

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Concentration of Credit Risk [Abstract]
Insurance coverage per depositor at each financial institution	$ 250,000		$ 250,000
Interest-bearing amounts on deposit in excess of FDIC insurable limits	$ 2,470,000		$ 2,470,000
Minimum [Member]
Concentration of Credit Risk [Abstract]
Period of customer payments on trade receivables			30 days
Maximum [Member]
Concentration of Credit Risk [Abstract]
Period of customer payments on trade receivables			120 days
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member]
Concentration of Credit Risk [Abstract]
Concentration risk, percentage			23.00%		10.00%
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member]
Concentration of Credit Risk [Abstract]
Concentration risk, percentage			13.00%		23.00%
Total Gross Sales [Member] | Customer Concentration Risk [Member] | Customer A [Member]
Concentration of Credit Risk [Abstract]
Concentration risk, percentage	13.00%	10.00%	11.00%	11.00%
Total Gross Sales [Member] | Customer Concentration Risk [Member] | Customer B [Member]
Concentration of Credit Risk [Abstract]
Concentration risk, percentage	15.00%	13.00%	14.00%	17.00%