Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2020 | Jan. 29, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | CHARLES & COLVARD LTD | |
Entity Central Index Key | 0001015155 | |
Current Fiscal Year End Date | --06-30 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Address, State or Province | NC | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,202,785 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 16,690,105 | $ 13,993,032 |
Restricted cash | 182,958 | 624,202 |
Accounts receivable, net | 3,059,842 | 670,718 |
Inventory, net | 12,072,929 | 7,443,257 |
Prepaid expenses and other assets | 1,342,956 | 1,177,860 |
Total current assets | 33,348,790 | 23,909,069 |
Long-term assets: | ||
Inventory, net | 16,593,187 | 23,190,702 |
Property and equipment, net | 975,989 | 999,061 |
Intangible assets, net | 193,388 | 170,151 |
Operating lease right-of-use assets | 366,083 | 584,143 |
Other assets | 42,330 | 51,461 |
Total long-term assets | 18,170,977 | 24,995,518 |
TOTAL ASSETS | 51,519,767 | 48,904,587 |
Current liabilities: | ||
Accounts payable | 2,932,576 | 3,748,235 |
Operating lease liabilities | 527,761 | 622,493 |
Current maturity of long-term debt | 579,000 | 193,000 |
Accrued expenses and other liabilities | 1,946,283 | 1,922,332 |
Total current liabilities | 5,985,620 | 6,486,060 |
Long-term liabilities: | ||
Long-term debt, net | 386,000 | 772,000 |
Noncurrent operating lease liabilities | 0 | 203,003 |
Accrued income taxes | 8,935 | 7,947 |
Total long-term liabilities | 394,935 | 982,950 |
Total liabilities | 6,380,555 | 7,469,010 |
Commitments and contingencies (Note 9) | ||
Shareholders' equity: | ||
Common stock, no par value; 50,000,000 shares authorized; 29,092,326 and 28,949,410 shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively | 54,520,189 | 54,342,864 |
Additional paid-in capital | 26,013,132 | 25,880,165 |
Accumulated deficit | (35,394,109) | (38,787,452) |
Total shareholders' equity | 45,139,212 | 41,435,577 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 51,519,767 | $ 48,904,587 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Jun. 30, 2020 |
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) | 29,092,326 | 28,949,410 |
Common stock, shares outstanding (in shares) | 29,092,326 | 28,949,410 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
Net sales | $ 12,146,790 | $ 10,659,090 | $ 20,073,083 | $ 18,267,511 |
Costs and expenses: | ||||
Cost of goods sold | 6,167,708 | 5,530,514 | 10,363,763 | 9,407,138 |
Sales and marketing | 2,480,571 | 3,160,965 | 4,128,503 | 5,390,556 |
General and administrative | 977,528 | 1,203,686 | 2,185,564 | 2,553,187 |
Total costs and expenses | 9,625,807 | 9,895,165 | 16,677,830 | 17,350,881 |
Income from operations | 2,520,983 | 763,925 | 3,395,253 | 916,630 |
Other income (expense): | ||||
Interest income | 1,126 | 45,379 | 4,586 | 106,758 |
Interest expense | (2,466) | (277) | (4,905) | (419) |
Loss on foreign currency exchange | (72) | (314) | (603) | (853) |
Total other (expense) income, net | (1,412) | 44,788 | (922) | 105,486 |
Income before income taxes | 2,519,571 | 808,713 | 3,394,331 | 1,022,116 |
Income tax (expense) benefit | (494) | 5,337 | (988) | (747) |
Net income | $ 2,519,077 | $ 814,050 | $ 3,393,343 | $ 1,021,369 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.09 | $ 0.03 | $ 0.12 | $ 0.04 |
Diluted (in dollars per share) | $ 0.09 | $ 0.03 | $ 0.12 | $ 0.03 |
Weighted average number of shares used in computing net income per common share: | ||||
Basic (in shares) | 28,804,265 | 28,656,910 | 28,795,424 | 28,610,299 |
Diluted (in shares) | 29,262,702 | 29,246,571 | 28,980,009 | 29,199,876 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Jun. 30, 2019 | $ 54,342,864 | $ 24,488,147 | $ (32,625,369) | $ 46,205,642 |
Balance (in shares) at Jun. 30, 2019 | 28,027,569 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock, net of offering costs | $ 0 | 932,480 | 0 | 932,480 |
Issuance of common stock, net of offering costs (in shares) | 630,500 | |||
Stock-based compensation | $ 0 | 212,380 | 0 | 212,380 |
Issuance of restricted stock | $ 0 | 0 | 0 | 0 |
Issuance of restricted stock (in shares) | 325,000 | |||
Retirement of restricted stock | $ 0 | 0 | 0 | 0 |
Retirement of restricted stock (in shares) | (1,159) | |||
Net income | $ 0 | 0 | 207,319 | 207,319 |
Balance at Sep. 30, 2019 | $ 54,342,864 | 25,633,007 | (32,418,050) | 47,557,821 |
Balance (in shares) at Sep. 30, 2019 | 28,981,910 | |||
Balance at Jun. 30, 2019 | $ 54,342,864 | 24,488,147 | (32,625,369) | 46,205,642 |
Balance (in shares) at Jun. 30, 2019 | 28,027,569 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 1,021,369 | |||
Balance at Dec. 31, 2019 | $ 54,342,864 | 25,779,732 | (31,604,000) | 48,518,596 |
Balance (in shares) at Dec. 31, 2019 | 28,981,910 | |||
Balance at Sep. 30, 2019 | $ 54,342,864 | 25,633,007 | (32,418,050) | 47,557,821 |
Balance (in shares) at Sep. 30, 2019 | 28,981,910 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | $ 0 | 146,725 | 0 | 146,725 |
Net income | 0 | 0 | 814,050 | 814,050 |
Balance at Dec. 31, 2019 | $ 54,342,864 | 25,779,732 | (31,604,000) | 48,518,596 |
Balance (in shares) at Dec. 31, 2019 | 28,981,910 | |||
Balance at Jun. 30, 2020 | $ 54,342,864 | 25,880,165 | (38,787,452) | 41,435,577 |
Balance (in shares) at Jun. 30, 2020 | 28,949,410 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | $ 0 | 107,355 | 0 | 107,355 |
Issuance of restricted stock | $ 0 | 0 | 0 | 0 |
Issuance of restricted stock (in shares) | 178,750 | |||
Retirement of restricted stock | $ 0 | 0 | 0 | 0 |
Retirement of restricted stock (in shares) | (162,500) | |||
Net income | $ 0 | 0 | 874,266 | 874,266 |
Balance at Sep. 30, 2020 | $ 54,342,864 | 25,987,520 | (37,913,186) | 42,417,198 |
Balance (in shares) at Sep. 30, 2020 | 28,965,660 | |||
Balance at Jun. 30, 2020 | $ 54,342,864 | 25,880,165 | (38,787,452) | 41,435,577 |
Balance (in shares) at Jun. 30, 2020 | 28,949,410 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 3,393,343 | |||
Balance at Dec. 31, 2020 | $ 54,520,189 | 26,013,132 | (35,394,109) | 45,139,212 |
Balance (in shares) at Dec. 31, 2020 | 29,092,326 | |||
Balance at Sep. 30, 2020 | $ 54,342,864 | 25,987,520 | (37,913,186) | 42,417,198 |
Balance (in shares) at Sep. 30, 2020 | 28,965,660 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | $ 0 | 87,938 | 0 | 87,938 |
Stock option exercises | $ 177,325 | (62,326) | 0 | 114,999 |
Stock option exercises (in shares) | 126,666 | |||
Net income | $ 0 | 0 | 2,519,077 | 2,519,077 |
Balance at Dec. 31, 2020 | $ 54,520,189 | $ 26,013,132 | $ (35,394,109) | $ 45,139,212 |
Balance (in shares) at Dec. 31, 2020 | 29,092,326 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 3,393,343 | $ 1,021,369 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 271,061 | 234,303 |
Stock-based compensation | 195,293 | 359,105 |
Provision for (Recovery of) uncollectible accounts | 5,514 | (10,000) |
Provision for sales returns | 662,000 | 299,000 |
Inventory write-off | 105,000 | 149,000 |
Provision for accounts receivable discounts | 9,581 | 39,706 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,066,219) | (1,454,318) |
Inventory | 1,862,843 | (2,207,214) |
Prepaid expenses and other assets, net | 62,095 | (196,764) |
Accounts payable | (815,659) | 1,403,677 |
Accrued income taxes | 988 | 747 |
Accrued expenses and other liabilities | (273,784) | 123,752 |
Net cash provided by (used in) operating activities | 2,412,056 | (237,637) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (244,688) | (319,728) |
Payments for intangible assets | (26,538) | (36,797) |
Net cash used in investing activities | (271,226) | (356,525) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of common stock, net of offering costs | 0 | 932,480 |
Stock option exercises | 114,999 | 0 |
Net cash provided by financing activities | 114,999 | 932,480 |
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 2,255,829 | 338,318 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | 14,617,234 | 13,006,545 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 16,873,063 | 13,344,863 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 0 | 277 |
Cash paid during the period for income taxes | $ 8,961 | $ 2,050 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Dec. 31, 2020 | |
DESCRIPTION OF BUSINESS [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Charles & Colvard, Ltd. (the “Company”), a North Carolina corporation, was founded in 1995. The Company manufactures, markets, and distributes Charles & Colvard Created Moissanite ® Forever One™ Caydia |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2020 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 contained in Item 8 of the Company’s Annual Report on Form 10-K (the “2020 Annual Report”) for the fiscal year ended June 30, 2020 filed with the SEC on September 4, 2020. The accompanying condensed consolidated financial statements as of and for the three and six months ended December 31, 2020 and 2019, and as of the fiscal year ended June 30, 2020, include the accounts of the Company and its wholly owned subsidiaries charlesandcolvard.com, LLC; Charles & Colvard Direct, LLC; and Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary, which was entered into dormancy as of September 30, 2020 following its re-activation in December 2017. Charles & Colvard Direct, LLC, had no operating activity during the six-month periods ended December 31, 2020 or 2019. Charles & Colvard (HK) Ltd. previously became dormant in the second quarter of 2009 and has had no operating activity since 2008. All intercompany accounts have been eliminated. Significant Accounting Policies – Reclassifications – Certain amounts in the Company’s condensed consolidated financial statements for the six months ended December 31, 2019 have been reclassified to conform to current presentation related to certain customer credit balances that were reclassified from accounts payable to accrued expenses and other liabilities in the amount of approximately $48,000. These reclassifications had no impact on the Company’s condensed consolidated financial position or condensed consolidated results of operations as of or for the periods ended December 31, 2020 and 2019. Use of Estimates Cash and Cash Equivalents Restricted Cash 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, “Debt.” 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, 2020 June 30, 2020 Cash and cash equivalents $ 16,690,105 $ 13,993,032 Restricted cash 182,958 624,202 Total cash, cash equivalents, and restricted cash $ 16,873,063 $ 14,617,234 Recently Adopted/Issued Accounting Pronouncements – to the measurement and disclosure of credit losses on financial instruments. The new guidance includes a current expected credit loss (“CECL”) model that requires an entity to estimate credit losses expected over the life of an exposure or pool of exposures based on historical information, current conditions, and supportable forecasts at the time the asset is recognized and is measured at each reporting period. The new guidance principally The adoption of the new accounting standard did not have a material impact on the Company’s financial position or results of operations and the Company did not record a cumulative-effect adjustment to retained earnings. The Company amended its allowance for credit losses policy, as set forth below, for the implementation of the new accounting standard. The Company records an allowance for credit losses, which includes a provision for expected losses based on historical write-offs, adjusted for current conditions as deemed necessary, and a specific reserve for accounts deemed at risk. The allowance is the Company’s estimate for accounts receivable as of the balance sheet date that ultimately will not be collected. Any changes in the allowance are reflected in the results of operations in the period in which the change occurs. The Company writes-off accounts receivable when it becomes probable, based upon customer facts and circumstances, that such amounts will not be collected. Effective July 1, 2020, the Company also adopted the new accounting standard in connection with accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The new standard provides guidance to determine the accounting for fees paid in connection with a cloud computing arrangement that may include a software license. The adoption of this new accounting standard did not have a material impact on the Company’s financial position or results of operations. In December 2019, the FASB issued guidance on simplifying the accounting for income taxes that is intended to reduce the complexity while maintaining or improving the usefulness of tax disclosure information in financial statements. The new guidance is effective for fiscal years beginning after December 15, 2020. The Company does not expect the impact of the new guidance to have a material impact to the Company’s financial statements. In March 2020, as amended in January 2021, in response to concerns about structural risks of interbank offered rates (“IBORs”), and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), the FASB issued new guidance to ease the burden in accounting for or recognizing the effects of referenced interest rate reform on financial reporting. The new guidance is effective as of March 12, 2020 through December 31, 2022. As described in more detail in Note 10, “Debt”, borrowings under the Company’s line of credit are based on a rate equal to the one-month LIBOR. As of December 31, 2020, the Company had not borrowed against its line of credit, and therefore, is not subject to recognizing or disclosing any effect of referenced rate reform as of its quarterly period ended December 31, 2020. |
SEGMENT INFORMATION AND GEOGRAP
SEGMENT INFORMATION AND GEOGRAPHIC DATA | 6 Months Ended |
Dec. 31, 2020 | |
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 retail, and other pure-play, exclusively e-commerce outlets; and its “Traditional” segment, which consists of wholesale and retail 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 2020 Annual 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. 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, leases, utilities, and corporate overhead allocations; freight out; inventory write-downs; and other inventory adjustments, comprising costs of quality issues, and damaged goods. The Company allocates certain general and administrative expenses between its Online Channels segment and its Traditional segment based on net sales and number of employees to arrive at segment operating income. Unallocated expenses remain in its Traditional segment. Summary financial information by reportable segment for the periods presented is as follows: Three Months Ended December 31, 2020 Online Channels Traditional Total Net sales Finished jewelry $ 6,588,338 $ 1,676,859 $ 8,265,197 Loose jewels 997,939 2,883,654 3,881,593 Total $ 7,586,277 $ 4,560,513 $ 12,146,790 Product line cost of goods sold Finished jewelry $ 2,863,733 $ 1,138,413 $ 4,002,146 Loose jewels 388,426 1,417,177 1,805,603 Total $ 3,252,159 $ 2,555,590 $ 5,807,749 Product line gross profit Finished jewelry $ 3,724,605 $ 538,446 $ 4,263,051 Loose jewels 609,513 1,466,477 2,075,990 Total $ 4,334,118 $ 2,004,923 $ 6,339,041 Operating income $ 1,494,448 $ 1,026,535 $ 2,520,983 Depreciation and amortization $ 59,221 $ 79,384 $ 138,605 Capital expenditures $ 90,852 $ 52,350 $ 143,202 Three Months Ended December 31, 2019 Online Channels Traditional Total Net sales Finished jewelry $ 5,144,320 $ 1,294,027 $ 6,438,347 Loose jewels 940,434 3,280,309 4,220,743 Total $ 6,084,754 $ 4,574,336 $ 10,659,090 Product line cost of goods sold Finished jewelry $ 2,239,750 $ 724,364 $ 2,964,114 Loose jewels 405,869 1,675,785 2,081,654 Total $ 2,645,619 $ 2,400,149 $ 5,045,768 Product line gross profit Finished jewelry $ 2,904,570 $ 569,663 $ 3,474,233 Loose jewels 534,565 1,604,524 2,139,089 Total $ 3,439,135 $ 2,174,187 $ 5,613,322 Operating income $ 349,762 $ 414,163 $ 763,925 Depreciation and amortization $ 32,773 $ 76,892 $ 109,665 Capital expenditures $ 137,200 $ 71,211 $ 208,411 Six Months Ended December 31, 2020 Online Channels Traditional Total Net sales Finished jewelry $ 10,211,799 $ 2,388,735 $ 12,600,534 Loose jewels 1,839,772 5,632,777 7,472,549 Total $ 12,051,571 $ 8,021,512 $ 20,073,083 Product line cost of goods sold Finished jewelry $ 4,197,115 $ 1,559,320 $ 5,756,435 Loose jewels 701,115 2,848,410 3,549,525 Total $ 4,898,230 $ 4,407,730 $ 9,305,960 Product line gross profit Finished jewelry $ 6,014,684 $ 829,415 $ 6,844,099 Loose jewels 1,138,657 2,784,367 3,923,024 Total $ 7,153,341 $ 3,613,782 $ 10,767,123 Operating income $ 2,269,113 $ 1,126,140 $ 3,395,253 Depreciation and amortization $ 113,573 $ 157,488 $ 271,061 Capital expenditures $ 150,129 $ 94,559 $ 244,688 Six Months Ended December 31, 2019 Online Channels Traditional Total Net sales Finished jewelry $ 8,121,667 $ 2,174,675 $ 10,296,342 Loose jewels 1,668,716 6,302,453 7,971,169 Total $ 9,790,383 $ 8,477,128 $ 18,267,511 Product line cost of goods sold Finished jewelry $ 3,452,623 $ 1,214,401 $ 4,667,024 Loose jewels 671,063 3,210,043 3,881,106 Total $ 4,123,686 $ 4,424,444 $ 8,548,130 Product line gross profit Finished jewelry $ 4,669,044 $ 960,274 $ 5,629,318 Loose jewels 997,653 3,092,410 4,090,063 Total $ 5,666,697 $ 4,052,684 $ 9,719,381 Operating income $ 395,427 $ 521,203 $ 916,630 Depreciation and amortization $ 82,023 $ 152,280 $ 234,303 Capital expenditures $ 210,925 $ 108,803 $ 319,728 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, 2020 2019 2020 2019 Product line cost of goods sold $ 5,807,749 $ 5,045,768 $ 9,305,960 $ 8,548,130 Non-capitalized manufacturing and production control expenses 395,237 427,643 724,641 817,519 Freight out 316,542 141,233 491,881 272,352 Inventory write-off 25,000 126,000 105,000 149,000 Other inventory adjustments (376,820 ) (210,130 ) (263,719 ) (379,863 ) Cost of goods sold $ 6,167,708 $ 5,530,514 $ 10,363,763 $ 9,407,138 The Company recognizes sales by geographic area based on the country in which the customer is based. Sales to international end consumers made through the Company’s transactional website, charlesandcolvard.com, are included in international sales for financial reporting purposes. 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. The following presents net sales by geographic area: Three Months Ended December 31, Six Months Ended December 31, 2020 2019 2020 2019 Net sales United States $ 11,388,680 $ 9,643,311 $ 18,888,399 $ 16,407,187 International 758,110 1,015,779 1,184,684 1,860,324 Total $ 12,146,790 $ 10,659,090 $ 20,073,083 $ 18,267,511 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Dec. 31, 2020 | |
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. For the six months ended December 31, 2020 and 2019, no impairment was recorded. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Dec. 31, 2020 | |
INVENTORIES [Abstract] | |
INVENTORIES | 5. INVENTORIES The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2020 June 30, 2020 Finished jewelry: Raw materials $ 1,095,023 $ 821,536 Work-in-process 925,022 602,390 Finished goods 7,019,742 6,019,985 Finished goods on consignment 1,964,458 2,297,907 Total finished jewelry $ 11,004,245 $ 9,741,818 Loose jewels: Raw materials $ 2,056,183 $ 3,526,399 Work-in-process 9,673,337 10,453,586 Finished goods 5,659,166 6,619,487 Finished goods on consignment 167,781 204,635 Total loose jewels 17,556,467 20,804,107 Total supplies inventory 105,404 88,034 Total inventory $ 28,666,116 $ 30,633,959 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: December 31, 2020 June 30, 2020 Short-term portion $ 12,072,929 $ 7,443,257 Long-term portion 16,593,187 23,190,702 Total $ 28,666,116 $ 30,633,959 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, 2020 and June 30, 2020, work-in-process inventories issued to active production jobs approximated $1.61 million and $1.34 million, respectively. The Company’s moissanite and lab grown diamond 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, and product obsolescence is closely monitored and reviewed by management as of and for each financial reporting period. The Company manufactures finished jewelry featuring moissanite and lab grown diamonds. Relative to loose moissanite jewels and lab grown diamonds, 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 and lab grown diamonds 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 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 inventories are stated at the lower of cost or net realizable value on an average cost basis. Each accounting period the Company evaluates the valuation and classification of inventories including the need for potential adjustments to inventory-related reserves, which also include significant estimates by management. |
RETURNS ASSET AND REFUND LIABIL
RETURNS ASSET AND REFUND LIABILITIES | 6 Months Ended |
Dec. 31, 2020 | |
RETURNS ASSET AND REFUND LIABILITIES [Abstract] | |
RETURNS ASSET AND REFUND LIABILITIES | 6. RETURNS ASSET AND REFUND LIABILITIES In connection with its he Company provides for 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, 2020 and June 30, 2020, the Company’s refund liabilities balances were $1.37 million and $704,000, respectively, and are included as allowances for sales returns within accounts receivable, net, in the accompanying condensed consolidated balance sheets. As of December 31, 2020 and June 30, 2020, the Company’s returns asset balances were $578,000 and $289,000, respectively, and are included within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 6 Months Ended |
Dec. 31, 2020 | |
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, 2020 June 30, 2020 Deferred revenue $ 619,677 $ 794,740 Accrued compensation and related benefits 508,008 395,006 Accrued sales tax 497,609 295,651 Accrued severance 128,269 338,355 Accrued cooperative advertising 192,719 89,517 Other 1 9,063 Total accrued expenses and other liabilities $ 1,946,283 $ 1,922,332 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The Company recognized an income tax net expense of approximately $500 and an income tax net benefit of approximately $5,000, respectively, related to estimated taxes, penalties, and interest associated with uncertain tax positions for the three months ended December 31, 2020 and 2019, and an income tax net expense of approximately $1,000 and $1,000, respectively, also related to estimated taxes, penalties, and interest associated with uncertain tax positions for the six months ended December 31, 2020 and 2019. 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. As of December 31, 2020 and June 30, 2020, management determined that sufficient negative evidence continued to exist to conclude it was uncertain that the Company would have sufficient future taxable income to utilize its deferred tax assets. Therefore, the Company continued to maintain a full valuation allowance against its deferred tax assets as of December 31, 2020 and June 30, 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES Lease Arrangements 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 its corporate headquarters, which occupies approximately 36,350 square feet of office, storage, and light manufacturing space and is classified as an operating lease for financial reporting purposes. The expiration date of the base term of the Lease Agreement in effect as of December 31, 2020 is October 31, 2021 and the terms of the Lease Agreement contain no early termination provisions. Provided there is no outstanding uncured event of default under this Lease Agreement, the Company has two options to extend the lease term for a period of five years under each option. The Company’s option to extend the term of the Lease Agreement must be exercised in writing on or before 270 days prior to expiration of the then-current term. If the options are exercised, the monthly minimum rent for each of the extended terms will be adjusted to the then prevailing fair market rate. 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 related incentives offered by the landlord totaled approximately $623,000, of which approximately $393,000 was unamortized as of July 1, 2019, the effective date upon which the Company adopted the current lease accounting standard. The Company has no other material operating leases and is not party to leases that would qualify for classification as a finance lease, variable lease or short-term lease. As of December 31, 2020, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 366,083 Current operating lease liabilities $ 527,761 Noncurrent operating lease liabilities - Total operating lease liabilities $ 527,761 The Company’s total operating lease cost was approximately $128,000 and $117,000 for the three months ended December 31, 2020 and 2019, respectively. The Company’s total operating lease cost was approximately $260,000 and $235,000 for the six months ended December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company’s estimated incremental borrowing rate used and assumed discount rate with respect to operating leases was 7.14% and the remaining operating lease term was 0.83 years. As of December 31, 2020, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2021 $ 322,234 2022 219,723 Total lease payments 541,957 Less: imputed interest (14,196 ) Present value of lease payments 527,761 Less: current lease obligations 527,761 Total long-term lease obligations $ - The Company makes cash payments for amounts included in the measurement of its lease liabilities. During the three months ended December 31, 2020 and 2019, cash paid for operating leases was approximately $170,000 and $164,000, respectively. During the six months ended December 31, 2020 and 2019, cash paid for operating leases was approximately $340,000 and $328,000, respectively. Except for the ROU assets recorded upon adoption of the current lease accounting standard as of July 1, 2019, the Company has no new ROU assets obtained in exchange for new operating lease liabilities. See Note 14, “Subsequent Event”, for details in connection with the Third Amendment (the “Lease Amendment”) to the Company’s Lease Agreement that was executed on January 29, 2021. The Lease Amendment includes, among other things, an extension of the base term of the lease to October 31, 2026; changes to the monthly minimum rent, including a specified rent abatement, during the extension period of the base term of the lease; an allowance by the landlord to reimburse the Company for certain direct costs incurred by the Company for improvements to the leased real property; and under certain conditions, an option to extend the term of the Lease Agreement beyond October 31, 2026 for one additional five-year period. 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 ii iii Effective June 30, 2020, the Supply Agreement was further amended to extend the expiration date to June 29, 2025, which may be extended again by mutual agreement of the parties. The Supply Agreement was also amended to, among other things, ( i ii iii The Company’s total purchase commitment under the Supply Agreement, as amended, until June 2025 is approximately $52.95 million, of which approximately $35.57 remains to be purchased as of December 31, 2020. Over the life of the Supply Agreement, as amended, the Company’s future minimum annual purchase commitments of SiC crystals range from approximately $4 million to $10 million each year. During the six months ended December 31, 2020, the Company purchased approximately $1.03 million of SiC crystals from Cree pursuant to the terms of the Supply Agreement, as amended. During the six months ended December 31, 2019, the Company purchased approximately $4.98 million of SiC crystals from Cree. COVID-19 Update The global outbreak of the coronavirus disease 2019, or COVID-19, was declared a pandemic by the World Health Organization and a national emergency by the U.S. Government in March 2020 and has since negatively affected the U.S. and global economies, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place” and quarantine restrictions, and created significant disruption of the financial markets. Certain countries and jurisdictions, including some geographic areas of the U.S., have begun to return to significantly more stringent social, business, and travel-related restrictions due to the dramatic increase in new and variant strains of COVID-19 cases. Even in the absence of legal restrictions, businesses and individuals may voluntarily continue to limit in-person interactions and practice social distancing, and such behaviors may continue beyond the formal end of the pandemic. The level and nature of the disruption caused by COVID-19 is unpredictable, may be cyclical and long-lasting and may vary from location to location. The Company’s management has taken measures to protect the health and safety of the Company’s employees, work with the Company’s customers and suppliers to minimize disruptions, reduce the Company’s expenses, and support its community in addressing the challenges posed by this ongoing COVID-19 pandemic. The pandemic continues to present unprecedented business challenges and the Company has experienced impacts on its business related to the COVID-19 pandemic, primarily in increased coronavirus-related costs, delays in supplier deliveries, impacts of travel restrictions, access to some customer locations, the effects to net revenue related to reduced demand and store closures, and the impacts of remote work and adjusted work schedules. The impact of the COVID-19 pandemic on the global and domestic economy is currently not fully known. The Company’s operations have, to date, been operating under applicable governmental orders that have restricted activities in an effort to prevent further outbreak of COVID-19. As such, the Company is conducting business with certain modifications, including having non-operational personnel working remotely where applicable; limiting site access to necessary employees and critical third parties; enhancing the cleaning and disinfection of equipment and common areas, including engaging third-party specialists to disinfect personal workspaces; and issuing a quarantine policy regarding employees with COVID-19 symptoms or potential exposure, among other things. The Company’s management continues to actively monitor the situation and may take further actions that alter the Company’s business operations including any that may be required by federal, state or local authorities or that management determines are in the best interests of the Company’s employees, customers, suppliers, vendors, communities and other stakeholders. Despite these challenges, the Company’s efforts, especially with regard to product fulfillment and supply chain management, helped to partially mitigate the disruptions caused by the COVID-19 pandemic on the Company’s operations in the second quarter of its fiscal year ending June 30, 2021, or Fiscal 2021. However, the ultimate impact of the COVID-19 pandemic on the Company’s operations and financial performance in Fiscal 2021, and future periods, including management’s ability to execute its business plan and strategic initiatives in the expected timeframe, remains uncertain and will depend on future developments, including the duration and spread of the coronavirus disease and related actions taken by the U.S. Government, state and local government officials, and international governments to prevent and manage disease spread, including the global roll-out of COVID-19 vaccines, all of which are uncertain and cannot be predicted. The long-term impacts of the COVID-19 pandemic on global consumer buying behaviors, which impacts demand for our products and services, are also difficult to predict. The Company also intends to take advantage of COVID-19 related tax credits for required paid leave provided by the Company. These eligible tax credits are determined by qualified emergency paid sick and expanded family and medical leave wages pursuant to the Families First Coronavirus Response Act (“FFCRA”). Under FFCRA, the Company has provided employees with paid federal sick and expanded family and medical leave benefits for which it may be reimbursed by the government through payroll tax credits. Qualifying wages for tax credit purposes under FFCRA are those paid to an employee who takes leave under FFCRA for a qualifying reason, up to the applicable per diem and aggregate payment caps. Applicable tax credits also extend to the employer’s share of amounts paid or incurred to maintain a group health plan. The Consolidated Appropriations Act, 2021 (the “Act”), which is the latest federal stimulus relief bill for the COVID-19 pandemic, was signed into law on December 27, 2020. Notably, this legislation provides that employers who received a PPP loan may also qualify for the Employee Retention Credit (the “ERC”), once certain shutdown-related gross receipts decline eligibility hurdles are met. Previously, pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act”) While the Company has had minimal and partial short-term shutdowns related to the COVID-19 pandemic such that it has not utilized this aid, if future shutdowns are mandated and more extensive, the Company may be eligible to claim the ERC. Finally, as permitted by the |
DEBT
DEBT | 6 Months Ended |
Dec. 31, 2020 | |
DEBT [Abstract] | |
DEBT | 10. DEBT Paycheck Protection Program Loan The Company received a loan pursuant to the Paycheck Protection Program under the CARES Act, as administered by the U.S. Small Business Administration (the “SBA”). The loan in the principal amount of $965,000 (the “PPP Loan”) was disbursed by Newtek Small Business Finance, LLC, (the “Lender”), a nationally licensed lender under the SBA, on June 18, 2020 pursuant to a promissory note issued by the Company (the “Promissory Note”) on June 15, 2020. The Promissory Note matures June 18, 2022 and may be extended with the consent of the Lender under the provisions of the CARES Act. The Promissory Note bears interest at a fixed rate of 1% per annum. Pursuant to the terms of the Promissory Note, monthly principal and interest payments in the amount of approximately $41,000 will commence on April 1, 2021. For financial reporting purposes, as of December 31, 2020, the classification of the current maturity of long-term debt assumes there will be no principal forgiveness, as allowed under certain conditions by the agreement, and principal repayment for the full outstanding principal amount of the PPP Loan is assumed to be spread in equal monthly installments over the period from April 1, 2021 through the maturity date of the Promissory Note As of the dates presented, the Company’s total long-term debt is classified as follows: December 31, 2020 June 30, 2020 Current maturity of long-term debt $ 579,000 $ 193,000 Long-term debt, net 386,000 772,000 Total long-term debt $ 965,000 $ 965,000 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. During the first year of the term of the White Oak Credit Facility, revolving advances accrued interest at a rate equal to one-month LIBOR (reset monthly, and subject to a 1.25% floor) plus 3.75%, and non-revolving advances accrued interest at such LIBOR rate plus 4.75%. Thereafter, the interest margins will reduce upon the Company’s achievement of a specified fixed charge coverage ratio. However, advances are in all cases subject to a minimum interest rate of 5.50%. Interest is calculated on an actual/360 basis and payable monthly in arrears. Principal outstanding during an event of default accrues interest at a rate 2% in excess of the rate otherwise applicable. As of December 31, 2020, the Company had not borrowed against the White Oak Credit Facility. |
SHAREHOLDERS' EQUITY AND STOCK-
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION | 6 Months Ended |
Dec. 31, 2020 | |
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION [Abstract] | |
SHAREHOLDERS' EQUITY | 11. SHAREHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Shelf Registration Statement The Company has an effective shelf registration statement on Form S-3 on file with the which allows it to periodically offer and sell, individually or in any combination, shares of common stock, shares of preferred stock, warrants to purchase shares of common stock or preferred stock, and units consisting of any combination of the foregoing types of securities, up to a total of $25.00 million, of which . The Company’s ability to issue equity securities under its effective shelf registration statement is subject to market conditions Dividends The Company has paid no cash dividends during the current fiscal year through December 31, 2020. |
STOCK-BASED COMPENSATION | 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, 2020 2019 2020 2019 Employee stock options $ 50,176 $ 48,189 $ 141,216 $ 112,064 Restricted stock awards 37,762 98,536 54,077 247,041 Totals $ 87,938 $ 146,725 $ 195,293 $ 359,105 No stock-based compensation was capitalized as a cost of inventory during the three and six months ended December 31, 2020 and 2019. Stock Options The following is a summary of the stock option activity for the six months ended December 31, 2020: Shares Weighted Average Exercise Price Outstanding, June 30, 2020 2,809,095 $ 1.19 Granted 358,033 $ 0.93 Exercised (126,666 ) $ 0.91 Expired (56,000 ) $ 1.90 Outstanding, December 31, 2020 2,984,462 $ 1.16 The total fair value of stock options that vested during the six months ended December 31, 2020 was approximately $613,000. The following table summarizes information about stock options outstanding at December 31, 2020: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 12/31/2020 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2020 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2020 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,984,462 6.03 $ 1.16 2,423,679 5.23 $ 1.22 2,900,315 5.94 $ 1.16 As of December 31, 2020, the unrecognized stock-based compensation expense related to unvested stock options was approximately $230,000, which is expected to be recognized over a weighted average period of approximately 18 months. The aggregate intrinsic value of stock options outstanding, exercisable, and vested or expected to vest at December 31, 2020 was approximately $805,000. This amount is before applicable income taxes and represents the closing market price of the Company’s common stock at December 31, 2020 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 six months ended December 31, 2019 Restricted Stock The following is a summary of the restricted stock activity for the six months ended December 31, 2020: Shares Weighted Average Grant Date Fair Value Unvested, June 30, 2020 162,500 $ 1.57 Granted 178,750 $ 0.72 Canceled (162,500 ) $ 1.57 Unvested, December 31, 2020 178,750 $ 0.72 The unvested restricted shares as of December 31, 2020 are all performance-based restricted shares that are scheduled to vest, subject to achievement of the underlying performance goals, in July 2021. As of December 31, 2020, the estimated unrecognized stock-based compensation expense related to unvested restricted shares subject to achievement of performance goals was approximately $74,000, all of which is expected to be recognized over a weighted average period of approximately seven months. |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 6 Months Ended |
Dec. 31, 2020 | |
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. Anti-dilutive stock awards consist of stock options that would have been anti-dilutive 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, 2020 2019 2020 2019 Numerator: Net income $ 2,519,077 $ 814,050 $ 3,393,343 $ 1,021,369 Denominator: Weighted average common shares outstanding: Basic 28,804,265 28,656,910 28,795,424 28,610,299 Effect of dilutive securities 458,437 589,661 184,585 589,577 Diluted 29,262,702 29,246,571 28,980,009 29,199,876 Net income per common share: Basic $ 0.09 $ 0.03 $ 0.12 $ 0.04 Diluted $ 0.09 $ 0.03 $ 0.12 $ 0.03 For the three and six months ended December 31, 2020 stock options to purchase approximately 2.53 million and 2.80 million shares, respectively, and for each of the three and six months ended December 31, 2019, stock options to purchase approximately 2.13 million shares were excluded from the computation of diluted net income per common share for each period presented herein. These shares are excluded from the computations of diluted net income per common share because the exercise price of the stock options for each of the periods presented 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. Approximately 179,000 and 325,000 shares of unvested restricted stock are excluded from the computation of diluted net income per common share as of December 31, 2020 and 2019, respectively, because the shares are performance-based and the underlying conditions have not been met as of the periods presented. |
MAJOR CUSTOMERS AND CONCENTRATI
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK | 6 Months Ended |
Dec. 31, 2020 | |
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, 2020 and June 30, 2020 approximated $5.71 million and $2.01 million, respectively. Interest-bearing amounts on deposit in excess of FDIC insurable limits at December 31, 2020 and June 30, 2020 approximated $10.64 million and $11.64 million, respectively. 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 90 days, though it may offer extended terms with specific customers and on significant orders from time to time. 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. For additional information regarding the Company’s measurement and disclosure of credit losses on financial assets, including trade accounts receivable, see Note 4, “Fair Value Measurements.” 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, 2020 June 30, 2020 Customer A 26 % 26 % Customer B 17 % * % Customer C ** % 14 % Customer D ** % 13 % * Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2020. ** Customer C and Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2020. A significant portion of sales is derived from certain customer relationships. The following is a summary of customers that represent 10% or more of total net sales for the periods presented: Three Months Ended December 31, Six Months Ended December 31, 2020 2019 2020 2019 Customer A 14 % 13 % 12 % 13 % Customer C * % 13 % 10 % 13 % * Customer C did not have net sales that represented 10% or more of total net sales for the three months ended December 31, 2020. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Dec. 31, 2020 | |
SUBSEQUENT EVENT [Abstract] | |
SUBSEQUENT EVENT | 14. SUBSEQUENT EVENT Effective January 29, 2021, the Company entered into a third amendment (the “Lease Amendment”) to the Company’s Lease Agreement. The Lease Amendment, among other things, ( i ii iii iv During the Extension Period, the Company’s range from approximately $71,000 to $79,000 each month . |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2020 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements as of and for the three and six months ended December 31, 2020 and 2019 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2020 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 contained in Item 8 of the Company’s Annual Report on Form 10-K (the “2020 Annual Report”) for the fiscal year ended June 30, 2020 filed with the SEC on September 4, 2020. |
Principles of Consolidation | The accompanying condensed consolidated financial statements as of and for the three and six months ended December 31, 2020 and 2019, and as of the fiscal year ended June 30, 2020, include the accounts of the Company and its wholly owned subsidiaries charlesandcolvard.com, LLC; Charles & Colvard Direct, LLC; and Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary, which was entered into dormancy as of September 30, 2020 following its re-activation in December 2017. Charles & Colvard Direct, LLC, had no operating activity during the six-month periods ended December 31, 2020 or 2019. Charles & Colvard (HK) Ltd. previously became dormant in the second quarter of 2009 and has had no operating activity since 2008. All intercompany accounts have been eliminated. |
Reclassifications | Reclassifications – Certain amounts in the Company’s condensed consolidated financial statements for the six months ended December 31, 2019 have been reclassified to conform to current presentation related to certain customer credit balances that were reclassified from accounts payable to accrued expenses and other liabilities in the amount of approximately $48,000. These reclassifications had no impact on the Company’s condensed consolidated financial position or condensed consolidated results of operations as of or for the periods ended December 31, 2020 and 2019. |
Use of Estimates | Use of Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Restricted Cash | Restricted Cash 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, “Debt.” 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, 2020 June 30, 2020 Cash and cash equivalents $ 16,690,105 $ 13,993,032 Restricted cash 182,958 624,202 Total cash, cash equivalents, and restricted cash $ 16,873,063 $ 14,617,234 |
Credit Losses on Financial Instruments | Effective July 1, 2020, the Company adopted the new accounting standard related aligns the Company’s accounting for its trade accounts receivable with the economics of extending credit and improves its financial reporting by requiring timelier recording of related credit losses. The adoption of the new accounting standard did not have a material impact on the Company’s financial position or results of operations and the Company did not record a cumulative-effect adjustment to retained earnings. The Company amended its allowance for credit losses policy, as set forth below, for the implementation of the new accounting standard. The Company records an allowance for credit losses, which includes a provision for expected losses based on historical write-offs, adjusted for current conditions as deemed necessary, and a specific reserve for accounts deemed at risk. The allowance is the Company’s estimate for accounts receivable as of the balance sheet date that ultimately will not be collected. Any changes in the allowance are reflected in the results of operations in the period in which the change occurs. The Company writes-off accounts receivable when it becomes probable, based upon customer facts and circumstances, that such amounts will not be collected. |
Cloud Computing Arrangement Implementation Costs | Effective July 1, 2020, the Company also adopted the new accounting standard in connection with accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The new standard provides guidance to determine the accounting for fees paid in connection with a cloud computing arrangement that may include a software license. The adoption of this new accounting standard did not have a material impact on the Company’s financial position or results of operations. |
Recently Issued Accounting Pronouncements | In December 2019, the FASB issued guidance on simplifying the accounting for income taxes that is intended to reduce the complexity while maintaining or improving the usefulness of tax disclosure information in financial statements. The new guidance is effective for fiscal years beginning after December 15, 2020. The Company does not expect the impact of the new guidance to have a material impact to the Company’s financial statements. In March 2020, as amended in January 2021, in response to concerns about structural risks of interbank offered rates (“IBORs”), and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), the FASB issued new guidance to ease the burden in accounting for or recognizing the effects of referenced interest rate reform on financial reporting. The new guidance is effective as of March 12, 2020 through December 31, 2022. As described in more detail in Note 10, “Debt”, borrowings under the Company’s line of credit are based on a rate equal to the one-month LIBOR. As of December 31, 2020, the Company had not borrowed against its line of credit, and therefore, is not subject to recognizing or disclosing any effect of referenced rate reform as of its quarterly period ended December 31, 2020. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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, 2020 June 30, 2020 Cash and cash equivalents $ 16,690,105 $ 13,993,032 Restricted cash 182,958 624,202 Total cash, cash equivalents, and restricted cash $ 16,873,063 $ 14,617,234 |
SEGMENT INFORMATION AND GEOGR_2
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract] | |
Summary Financial Information by Reportable Segment | Summary financial information by reportable segment for the periods presented is as follows: Three Months Ended December 31, 2020 Online Channels Traditional Total Net sales Finished jewelry $ 6,588,338 $ 1,676,859 $ 8,265,197 Loose jewels 997,939 2,883,654 3,881,593 Total $ 7,586,277 $ 4,560,513 $ 12,146,790 Product line cost of goods sold Finished jewelry $ 2,863,733 $ 1,138,413 $ 4,002,146 Loose jewels 388,426 1,417,177 1,805,603 Total $ 3,252,159 $ 2,555,590 $ 5,807,749 Product line gross profit Finished jewelry $ 3,724,605 $ 538,446 $ 4,263,051 Loose jewels 609,513 1,466,477 2,075,990 Total $ 4,334,118 $ 2,004,923 $ 6,339,041 Operating income $ 1,494,448 $ 1,026,535 $ 2,520,983 Depreciation and amortization $ 59,221 $ 79,384 $ 138,605 Capital expenditures $ 90,852 $ 52,350 $ 143,202 Three Months Ended December 31, 2019 Online Channels Traditional Total Net sales Finished jewelry $ 5,144,320 $ 1,294,027 $ 6,438,347 Loose jewels 940,434 3,280,309 4,220,743 Total $ 6,084,754 $ 4,574,336 $ 10,659,090 Product line cost of goods sold Finished jewelry $ 2,239,750 $ 724,364 $ 2,964,114 Loose jewels 405,869 1,675,785 2,081,654 Total $ 2,645,619 $ 2,400,149 $ 5,045,768 Product line gross profit Finished jewelry $ 2,904,570 $ 569,663 $ 3,474,233 Loose jewels 534,565 1,604,524 2,139,089 Total $ 3,439,135 $ 2,174,187 $ 5,613,322 Operating income $ 349,762 $ 414,163 $ 763,925 Depreciation and amortization $ 32,773 $ 76,892 $ 109,665 Capital expenditures $ 137,200 $ 71,211 $ 208,411 Six Months Ended December 31, 2020 Online Channels Traditional Total Net sales Finished jewelry $ 10,211,799 $ 2,388,735 $ 12,600,534 Loose jewels 1,839,772 5,632,777 7,472,549 Total $ 12,051,571 $ 8,021,512 $ 20,073,083 Product line cost of goods sold Finished jewelry $ 4,197,115 $ 1,559,320 $ 5,756,435 Loose jewels 701,115 2,848,410 3,549,525 Total $ 4,898,230 $ 4,407,730 $ 9,305,960 Product line gross profit Finished jewelry $ 6,014,684 $ 829,415 $ 6,844,099 Loose jewels 1,138,657 2,784,367 3,923,024 Total $ 7,153,341 $ 3,613,782 $ 10,767,123 Operating income $ 2,269,113 $ 1,126,140 $ 3,395,253 Depreciation and amortization $ 113,573 $ 157,488 $ 271,061 Capital expenditures $ 150,129 $ 94,559 $ 244,688 Six Months Ended December 31, 2019 Online Channels Traditional Total Net sales Finished jewelry $ 8,121,667 $ 2,174,675 $ 10,296,342 Loose jewels 1,668,716 6,302,453 7,971,169 Total $ 9,790,383 $ 8,477,128 $ 18,267,511 Product line cost of goods sold Finished jewelry $ 3,452,623 $ 1,214,401 $ 4,667,024 Loose jewels 671,063 3,210,043 3,881,106 Total $ 4,123,686 $ 4,424,444 $ 8,548,130 Product line gross profit Finished jewelry $ 4,669,044 $ 960,274 $ 5,629,318 Loose jewels 997,653 3,092,410 4,090,063 Total $ 5,666,697 $ 4,052,684 $ 9,719,381 Operating income $ 395,427 $ 521,203 $ 916,630 Depreciation and amortization $ 82,023 $ 152,280 $ 234,303 Capital expenditures $ 210,925 $ 108,803 $ 319,728 |
Reconciliation of Cost of Goods Sold | 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, 2020 2019 2020 2019 Product line cost of goods sold $ 5,807,749 $ 5,045,768 $ 9,305,960 $ 8,548,130 Non-capitalized manufacturing and production control expenses 395,237 427,643 724,641 817,519 Freight out 316,542 141,233 491,881 272,352 Inventory write-off 25,000 126,000 105,000 149,000 Other inventory adjustments (376,820 ) (210,130 ) (263,719 ) (379,863 ) Cost of goods sold $ 6,167,708 $ 5,530,514 $ 10,363,763 $ 9,407,138 |
Net Sales by Geographic Area | The following presents net sales by geographic area: Three Months Ended December 31, Six Months Ended December 31, 2020 2019 2020 2019 Net sales United States $ 11,388,680 $ 9,643,311 $ 18,888,399 $ 16,407,187 International 758,110 1,015,779 1,184,684 1,860,324 Total $ 12,146,790 $ 10,659,090 $ 20,073,083 $ 18,267,511 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
INVENTORIES [Abstract] | |
Inventories | The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2020 June 30, 2020 Finished jewelry: Raw materials $ 1,095,023 $ 821,536 Work-in-process 925,022 602,390 Finished goods 7,019,742 6,019,985 Finished goods on consignment 1,964,458 2,297,907 Total finished jewelry $ 11,004,245 $ 9,741,818 Loose jewels: Raw materials $ 2,056,183 $ 3,526,399 Work-in-process 9,673,337 10,453,586 Finished goods 5,659,166 6,619,487 Finished goods on consignment 167,781 204,635 Total loose jewels 17,556,467 20,804,107 Total supplies inventory 105,404 88,034 Total inventory $ 28,666,116 $ 30,633,959 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: December 31, 2020 June 30, 2020 Short-term portion $ 12,072,929 $ 7,443,257 Long-term portion 16,593,187 23,190,702 Total $ 28,666,116 $ 30,633,959 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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, 2020 June 30, 2020 Deferred revenue $ 619,677 $ 794,740 Accrued compensation and related benefits 508,008 395,006 Accrued sales tax 497,609 295,651 Accrued severance 128,269 338,355 Accrued cooperative advertising 192,719 89,517 Other 1 9,063 Total accrued expenses and other liabilities $ 1,946,283 $ 1,922,332 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Balance Sheet Classifications of Leases | As of December 31, 2020, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 366,083 Current operating lease liabilities $ 527,761 Noncurrent operating lease liabilities - Total operating lease liabilities $ 527,761 |
Remaining Future Payments Under Operating Leases | As of December 31, 2020, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2021 $ 322,234 2022 219,723 Total lease payments 541,957 Less: imputed interest (14,196 ) Present value of lease payments 527,761 Less: current lease obligations 527,761 Total long-term lease obligations $ - |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
DEBT [Abstract] | |
Long-Term Debt | As of the dates presented, the Company’s total long-term debt is classified as follows: December 31, 2020 June 30, 2020 Current maturity of long-term debt $ 579,000 $ 193,000 Long-term debt, net 386,000 772,000 Total long-term debt $ 965,000 $ 965,000 |
SHAREHOLDERS' EQUITY AND STOC_2
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
SHAREHOLDERS' EQUITY AND 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, 2020 2019 2020 2019 Employee stock options $ 50,176 $ 48,189 $ 141,216 $ 112,064 Restricted stock awards 37,762 98,536 54,077 247,041 Totals $ 87,938 $ 146,725 $ 195,293 $ 359,105 |
Stock Option Activity | The following is a summary of the stock option activity for the six months ended December 31, 2020: Shares Weighted Average Exercise Price Outstanding, June 30, 2020 2,809,095 $ 1.19 Granted 358,033 $ 0.93 Exercised (126,666 ) $ 0.91 Expired (56,000 ) $ 1.90 Outstanding, December 31, 2020 2,984,462 $ 1.16 |
Stock Options Outstanding | The following table summarizes information about stock options outstanding at December 31, 2020: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 12/31/2020 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2020 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2020 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,984,462 6.03 $ 1.16 2,423,679 5.23 $ 1.22 2,900,315 5.94 $ 1.16 |
Restricted Stock Activity | The following is a summary of the restricted stock activity for the six months ended December 31, 2020: Shares Weighted Average Grant Date Fair Value Unvested, June 30, 2020 162,500 $ 1.57 Granted 178,750 $ 0.72 Canceled (162,500 ) $ 1.57 Unvested, December 31, 2020 178,750 $ 0.72 |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
NET INCOME PER COMMON SHARE [Abstract] | |
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, 2020 2019 2020 2019 Numerator: Net income $ 2,519,077 $ 814,050 $ 3,393,343 $ 1,021,369 Denominator: Weighted average common shares outstanding: Basic 28,804,265 28,656,910 28,795,424 28,610,299 Effect of dilutive securities 458,437 589,661 184,585 589,577 Diluted 29,262,702 29,246,571 28,980,009 29,199,876 Net income per common share: Basic $ 0.09 $ 0.03 $ 0.12 $ 0.04 Diluted $ 0.09 $ 0.03 $ 0.12 $ 0.03 |
MAJOR CUSTOMERS AND CONCENTRA_2
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract] | |
Major Customers | 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, 2020 June 30, 2020 Customer A 26 % 26 % Customer B 17 % * % Customer C ** % 14 % Customer D ** % 13 % * Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2020. ** Customer C and Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2020. A significant portion of sales is derived from certain customer relationships. The following is a summary of customers that represent 10% or more of total net sales for the periods presented: Three Months Ended December 31, Six Months Ended December 31, 2020 2019 2020 2019 Customer A 14 % 13 % 12 % 13 % Customer C * % 13 % 10 % 13 % * Customer C did not have net sales that represented 10% or more of total net sales for the three months ended December 31, 2020. |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Reclassifications (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Reclassifications [Abstract] | |||
Accounts payable | $ 2,932,576 | $ 3,748,235 | |
Accrued expenses and other liabilities | $ 1,946,283 | $ 1,922,332 | |
Reclassification [Member] | |||
Reclassifications [Abstract] | |||
Accounts payable | $ (48,000) | ||
Accrued expenses and other liabilities | $ 48,000 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Cash, Cash Equivalents and Restricted Cash [Abstract] | ||||
Cash and cash equivalents | $ 16,690,105 | $ 13,993,032 | ||
Restricted cash | 182,958 | 624,202 | ||
Total cash, cash equivalents, and restricted cash | $ 16,873,063 | $ 14,617,234 | $ 13,344,863 | $ 13,006,545 |
SEGMENT INFORMATION AND GEOGR_3
SEGMENT INFORMATION AND GEOGRAPHIC DATA, Summary Financial Information by Reportable Segment (Details) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)Segment | Dec. 31, 2019USD ($) | |
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract] | ||||
Number of operating segments | Segment | 2 | |||
Number of reportable segments | Segment | 2 | |||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | $ 12,146,790 | $ 10,659,090 | $ 20,073,083 | $ 18,267,511 |
Product line cost of goods sold | 6,167,708 | 5,530,514 | 10,363,763 | 9,407,138 |
Operating income | 2,520,983 | 763,925 | 3,395,253 | 916,630 |
Depreciation and amortization | 138,605 | 109,665 | 271,061 | 234,303 |
Capital expenditures | 143,202 | 208,411 | 244,688 | 319,728 |
Product Line [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Product line cost of goods sold | 5,807,749 | 5,045,768 | 9,305,960 | 8,548,130 |
Product line gross profit | 6,339,041 | 5,613,322 | 10,767,123 | 9,719,381 |
Finished Jewelry [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 8,265,197 | 6,438,347 | 12,600,534 | 10,296,342 |
Product line cost of goods sold | 4,002,146 | 2,964,114 | 5,756,435 | 4,667,024 |
Product line gross profit | 4,263,051 | 3,474,233 | 6,844,099 | 5,629,318 |
Loose Jewels [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 3,881,593 | 4,220,743 | 7,472,549 | 7,971,169 |
Product line cost of goods sold | 1,805,603 | 2,081,654 | 3,549,525 | 3,881,106 |
Product line gross profit | 2,075,990 | 2,139,089 | 3,923,024 | 4,090,063 |
Operating and Reportable Segments [Member] | Online Channels [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 7,586,277 | 6,084,754 | 12,051,571 | 9,790,383 |
Product line cost of goods sold | 3,252,159 | 2,645,619 | 4,898,230 | 4,123,686 |
Product line gross profit | 4,334,118 | 3,439,135 | 7,153,341 | 5,666,697 |
Operating income | 1,494,448 | 349,762 | 2,269,113 | 395,427 |
Depreciation and amortization | 59,221 | 32,773 | 113,573 | 82,023 |
Capital expenditures | 90,852 | 137,200 | 150,129 | 210,925 |
Operating and Reportable Segments [Member] | Online Channels [Member] | Finished Jewelry [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 6,588,338 | 5,144,320 | 10,211,799 | 8,121,667 |
Product line cost of goods sold | 2,863,733 | 2,239,750 | 4,197,115 | 3,452,623 |
Product line gross profit | 3,724,605 | 2,904,570 | 6,014,684 | 4,669,044 |
Operating and Reportable Segments [Member] | Online Channels [Member] | Loose Jewels [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 997,939 | 940,434 | 1,839,772 | 1,668,716 |
Product line cost of goods sold | 388,426 | 405,869 | 701,115 | 671,063 |
Product line gross profit | 609,513 | 534,565 | 1,138,657 | 997,653 |
Operating and Reportable Segments [Member] | Traditional [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 4,560,513 | 4,574,336 | 8,021,512 | 8,477,128 |
Product line cost of goods sold | 2,555,590 | 2,400,149 | 4,407,730 | 4,424,444 |
Product line gross profit | 2,004,923 | 2,174,187 | 3,613,782 | 4,052,684 |
Operating income | 1,026,535 | 414,163 | 1,126,140 | 521,203 |
Depreciation and amortization | 79,384 | 76,892 | 157,488 | 152,280 |
Capital expenditures | 52,350 | 71,211 | 94,559 | 108,803 |
Operating and Reportable Segments [Member] | Traditional [Member] | Finished Jewelry [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 1,676,859 | 1,294,027 | 2,388,735 | 2,174,675 |
Product line cost of goods sold | 1,138,413 | 724,364 | 1,559,320 | 1,214,401 |
Product line gross profit | 538,446 | 569,663 | 829,415 | 960,274 |
Operating and Reportable Segments [Member] | Traditional [Member] | Loose Jewels [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 2,883,654 | 3,280,309 | 5,632,777 | 6,302,453 |
Product line cost of goods sold | 1,417,177 | 1,675,785 | 2,848,410 | 3,210,043 |
Product line gross profit | $ 1,466,477 | $ 1,604,524 | $ 2,784,367 | $ 3,092,410 |
SEGMENT INFORMATION AND GEOGR_4
SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Cost of Goods Sold (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Cost of Goods Sold [Abstract] | ||||
Cost of goods sold | $ 6,167,708 | $ 5,530,514 | $ 10,363,763 | $ 9,407,138 |
Inventory write-off | 105,000 | 149,000 | ||
Product Line [Member] | ||||
Reconciliation of Cost of Goods Sold [Abstract] | ||||
Cost of goods sold | 5,807,749 | 5,045,768 | 9,305,960 | 8,548,130 |
Segment Reconciling Item [Member] | ||||
Reconciliation of Cost of Goods Sold [Abstract] | ||||
Non-capitalized manufacturing and production control expenses | 395,237 | 427,643 | 724,641 | 817,519 |
Freight out | 316,542 | 141,233 | 491,881 | 272,352 |
Inventory write-off | 25,000 | 126,000 | 105,000 | 149,000 |
Other inventory adjustments | $ (376,820) | $ (210,130) | $ (263,719) | $ (379,863) |
SEGMENT INFORMATION AND GEOGR_5
SEGMENT INFORMATION AND GEOGRAPHIC DATA, Net Sales by Geographic Area (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Sales by Geographic Area [Abstract] | ||||
Net sales | $ 12,146,790 | $ 10,659,090 | $ 20,073,083 | $ 18,267,511 |
Reportable Geographical Component [Member] | United States [Member] | ||||
Net Sales by Geographic Area [Abstract] | ||||
Net sales | 11,388,680 | 9,643,311 | 18,888,399 | 16,407,187 |
Reportable Geographical Component [Member] | International [Member] | ||||
Net Sales by Geographic Area [Abstract] | ||||
Net sales | $ 758,110 | $ 1,015,779 | $ 1,184,684 | $ 1,860,324 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS [Abstract] | ||
Asset impairment | $ 0 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Inventories [Abstract] | ||
Total supplies inventory | $ 105,404 | $ 88,034 |
Total inventory | 28,666,116 | 30,633,959 |
Short-term portion | 12,072,929 | 7,443,257 |
Long-term portion | 16,593,187 | 23,190,702 |
Work-in-process inventories issued to active production jobs | 1,610,000 | 1,340,000 |
Finished Jewelry [Member] | ||
Inventories [Abstract] | ||
Raw materials | 1,095,023 | 821,536 |
Work-in-process | 925,022 | 602,390 |
Finished goods | 7,019,742 | 6,019,985 |
Finished goods on consignment | 1,964,458 | 2,297,907 |
Total | 11,004,245 | 9,741,818 |
Loose Jewels [Member] | ||
Inventories [Abstract] | ||
Raw materials | 2,056,183 | 3,526,399 |
Work-in-process | 9,673,337 | 10,453,586 |
Finished goods | 5,659,166 | 6,619,487 |
Finished goods on consignment | 167,781 | 204,635 |
Total | $ 17,556,467 | $ 20,804,107 |
RETURNS ASSET AND REFUND LIAB_2
RETURNS ASSET AND REFUND LIABILITIES (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
RETURNS ASSET AND REFUND LIABILITIES [Abstract] | ||
Refund liabilities | $ 1,370,000 | $ 704,000 |
Asset returns | $ 578,000 | $ 289,000 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ||
Deferred revenue | $ 619,677 | $ 794,740 |
Accrued compensation and related benefits | 508,008 | 395,006 |
Accrued sales tax | 497,609 | 295,651 |
Accrued severance | 128,269 | 338,355 |
Accrued cooperative advertising | 192,719 | 89,517 |
Other | 1 | 9,063 |
Total accrued expenses and other liabilities | $ 1,946,283 | $ 1,922,332 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES [Abstract] | ||||
Income tax expense (benefit) for estimated tax, penalties, and interest for other uncertain tax positions | $ 500 | $ (5,000) | $ 1,000 | $ 1,000 |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, Lease Arrangements (Details) | Jan. 29, 2021Option | Dec. 31, 2020USD ($)ft² | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)ft²Option | Dec. 31, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | May 23, 2014USD ($) |
Commitments and Contingencies [Abstract] | ||||||||
Area leased under operating lease | ft² | 36,350 | 36,350 | ||||||
Number of options to extend lease term | Option | 2 | |||||||
Period of extension on each option | 5 years | 5 years | ||||||
Minimum notice period for extension of lease term | 270 days | |||||||
Leasehold improvements and other lease related incentives offered by landlord | $ 623,000 | |||||||
Unamortized lease assets | $ 393,000 | |||||||
Balance Sheet Classifications of Leases [Abstract] | ||||||||
Noncurrent operating lease ROU assets | $ 366,083 | $ 366,083 | $ 584,143 | |||||
Operating Lease Liabilities [Abstract] | ||||||||
Current operating lease liabilities | 527,761 | 527,761 | 622,493 | |||||
Noncurrent operating lease liabilities | 0 | 0 | 203,003 | |||||
Total operating lease liabilities | 527,761 | 527,761 | ||||||
Operating lease cost | $ 128,000 | $ 117,000 | $ 260,000 | $ 235,000 | ||||
Assumed discount rate | 7.14% | 7.14% | ||||||
Remaining operating lease term | 9 months 29 days | 9 months 29 days | ||||||
Future Lease Payments Under Operating Leases [Abstract] | ||||||||
2021 | $ 322,234 | $ 322,234 | ||||||
2022 | 219,723 | 219,723 | ||||||
Total lease payments | 541,957 | 541,957 | ||||||
Less: imputed interest | (14,196) | (14,196) | ||||||
Total operating lease liabilities | 527,761 | 527,761 | ||||||
Less: current lease obligations | 527,761 | 527,761 | 622,493 | |||||
Total long-term lease obligations | 0 | 0 | $ 203,003 | |||||
Cash paid for operating leases | $ 170,000 | $ 164,000 | 340,000 | $ 328,000 | ||||
ROU assets obtained in exchange for new operating lease liabilities | $ 0 | |||||||
Subsequent Event [Member] | ||||||||
Commitments and Contingencies [Abstract] | ||||||||
Number of options to extend lease term | Option | 1 | |||||||
Period of extension on each option | 5 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES, Purchase Commitments (Details) - SiC Materials [Member] - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Purchase Commitments [Abstract] | ||
Percentage of materials committed to be purchased | 100.00% | |
Extension period of exclusive supply agreement | 2 years | |
Total purchase commitment | $ 52,950 | |
Remaining purchase commitment | 35,570 | |
Purchases | 1,030 | $ 4,980 |
Minimum [Member] | ||
Purchase Commitments [Abstract] | ||
Future minimum annual purchase commitments | 4,000 | |
Maximum [Member] | ||
Purchase Commitments [Abstract] | ||
Future minimum annual purchase commitments | $ 10,000 |
DEBT, Paycheck Protection Progr
DEBT, Paycheck Protection Program Loan (Details) - USD ($) | 6 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 18, 2020 | |
Paycheck Protection Program Loan [Abstract] | |||
Current maturity of long-term debt | $ 579,000 | $ 193,000 | |
Long-term debt, net | $ 386,000 | 772,000 | |
PPP Loan [Member] | |||
Paycheck Protection Program Loan [Abstract] | |||
Principal amount | $ 965,000 | ||
Fixed interest rate | 1.00% | ||
Monthly principal and interest payment | $ 41,000 | ||
Current maturity of long-term debt | 579,000 | 193,000 | |
Long-term debt, net | 386,000 | 772,000 | |
Total long-term debt | $ 965,000 | $ 965,000 |
DEBT, Line of Credit (Details)
DEBT, Line of Credit (Details) | 6 Months Ended |
Dec. 31, 2020USD ($) | |
White Oak Credit Facility [Member] | |
Line of Credit [Abstract] | |
Borrowing capacity | $ 5,000,000 |
Maturity date | Jul. 13, 2021 |
Interest rate premium in excess of rate otherwise applicable charged during an event of default | 2.00% |
Credit facility outstanding | $ 0 |
White Oak Credit Facility [Member] | Minimum [Member] | |
Line of Credit [Abstract] | |
Excess availability | $ 500,000 |
Interest rate | 5.50% |
Revolving Advances [Member] | |
Line of Credit [Abstract] | |
Interest rate floor | 1.25% |
Revolving Advances [Member] | LIBOR [Member] | |
Line of Credit [Abstract] | |
Term of variable rate | 1 month |
Basis spread on variable rate | 3.75% |
Non-Revolving Advances [Member] | LIBOR [Member] | |
Line of Credit [Abstract] | |
Basis spread on variable rate | 4.75% |
SHAREHOLDERS' EQUITY AND STOC_3
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Shareholders' Equity (Details) | 6 Months Ended |
Dec. 31, 2020USD ($) | |
Shelf Registration Statement [Abstract] | |
Shelf Registration Statement | $ 25,000,000 |
Available amount under shelf registration statement | 13,990,000 |
Dividends [Abstract] | |
Cash dividends | $ 0 |
SHAREHOLDERS' EQUITY AND STOC_4
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-Based Compensation [Abstract] | ||||
Employee stock options | $ 50,176 | $ 48,189 | $ 141,216 | $ 112,064 |
Restricted stock awards | 37,762 | 98,536 | 54,077 | 247,041 |
Total | 87,938 | 146,725 | 195,293 | 359,105 |
Stock-based compensation capitalized as a cost of inventory | $ 0 | $ 0 | $ 0 | $ 0 |
SHAREHOLDERS' EQUITY AND STOC_5
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Option Activity (Details) - Stock Options [Member] - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Option Activity [Roll Forward] | ||
Outstanding, beginning balance (in shares) | 2,809,095 | |
Granted (in shares) | 358,033 | |
Exercised (in shares) | (126,666) | 0 |
Expired (in shares) | (56,000) | |
Outstanding, ending balance (in shares) | 2,984,462 | |
Weighted Average Exercise Price [Roll Forward] | ||
Outstanding, beginning balance (in dollars per share) | $ 1.19 | |
Granted (in dollars per share) | 0.93 | |
Exercised (in dollars per share) | 0.91 | |
Expired (in dollars per share) | 1.90 | |
Outstanding, ending balance (in dollars per share) | $ 1.16 | |
Fair Value of Stock Options [Abstract] | ||
Fair value of stock options vested | $ 613,000 |
SHAREHOLDERS' EQUITY AND STOC_6
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Options Outstanding (Details) - Stock Options [Member] - USD ($) | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Stock Options Outstanding and Exercisable [Abstract] | |||
Options outstanding, balance as of end of period (in shares) | 2,984,462 | 2,809,095 | |
Options outstanding, weighted average remaining contractual life | 6 years 11 days | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 1.16 | $ 1.19 | |
Options exercisable, balance as of end of period (in shares) | 2,423,679 | ||
Options exercisable, weighted average remaining contractual life | 5 years 2 months 23 days | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 1.22 | ||
Options Vested or Expected to Vest [Abstract] | |||
Options vested or expected to vest, balance as of end of period (in shares) | 2,900,315 | ||
Options vested or expected to vest, weighted average remaining contractual life | 5 years 11 months 8 days | ||
Options vested or expected to vest, weighted average exercise price (in dollars per share) | $ 1.16 | ||
Unrecognized Stock-Based Compensation Expense [Abstract] | |||
Unrecognized stock-based compensation expense | $ 230,000 | ||
Unrecognized stock-based compensation expense, period for recognition | 18 months | ||
Options outstanding, aggregate intrinsic value | $ 805,000 | ||
Options exercisable, aggregate intrinsic value | 805,000 | ||
Options vested or expected to vest, aggregate intrinsic value | 805,000 | ||
Options exercised, aggregate intrinsic value | $ 48,000 | ||
Options exercised (in shares) | 126,666 | 0 |
SHAREHOLDERS' EQUITY AND STOC_7
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Restricted Stock Activity (Details) - Restricted Stock [Member] | 6 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Restricted Stock Activity [Roll Forward] | |
Unvested, beginning balance (in shares) | shares | 162,500 |
Granted (in shares) | shares | 178,750 |
Canceled (in shares) | shares | (162,500) |
Unvested, ending balance (in shares) | shares | 178,750 |
Weighted Average Grant Date Fair Value [Roll Forward] | |
Unvested, beginning balance (in dollars per share) | $ / shares | $ 1.57 |
Granted (in dollars per share) | $ / shares | 0.72 |
Canceled (in dollars per share) | $ / shares | 1.57 |
Unvested, ending balance (in dollars per share) | $ / shares | $ 0.72 |
Unrecognized Stock-Based Compensation Expense [Abstract] | |
Unrecognized stock-based compensation expense | $ | $ 74,000 |
Unrecognized stock-based compensation expense, period for recognition | 7 months |
NET INCOME PER COMMON SHARE (De
NET INCOME PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator [Abstract] | ||||||
Net income | $ 2,519,077 | $ 874,266 | $ 814,050 | $ 207,319 | $ 3,393,343 | $ 1,021,369 |
Denominator [Abstract] | ||||||
Weighted average common shares outstanding, Basic (in shares) | 28,804,265 | 28,656,910 | 28,795,424 | 28,610,299 | ||
Effect of dilutive securities (in shares) | 458,437 | 589,661 | 184,585 | 589,577 | ||
Weighted average common shares outstanding, Diluted (in shares) | 29,262,702 | 29,246,571 | 28,980,009 | 29,199,876 | ||
Net income per common share [Abstract] | ||||||
Basic (in dollars per share) | $ 0.09 | $ 0.03 | $ 0.12 | $ 0.04 | ||
Diluted (in dollars per share) | $ 0.09 | $ 0.03 | $ 0.12 | $ 0.03 | ||
Stock Options [Member] | ||||||
Net Income per Common Share [Abstract] | ||||||
Shares excluded from the computation of diluted net income per common share (in shares) | 2,530,000 | 2,130,000 | 2,800,000 | 2,130,000 | ||
Restricted Stock [Member] | ||||||
Net Income per Common Share [Abstract] | ||||||
Shares excluded from the computation of diluted net income per common share (in shares) | 179,000 | 325,000 |
MAJOR CUSTOMERS AND CONCENTRA_3
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | ||||
Minimum [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Payment terms on trade receivables | 30 days | |||||||
Maximum [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Payment terms on trade receivables | 90 days | |||||||
Non-Interest-bearing Deposits [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Amounts on deposit in excess of FDIC insurable limits | $ 5,710 | $ 5,710 | $ 2,010 | |||||
Interest-bearing Deposits [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Amounts on deposit in excess of FDIC insurable limits | $ 10,640 | $ 10,640 | $ 11,640 | |||||
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | 26.00% | 26.00% | ||||||
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | 17.00% | [1] | ||||||
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | [2] | 14.00% | ||||||
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer D [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | [2] | 13.00% | ||||||
Total Net Sales [Member] | Customer Concentration Risk [Member] | Customer A [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | 14.00% | 13.00% | 12.00% | 13.00% | ||||
Total Net Sales [Member] | Customer Concentration Risk [Member] | Customer C [Member] | ||||||||
Major Customers and Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | [3] | 13.00% | 10.00% | 13.00% | ||||
[1] | Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2020. | |||||||
[2] | Customer C and Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2020. | |||||||
[3] | Customer C did not have net sales that represented 10% or more of total net sales for the three months ended December 31, 2020. |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | Jan. 29, 2021USD ($)Option | Dec. 31, 2020USD ($)Option |
Subsequent Event [Abstract] | ||
Number of options to extend lease term | Option | 2 | |
Period of extension on each option | 5 years | |
Future minimum rent payments | $ 541,957 | |
Subsequent Event [Member] | ||
Subsequent Event [Abstract] | ||
Number of options to extend lease term | Option | 1 | |
Period of extension on each option | 5 years | |
Subsequent Event [Member] | Minimum [Member] | ||
Subsequent Event [Abstract] | ||
Future minimum rent payments | $ 71,000 | |
Subsequent Event [Member] | Maximum [Member] | ||
Subsequent Event [Abstract] | ||
Future minimum rent payments | $ 79,000 |