Charles & Colvard (CTHR) 10-Q7 May 212021 Q3 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	Apr. 30, 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	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
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		29,852,950

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Current assets:
Cash and cash equivalents	$ 19,608,801	$ 13,993,032
Restricted cash	66,572	624,202
Accounts receivable, net	2,138,158	670,718
Inventory, net	12,639,062	7,443,257
Note receivable	250,000	0
Prepaid expenses and other assets	1,091,723	1,177,860
Total current assets	35,794,316	23,909,069
Long-term assets:
Inventory, net	16,307,138	23,190,702
Property and equipment, net	930,679	999,061
Intangible assets, net	191,508	170,151
Operating lease right-of-use assets	4,123,956	584,143
Other assets	49,657	51,461
Total long-term assets	21,602,938	24,995,518
TOTAL ASSETS	57,397,254	48,904,587
Current liabilities:
Accounts payable	2,920,570	3,748,235
Operating lease liabilities	516,576	622,493
Current maturity of long-term debt	643,000	193,000
Accrued expenses and other liabilities	2,052,958	1,922,332
Total current liabilities	6,133,104	6,486,060
Long-term liabilities:
Long-term debt, net	322,000	772,000
Noncurrent operating lease liabilities	3,782,296	203,003
Accrued income taxes	9,407	7,947
Total long-term liabilities	4,113,703	982,950
Total liabilities	10,246,807	7,469,010
Commitments and contingencies (Note 9)
Shareholders' equity:
Common stock, no par value; 50,000,000 shares authorized; 29,852,950 and 28,949,410 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively	55,932,808	54,342,864
Additional paid-in capital	25,575,521	25,880,165
Accumulated deficit	(34,357,882)	(38,787,452)
Total shareholders' equity	47,150,447	41,435,577
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 57,397,254	$ 48,904,587

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2021	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)	29,852,950	28,949,410
Common stock, shares outstanding (in shares)	29,852,950	28,949,410

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 9,436,056	$ 6,491,048	$ 29,509,140	$ 24,758,559
Costs and expenses:
Cost of goods sold	5,093,452	9,171,932	15,457,215	18,579,069
Sales and marketing	2,211,350	2,518,732	6,339,854	7,909,289
General and administrative	1,092,683	994,254	3,278,246	3,547,441
Total costs and expenses	8,397,485	12,684,918	25,075,315	30,035,799
Income (Loss) from operations	1,038,571	(6,193,870)	4,433,825	(5,277,240)
Other income (expense):
Interest income	540	39,425	5,126	146,182
Interest expense	(2,412)	(116)	(7,318)	(535)
Loss on foreign currency exchange	0	(206)	(603)	(1,058)
Total other (expense) income, net	(1,872)	39,103	(2,795)	144,589
Income (Loss) before income taxes	1,036,699	(6,154,767)	4,431,030	(5,132,651)
Income tax expense	(472)	(493)	(1,460)	(1,240)
Net income (loss)	$ 1,036,227	$ (6,155,260)	$ 4,429,570	$ (5,133,891)
Net income (loss) per common share:
Basic (in dollars per share)	$ 0.04	$ (0.21)	$ 0.15	$ (0.18)
Diluted (in dollars per share)	$ 0.03	$ (0.21)	$ 0.15	$ (0.18)
Weighted average number of shares used in computing net income (loss) per common share:
Basic (in shares)	29,320,434	28,656,910	28,967,946	28,625,723
Diluted (in shares)	30,525,438	28,656,910	29,667,729	28,625,723

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 (loss)	$ 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 (loss)				(5,133,891)
Balance at Mar. 31, 2020	$ 54,342,864	25,635,104	(37,759,260)	42,218,708
Balance (in shares) at Mar. 31, 2020	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 (loss)	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
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	$ 0	(144,628)	0	(144,628)
Net income (loss)	0	0	(6,155,260)	(6,155,260)
Balance at Mar. 31, 2020	$ 54,342,864	25,635,104	(37,759,260)	42,218,708
Balance (in shares) at Mar. 31, 2020	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 (loss)	$ 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 (loss)				4,429,570
Balance at Mar. 31, 2021	$ 55,932,808	25,575,521	(34,357,882)	47,150,447
Balance (in shares) at Mar. 31, 2021	29,852,950
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 (loss)	$ 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
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	$ 0	76,916	0	76,916
Stock option exercises	$ 1,412,619	(514,527)	0	898,092
Stock option exercises (in shares)	760,624
Net income (loss)	$ 0	0	1,036,227	1,036,227
Balance at Mar. 31, 2021	$ 55,932,808	$ 25,575,521	$ (34,357,882)	$ 47,150,447
Balance (in shares) at Mar. 31, 2021	29,852,950

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 4,429,570	$ (5,133,891)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	419,511	366,322
Stock-based compensation	272,209	214,477
Provision for uncollectible accounts	53,514	151,000
Provision for sales returns	67,000	108,000
Inventory write-off	128,000	5,620,991
Provision for accounts receivable discounts	29,123	6,416
Changes in operating assets and liabilities:
Accounts receivable	(1,617,077)	50,626
Inventory	1,559,759	(3,556,653)
Prepaid expenses and other assets, net	(3,451,872)	326,146
Accounts payable	(827,665)	678,501
Accrued income taxes	1,460	1,240
Accrued expenses and other liabilities	3,604,002	(404,713)
Net cash provided by (used in) operating activities	4,667,534	(1,571,538)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(346,112)	(394,825)
Payment to fund note receivable	(250,000)	0
Payments for intangible assets	(26,374)	(71,347)
Net cash used in investing activities	(622,486)	(466,172)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock option exercises	1,013,091	0
Issuance of common stock, net of offering costs	0	932,480
Net cash provided by financing activities	1,013,091	932,480
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	5,058,139	(1,105,230)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	14,617,234	13,006,545
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	19,675,373	11,901,315
Supplemental disclosure of cash flow information:
Additions to right-of-use assets obtained from new operating lease liabilities	3,908,249	0
Cash paid during the period for interest	0	535
Cash paid during the period for income taxes	$ 9,050	$ 2,050

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	9 Months Ended
DESCRIPTION OF BUSINESS	Mar. 31, 2021
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	9 Months Ended
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	Mar. 31, 2021
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 nine months ended March 31, 2021 and 2020 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 nine months ended March 31, 2021 and 2020, 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 (HK) Ltd. previously became dormant in the second quarter of 2009 and has had no operating activity since 2008. Charles & Colvard Direct, LLC, had no operating activity during the nine-month periods ended March 31, 2021 or 2020. All intercompany accounts have been eliminated. Significant Accounting Policies – Reclassifications 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: March 31, 2021 June 30, 2020 Cash and cash equivalents $ 19,608,801 $ 13,993,032 Restricted cash 66,572 624,202 Total cash, cash equivalents, and restricted cash $ 19,675,373 $ 14,617,234 Recently Adopted/Issued Accounting Pronouncements – 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 March 31, 2021, 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 March 31, 2021.

SEGMENT INFORMATION AND GEOGRAP

SEGMENT INFORMATION AND GEOGRAPHIC DATA	9 Months Ended
SEGMENT INFORMATION AND GEOGRAPHIC DATA	Mar. 31, 2021
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, moissaniteoutlet.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 is as follows: Three Months Ended March 31, 2021 Online Channels Traditional Total Net sales Finished jewelry $ 4,902,964 $ 1,316,928 $ 6,219,892 Loose jewels 680,804 2,535,360 3,216,164 Total $ 5,583,768 $ 3,852,288 $ 9,436,056 Product line cost of goods sold Finished jewelry $ 2,045,519 $ 1,006,417 $ 3,051,936 Loose jewels 246,302 1,222,036 1,468,338 Total $ 2,291,821 $ 2,228,453 $ 4,520,274 Product line gross profit Finished jewelry $ 2,857,445 $ 310,511 $ 3,167,956 Loose jewels 434,502 1,313,324 1,747,826 Total $ 3,291,947 $ 1,623,835 $ 4,915,782 Operating income $ 751,953 $ 286,618 $ 1,038,571 Depreciation and amortization $ 67,373 $ 81,077 $ 148,450 Capital expenditures $ 22,770 $ 55,858 $ 78,628 Three Months Ended March 31, 2020 Online Channels Traditional Total Net sales Finished jewelry $ 2,922,439 $ 557,729 $ 3,480,168 Loose jewels 915,818 2,095,062 3,010,880 Total $ 3,838,257 $ 2,652,791 $ 6,491,048 Product line cost of goods sold Finished jewelry $ 1,286,865 $ 302,636 $ 1,589,501 Loose jewels 395,999 1,116,050 1,512,049 Total $ 1,682,864 $ 1,418,686 $ 3,101,550 Product line gross profit Finished jewelry $ 1,635,574 $ 255,093 $ 1,890,667 Loose jewels 519,819 979,012 1,498,831 Total $ 2,155,393 $ 1,234,105 $ 3,389,498 Operating loss $ (332,837 ) $ (5,861,033 ) $ (6,193,870 ) Depreciation and amortization $ 49,333 $ 82,686 $ 132,019 Capital expenditures $ 34,250 $ 39,347 $ 73,597 Nine Months Ended March 31, 2021 Online Channels Traditional Total Net sales Finished jewelry $ 15,114,765 $ 3,705,663 $ 18,820,428 Loose jewels 2,520,576 8,168,136 10,688,712 Total $ 17,635,341 $ 11,873,799 $ 29,509,140 Product line cost of goods sold Finished jewelry $ 6,242,635 $ 2,565,737 $ 8,808,372 Loose jewels 947,417 4,070,446 5,017,863 Total $ 7,190,052 $ 6,636,183 $ 13,826,235 Product line gross profit Finished jewelry $ 8,872,130 $ 1,139,926 $ 10,012,056 Loose jewels 1,573,159 4,097,690 5,670,849 Total $ 10,445,289 $ 5,237,616 $ 15,682,905 Operating income $ 3,021,067 $ 1,412,758 $ 4,433,825 Depreciation and amortization $ 180,946 $ 238,565 $ 419,511 Capital expenditures $ 195,695 $ 150,417 $ 346,112 Nine Months Ended March 31, 2020 Online Channels Traditional Total Net sales Finished jewelry $ 11,044,107 $ 2,732,403 $ 13,776,510 Loose jewels 2,584,534 8,397,515 10,982,049 Total $ 13,628,641 $ 11,129,918 $ 24,758,559 Product line cost of goods sold Finished jewelry $ 4,739,488 $ 1,517,037 $ 6,256,525 Loose jewels 1,067,062 4,326,093 5,393,155 Total $ 5,806,550 $ 5,843,130 $ 11,649,680 Product line gross profit Finished jewelry $ 6,304,619 $ 1,215,366 $ 7,519,985 Loose jewels 1,517,472 4,071,422 5,588,894 Total $ 7,822,091 $ 5,286,788 $ 13,108,879 Operating income (loss) $ 62,591 $ (5,339,831 ) $ (5,277,240 ) Depreciation and amortization $ 131,356 $ 234,966 $ 366,322 Capital expenditures $ 245,175 $ 149,650 $ 394,825 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 March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Product line cost of goods sold $ 4,520,274 $ 3,101,550 $ 13,826,235 $ 11,649,680 Non-capitalized manufacturing and production control expenses 398,073 286,722 1,122,715 1,104,241 Freight out 191,700 153,081 683,580 425,433 Inventory write-off 23,000 5,471,992 128,000 5,620,991 Other inventory adjustments (39,595 ) 158,587 (303,315 ) (221,276 ) Cost of goods sold $ 5,093,452 $ 9,171,932 $ 15,457,215 $ 18,579,069 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 websites, charlesandcolvard.com and moissaniteoutlet.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 March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Net sales United States $ 8,969,267 $ 6,153,787 $ 27,857,667 $ 22,560,974 International 466,789 337,261 1,651,473 2,197,585 Total $ 9,436,056 $ 6,491,048 $ 29,509,140 $ 24,758,559

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
FAIR VALUE MEASUREMENTS	Mar. 31, 2021
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, notes receivable, trade accounts receivable, and trade accounts payable. All financial instruments, including but not limited to the note receivable, are reflected in the condensed consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these financial instruments. Assets that are measured at fair value on a non-recurring basis include property and equipment, leasehold improvements, and intangible assets comprising patents, license rights, and trademarks. These items are recognized at fair value when they are considered to be impaired. For the nine months ended March 31, 2021 and 2020, no impairment was recorded.

INVENTORIES

INVENTORIES	9 Months Ended
INVENTORIES	Mar. 31, 2021
INVENTORIES [Abstract]
INVENTORIES	5. INVENTORIES The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: March 31, 2021 June 30, 2020 Finished jewelry: Raw materials $ 1,298,234 $ 821,536 Work-in-process 1,038,718 602,390 Finished goods 7,514,587 6,019,985 Finished goods on consignment 2,104,358 2,297,907 Total finished jewelry $ 11,955,897 $ 9,741,818 Loose jewels: Raw materials $ 1,795,625 $ 3,526,399 Work-in-process 9,531,730 10,453,586 Finished goods 5,356,833 6,619,487 Finished goods on consignment 206,441 204,635 Total loose jewels 16,890,629 20,804,107 Total supplies inventory 99,674 88,034 Total inventory $ 28,946,200 $ 30,633,959 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: March 31, 2021 June 30, 2020 Short-term portion $ 12,639,062 $ 7,443,257 Long-term portion 16,307,138 23,190,702 Total $ 28,946,200 $ 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 March 31, 2021 and June 30, 2020, work-in-process inventories issued to active production jobs approximated $1.88 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 the Company uses 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. .

NOTE RECEIVABLE

NOTE RECEIVABLE	9 Months Ended
NOTE RECEIVABLE	Mar. 31, 2021
NOTE RECEIVABLE [Abstract]
NOTE RECEIVABLE	6. NOTE RECEIVABLE On March 5, 2021, the Company entered into a $250,000 convertible promissory note agreement (the “ Convertible Promissory Not e”) with an unrelated third-party strategic marketing partner. The Convertible Promissory Note is unsecured and matures on March 5, 2022 (the “Maturity Date”). Convertible is accrued at a simple rate of 0.14% per annum and will accrue until the Convertible Promissory Note is converted in accordance with the conversion privileges contained within the Convertible Promissory Note or is repaid. Convertible Promissory Note Subject to the borrower’s completion of a specified equity financing transaction (an “Equity Financing”) on or prior to the Maturity Date, the unpaid principal amount, including accrued and unpaid interest, automatically converts into equity units of the most senior class of equity securities issued to investors in the Equity Financing. Unless converted as provided in the Convertible Promissory Note, the principal amount, including accrued and unpaid interest, will, on the Maturity Date, at the Company’s option either ( i ii

ACCRUED EXPENSES AND OTHER LIAB

ACCRUED EXPENSES AND OTHER LIABILITIES	9 Months Ended
ACCRUED EXPENSES AND OTHER LIABILITIES	Mar. 31, 2021
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: March 31, 2021 June 30, 2020 Accrued compensation and related benefits $ 726,294 $ 395,006 Deferred revenue 680,389 794,740 Accrued sales tax 506,746 295,651 Accrued cooperative advertising 81,644 89,517 Accrued severance 57,884 338,355 Other 1 9,063 Total accrued expenses and other liabilities $ 2,052,958 $ 1,922,332

INCOME TAXES

INCOME TAXES	9 Months Ended
INCOME TAXES	Mar. 31, 2021
INCOME TAXES [Abstract]
INCOME TAXES	8. INCOME TAXES The Company recognized a net income tax expense of approximately $500 related to estimated taxes, penalties, and interest associated with uncertain tax positions for each of the three months ended March 31, 2021 and 2020, and a net income tax expense of approximately $1,000 also related to estimated taxes, penalties, and interest associated with uncertain tax positions for each of the nine months ended March 31, 2021 and 2020. 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 March 31, 2021 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 March 31, 2021 and June 30, 2020.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 31, 2021
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, April 15, 2014, and January 29, 2021 (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 March 31, 2021 is October 31, 2026 and the terms of the Lease Agreement contain no early termination provisions. Provided there is no outstanding uncured event of default under the Lease Agreement, the Company has an option to extend the lease term for a period of five years. 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. Upon execution of the third amendment to the Lease Agreement (the “Lease Amendment”) on January 29, 2021, the Lease Amendment included a rent abatement in the amount of approximately $214,000, which is reflected in the rent payments used in the calculation of the right-of-use (“ROU”) asset and lease liability once remeasured upon the execution of the Lease Amendment to extend the lease term. The Lease Amendment also included an allowance for leasehold improvements offered by the landlord in an amount not to exceed approximately $545,000. Once such costs have been incurred, the Company will be reimbursed for qualified costs by the landlord and the Company will reduce the remaining ROU asset and lease liability by the amount of the reimbursement. Such reductions of the ROU asset and lease liability will be recognized prospectively by the Company over the remaining term of the lease. 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 March 31, 2021, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 4,123,956 Current operating lease liabilities $ 516,576 Noncurrent operating lease liabilities 3,782,296 Total operating lease liabilities $ 4,298,872 The Company’s total operating lease cost was approximately $192,000 and $117,000 for the three months ended March 31, 2021 and 2020, respectively. The Company’s total operating lease cost was approximately $473,000 and $352,000 for the nine months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the Company’s estimated incremental borrowing rate used and assumed discount rate with respect to operating leases was 2.81% and the remaining operating lease term was 5.58 years. As of March 31, 2021, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2021 $ 161,852 2022 575,591 2023 869,742 2024 893,660 2025 918,236 2026 943,487 2027 317,327 Total lease payments 4,679,895 Less: imputed interest 381,023 Present value of lease payments 4,298,872 Less: current lease liability 516,576 Total long-term lease liability $ 3,782,296 The Company makes cash payments for amounts included in the measurement of its lease liabilities. During the three months ended March 31, 2021 and 2020, cash paid for operating leases was approximately $160,000 and $172,000, respectively. During the nine months ended March 31, 2021 and 2020, cash paid for operating leases was approximately $481,000 and $500,000, respectively. In addition to the ROU assets recorded upon adoption of the current lease accounting standard as of July 1, 2019, of which approximately $300,000 was unamortized as of January 29, 2021, the effective date of the Lease Amendment, the Company recorded additional ROU assets in the amount of approximately $3.9 million obtained in exchange for the additional operating lease liability during the three-month period ended March 31, 2021. 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 $34.35 remains to be purchased as of March 31, 2021. 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 nine months ended March 31, 2021, the Company purchased approximately $2.28 million of SiC crystals from Cree pursuant to the terms of the Supply Agreement, as amended. During the nine months ended March 31, 2020, the Company purchased approximately $7.47 million of SiC crystals from Cree. COVID-19 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. 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. Following the government mandated shut down during the early days of the pandemic, work in the Company’s production and distribution facilities has continued throughout the remainder of the pandemic, consistent with guidance from federal, state and local officials to minimize the spread of COVID-19. The Company has taken actions to equip employees with personal protective equipment, establish minimum staffing and social distancing policies, sanitize workspaces more frequently, adopt alternate work schedules, and institute other measures aimed to sustain production and related services while minimizing the transmission of COVID-19. In addition, the Company has maintained a flexible teleworking policy for employees who can meet customer commitments remotely, and a portion of the Company’s workforce is currently teleworking. 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 of the pandemic, any potential subsequent waves of COVID-19 infection, the effectiveness, distribution and acceptance of COVID-19 vaccines, and related government actions to prevent and manage disease spread, all of which are uncertain and cannot be predicted. The Company also intends to take advantage of available COVID-19 related payroll tax credits for certain wages and paid leave provided by the Company during the pandemic. A portion of 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. In addition, the Consolidated Appropriations Act, 2021, provides that employers who received a Paycheck Protection Program (“PPP”) loan may also qualify for the Employee Retention Credit (the “ERC”). Previously, pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act”) The Company believes that it qualifies for certain employer-related tax benefits pursuant to the ERC and expects to amend its applicable federal payroll tax returns for such benefit. Accordingly, the Company will recognize any payroll tax credits related to these federal and state legislative actions in the period such benefits are received.

DEBT

DEBT	9 Months Ended
DEBT	Mar. 31, 2021
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, as amended by the Paycheck Protection Program Flexibility Act, monthly principal and interest payments will commence on October 1, 2021. For financial reporting purposes, as of March 31, 2021, 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 October 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: March 31, 2021 June 30, 2020 Current maturity of long-term debt $ 643,000 $ 193,000 Long-term debt, net 322,000 772,000 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 March 31, 2021, the Company had not borrowed against the White Oak Credit Facility

SHAREHOLDERS' EQUITY AND STOCK-

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION	9 Months Ended
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION	Mar. 31, 2021
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 March 31, 2021.
STOCK-BASED COMPENSATION	Stock-Based Compensation The following table summarizes the components of the Company’s stock-based compensation included in net income (loss) for the periods presented: Three Months Ended March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Employee stock options $ 45,312 $ 43,874 $ 186,528 $ 155,938 Restricted stock awards 31,604 (188,502 ) 85,681 58,539 Totals $ 76,916 $ (144,628 ) $ 272,209 $ 214,477 No stock-based compensation was capitalized as a cost of inventory during the three and nine months ended March 31, 2021 and 2020. Stock Options The following is a summary of the stock option activity for the nine months ended March 31, 2021: Shares Weighted Average Exercise Price Outstanding, June 30, 2020 2,809,095 $ 1.19 Granted 438,533 $ 1.05 Exercised (887,290 ) $ 1.14 Forfeited (7,000 ) $ 1.23 Expired (57,907 ) $ 1.95 Outstanding, March 31, 2021 2,295,431 $ 1.24 The total fair value of stock options that vested during the nine months ended March 31, 2021 was approximately $617,000. The following table summarizes information about stock options outstanding at March 31, 2021: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 3/31/2021 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 3/31/2021 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 3/31/2021 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,295,431 6.66 $ 1.24 1,666,148 5.65 $ 1.34 2,210,551 6.56 $ 1.25 As of March 31, 2021, the unrecognized stock-based compensation expense related to unvested stock options was approximately $240,000, which is expected to be recognized over a weighted average period of approximately 20 months. The aggregate intrinsic value of stock options outstanding, exercisable, and vested or expected to vest at March 31, 2021 was approximately $3.9 million. This amount is before applicable income taxes and represents the closing market price of the Company’s common stock at March 31, 2021 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 nine months ended March 31, 2020 Restricted Stock The following is a summary of the restricted stock activity for the nine months ended March 31, 2021: 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, March 31, 2021 178,750 $ 0.72 The unvested restricted shares as of March 31, 2021 are all performance-based restricted shares that are scheduled to vest, subject to achievement of the underlying performance goals, in July 2021. As of March 31, 2021, the estimated unrecognized stock-based compensation expense related to unvested restricted shares subject to achievement of performance goals was approximately $43,000, all of which is expected to be recognized over a weighted average period of approximately four months . As of March 31, 2020, the estimated unrecognized stock-based compensation expense related to unvested restricted shares subject to achievement of performance goals was approximately $510,000. However, pursuant to the estimated success rates related to the performance-based criteria of the restricted shares, none of the compensation expense related to the unvested shares was expected to be recognized during the year ended June 30, 2020. Accordingly, the estimated quantity of awards for which it was probable that performance conditions would be achieved was reevaluated during the quarterly period ended March 31, 2020 to reflect the adjusted estimated compensation expense for the unvested restricted shares that were subject to achievement of the underlying performance goals. The reevaluation related to the restricted stock awards resulted in a year-to-date reduction of stock-based compensation expense that was recognized in the quarterly period ended March 31, 2020 .

NET INCOME (LOSS) PER COMMON SH

NET INCOME (LOSS) PER COMMON SHARE	9 Months Ended
NET INCOME (LOSS) PER COMMON SHARE	Mar. 31, 2021
NET INCOME (LOSS) PER COMMON SHARE [Abstract]
NET INCOME (LOSS) PER COMMON SHARE	12. NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) 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 (loss) per share presentations: Three Months Ended March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Numerator: Net income (loss) $ 1,036,227 $ (6,155,260 ) $ 4,429,570 $ (5,133,891 ) Denominator: Weighted average common shares outstanding: Basic 29,320,434 28,656,910 28,967,946 28,625,723 Effect of dilutive securities 1,205,004 - 699,783 - Diluted 30,525,438 28,656,910 29,667,729 28,625,723 Net income (loss) per common share: Basic $ 0.04 $ (0.21 ) $ 0.15 $ (0.18 ) Diluted $ 0.03 $ (0.21 ) $ 0.15 $ (0.18 ) For the three- and nine-month periods ended March 31, 2021 stock options to purchase approximately 1.09 million shares, and 1.60 million shares, respectively, because the effect of inclusion of such amounts would be anti-dilutive to net loss per common share.

MAJOR CUSTOMERS AND CONCENTRATI

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	9 Months Ended
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	Mar. 31, 2021
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, notes receivable, 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 March 31, 2021 and June 30, 2020 approximated $3.61 million and $2.01 million, respectively. Interest-bearing amounts on deposit in excess of FDIC insurable limits at March 31, 2021 and June 30, 2020 approximated $15.64 million and $11.64 million, respectively. The Company’s note receivable from one third party was outstanding as of March 31, 2021. 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: March 31, 2021 June 30, 2020 Customer A 31 % 26 % Customer B 20 % * % 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 March 31, 2021. A significant portion of sales is derived from certain customer relationships. The following is a summary of customers that represent greater than or equal to 10% of total net sales for the periods presented: Three Months Ended March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Customer A 15 % 11 % 13 % 13 % Customer C 13 % 15 % 11 % 14 % Customer E * % 11 % * % * % * Customer E did not have net sales that represented 10% or more of total net sales for the three months ended March 31, 2021 and for the nine months ended March 31, 2021 and 2020.

BASIS OF PRESENTATION AND SIG_2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Mar. 31, 2021
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 nine months ended March 31, 2021 and 2020 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 nine months ended March 31, 2021 and 2020, 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 (HK) Ltd. previously became dormant in the second quarter of 2009 and has had no operating activity since 2008. Charles & Colvard Direct, LLC, had no operating activity during the nine-month periods ended March 31, 2021 or 2020. All intercompany accounts have been eliminated.
Reclassifications	Reclassifications
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: March 31, 2021 June 30, 2020 Cash and cash equivalents $ 19,608,801 $ 13,993,032 Restricted cash 66,572 624,202 Total cash, cash equivalents, and restricted cash $ 19,675,373 $ 14,617,234
Credit Losses on Financial Instruments	Effective July 1, 2020, the Company adopted the new accounting standard related 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 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 March 31, 2021, 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 March 31, 2021.

BASIS OF PRESENTATION AND SIG_3

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Mar. 31, 2021
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: March 31, 2021 June 30, 2020 Cash and cash equivalents $ 19,608,801 $ 13,993,032 Restricted cash 66,572 624,202 Total cash, cash equivalents, and restricted cash $ 19,675,373 $ 14,617,234

SEGMENT INFORMATION AND GEOGR_2

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)	9 Months Ended
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)	Mar. 31, 2021
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Summary Financial Information by Reportable Segment	Summary financial information by reportable segment is as follows: Three Months Ended March 31, 2021 Online Channels Traditional Total Net sales Finished jewelry $ 4,902,964 $ 1,316,928 $ 6,219,892 Loose jewels 680,804 2,535,360 3,216,164 Total $ 5,583,768 $ 3,852,288 $ 9,436,056 Product line cost of goods sold Finished jewelry $ 2,045,519 $ 1,006,417 $ 3,051,936 Loose jewels 246,302 1,222,036 1,468,338 Total $ 2,291,821 $ 2,228,453 $ 4,520,274 Product line gross profit Finished jewelry $ 2,857,445 $ 310,511 $ 3,167,956 Loose jewels 434,502 1,313,324 1,747,826 Total $ 3,291,947 $ 1,623,835 $ 4,915,782 Operating income $ 751,953 $ 286,618 $ 1,038,571 Depreciation and amortization $ 67,373 $ 81,077 $ 148,450 Capital expenditures $ 22,770 $ 55,858 $ 78,628 Three Months Ended March 31, 2020 Online Channels Traditional Total Net sales Finished jewelry $ 2,922,439 $ 557,729 $ 3,480,168 Loose jewels 915,818 2,095,062 3,010,880 Total $ 3,838,257 $ 2,652,791 $ 6,491,048 Product line cost of goods sold Finished jewelry $ 1,286,865 $ 302,636 $ 1,589,501 Loose jewels 395,999 1,116,050 1,512,049 Total $ 1,682,864 $ 1,418,686 $ 3,101,550 Product line gross profit Finished jewelry $ 1,635,574 $ 255,093 $ 1,890,667 Loose jewels 519,819 979,012 1,498,831 Total $ 2,155,393 $ 1,234,105 $ 3,389,498 Operating loss $ (332,837 ) $ (5,861,033 ) $ (6,193,870 ) Depreciation and amortization $ 49,333 $ 82,686 $ 132,019 Capital expenditures $ 34,250 $ 39,347 $ 73,597 Nine Months Ended March 31, 2021 Online Channels Traditional Total Net sales Finished jewelry $ 15,114,765 $ 3,705,663 $ 18,820,428 Loose jewels 2,520,576 8,168,136 10,688,712 Total $ 17,635,341 $ 11,873,799 $ 29,509,140 Product line cost of goods sold Finished jewelry $ 6,242,635 $ 2,565,737 $ 8,808,372 Loose jewels 947,417 4,070,446 5,017,863 Total $ 7,190,052 $ 6,636,183 $ 13,826,235 Product line gross profit Finished jewelry $ 8,872,130 $ 1,139,926 $ 10,012,056 Loose jewels 1,573,159 4,097,690 5,670,849 Total $ 10,445,289 $ 5,237,616 $ 15,682,905 Operating income $ 3,021,067 $ 1,412,758 $ 4,433,825 Depreciation and amortization $ 180,946 $ 238,565 $ 419,511 Capital expenditures $ 195,695 $ 150,417 $ 346,112 Nine Months Ended March 31, 2020 Online Channels Traditional Total Net sales Finished jewelry $ 11,044,107 $ 2,732,403 $ 13,776,510 Loose jewels 2,584,534 8,397,515 10,982,049 Total $ 13,628,641 $ 11,129,918 $ 24,758,559 Product line cost of goods sold Finished jewelry $ 4,739,488 $ 1,517,037 $ 6,256,525 Loose jewels 1,067,062 4,326,093 5,393,155 Total $ 5,806,550 $ 5,843,130 $ 11,649,680 Product line gross profit Finished jewelry $ 6,304,619 $ 1,215,366 $ 7,519,985 Loose jewels 1,517,472 4,071,422 5,588,894 Total $ 7,822,091 $ 5,286,788 $ 13,108,879 Operating income (loss) $ 62,591 $ (5,339,831 ) $ (5,277,240 ) Depreciation and amortization $ 131,356 $ 234,966 $ 366,322 Capital expenditures $ 245,175 $ 149,650 $ 394,825
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 March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Product line cost of goods sold $ 4,520,274 $ 3,101,550 $ 13,826,235 $ 11,649,680 Non-capitalized manufacturing and production control expenses 398,073 286,722 1,122,715 1,104,241 Freight out 191,700 153,081 683,580 425,433 Inventory write-off 23,000 5,471,992 128,000 5,620,991 Other inventory adjustments (39,595 ) 158,587 (303,315 ) (221,276 ) Cost of goods sold $ 5,093,452 $ 9,171,932 $ 15,457,215 $ 18,579,069
Net Sales by Geographic Area	The following presents net sales by geographic area: Three Months Ended March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Net sales United States $ 8,969,267 $ 6,153,787 $ 27,857,667 $ 22,560,974 International 466,789 337,261 1,651,473 2,197,585 Total $ 9,436,056 $ 6,491,048 $ 29,509,140 $ 24,758,559

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
INVENTORIES (Tables)	Mar. 31, 2021
INVENTORIES [Abstract]
Inventories	The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: March 31, 2021 June 30, 2020 Finished jewelry: Raw materials $ 1,298,234 $ 821,536 Work-in-process 1,038,718 602,390 Finished goods 7,514,587 6,019,985 Finished goods on consignment 2,104,358 2,297,907 Total finished jewelry $ 11,955,897 $ 9,741,818 Loose jewels: Raw materials $ 1,795,625 $ 3,526,399 Work-in-process 9,531,730 10,453,586 Finished goods 5,356,833 6,619,487 Finished goods on consignment 206,441 204,635 Total loose jewels 16,890,629 20,804,107 Total supplies inventory 99,674 88,034 Total inventory $ 28,946,200 $ 30,633,959 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: March 31, 2021 June 30, 2020 Short-term portion $ 12,639,062 $ 7,443,257 Long-term portion 16,307,138 23,190,702 Total $ 28,946,200 $ 30,633,959

ACCRUED EXPENSES AND OTHER LI_2

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)	9 Months Ended
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)	Mar. 31, 2021
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: March 31, 2021 June 30, 2020 Accrued compensation and related benefits $ 726,294 $ 395,006 Deferred revenue 680,389 794,740 Accrued sales tax 506,746 295,651 Accrued cooperative advertising 81,644 89,517 Accrued severance 57,884 338,355 Other 1 9,063 Total accrued expenses and other liabilities $ 2,052,958 $ 1,922,332

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
COMMITMENTS AND CONTINGENCIES (Tables)	Mar. 31, 2021
COMMITMENTS AND CONTINGENCIES [Abstract]
Balance Sheet Classifications of Leases	As of March 31, 2021, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 4,123,956 Current operating lease liabilities $ 516,576 Noncurrent operating lease liabilities 3,782,296 Total operating lease liabilities $ 4,298,872
Remaining Future Payments Under Operating Leases	As of March 31, 2021, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2021 $ 161,852 2022 575,591 2023 869,742 2024 893,660 2025 918,236 2026 943,487 2027 317,327 Total lease payments 4,679,895 Less: imputed interest 381,023 Present value of lease payments 4,298,872 Less: current lease liability 516,576 Total long-term lease liability $ 3,782,296

DEBT (Tables)

DEBT (Tables)	9 Months Ended
DEBT (Tables)	Mar. 31, 2021
DEBT [Abstract]
Long-Term Debt	As of the dates presented, the Company’s total long-term debt is classified as follows: March 31, 2021 June 30, 2020 Current maturity of long-term debt $ 643,000 $ 193,000 Long-term debt, net 322,000 772,000 Total long-term debt $ 965,000 $ 965,000

SHAREHOLDERS' EQUITY AND STOC_2

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)	9 Months Ended
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)	Mar. 31, 2021
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 (loss) for the periods presented: Three Months Ended March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Employee stock options $ 45,312 $ 43,874 $ 186,528 $ 155,938 Restricted stock awards 31,604 (188,502 ) 85,681 58,539 Totals $ 76,916 $ (144,628 ) $ 272,209 $ 214,477
Stock Option Activity	The following is a summary of the stock option activity for the nine months ended March 31, 2021: Shares Weighted Average Exercise Price Outstanding, June 30, 2020 2,809,095 $ 1.19 Granted 438,533 $ 1.05 Exercised (887,290 ) $ 1.14 Forfeited (7,000 ) $ 1.23 Expired (57,907 ) $ 1.95 Outstanding, March 31, 2021 2,295,431 $ 1.24
Stock Options Outstanding	The following table summarizes information about stock options outstanding at March 31, 2021: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 3/31/2021 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 3/31/2021 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 3/31/2021 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,295,431 6.66 $ 1.24 1,666,148 5.65 $ 1.34 2,210,551 6.56 $ 1.25
Restricted Stock Activity	The following is a summary of the restricted stock activity for the nine months ended March 31, 2021: 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, March 31, 2021 178,750 $ 0.72

NET INCOME (LOSS) PER COMMON _2

NET INCOME (LOSS) PER COMMON SHARE (Tables)	9 Months Ended
NET INCOME (LOSS) PER COMMON SHARE (Tables)	Mar. 31, 2021
NET INCOME (LOSS) PER COMMON SHARE [Abstract]
Basic and Diluted Net Income (Loss) Per Share	The following table reconciles the differences between the basic and diluted net income (loss) per share presentations: Three Months Ended March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Numerator: Net income (loss) $ 1,036,227 $ (6,155,260 ) $ 4,429,570 $ (5,133,891 ) Denominator: Weighted average common shares outstanding: Basic 29,320,434 28,656,910 28,967,946 28,625,723 Effect of dilutive securities 1,205,004 - 699,783 - Diluted 30,525,438 28,656,910 29,667,729 28,625,723 Net income (loss) per common share: Basic $ 0.04 $ (0.21 ) $ 0.15 $ (0.18 ) Diluted $ 0.03 $ (0.21 ) $ 0.15 $ (0.18 )

MAJOR CUSTOMERS AND CONCENTRA_2

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)	9 Months Ended
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)	Mar. 31, 2021
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: March 31, 2021 June 30, 2020 Customer A 31 % 26 % Customer B 20 % * % 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 March 31, 2021. A significant portion of sales is derived from certain customer relationships. The following is a summary of customers that represent greater than or equal to 10% of total net sales for the periods presented: Three Months Ended March 31, Nine Months Ended March 31, 2021 2020 2021 2020 Customer A 15 % 11 % 13 % 13 % Customer C 13 % 15 % 11 % 14 % Customer E * % 11 % * % * % * Customer E did not have net sales that represented 10% or more of total net sales for the three months ended March 31, 2021 and for the nine months ended March 31, 2021 and 2020.

BASIS OF PRESENTATION AND SIG_4

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Reclassifications (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020
Reclassifications [Abstract]
Accounts payable	$ 2,920,570	$ 3,748,235
Accrued expenses and other liabilities	$ 2,052,958	$ 1,922,332
Reclassification [Member]
Reclassifications [Abstract]
Accounts payable			$ (274,000)
Accrued expenses and other liabilities			$ 274,000

BASIS OF PRESENTATION AND SIG_5

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Restricted Cash (Details) - USD ($)	9 Months Ended
	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019
Cash, Cash Equivalents and Restricted Cash [Abstract]
Cash and cash equivalents	$ 19,608,801	$ 13,993,032
Restricted cash	66,572	624,202
Total cash, cash equivalents, and restricted cash	$ 19,675,373	$ 14,617,234	$ 11,901,315	$ 13,006,545
Maximum [Member]
Restricted Cash [Abstract]
Restriction period on access and usage of certain cash deposit balances	2 days

BASIS OF PRESENTATION AND SIG_6

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Recently Adopted/Issued Accounting Pronouncements (Details)	9 Months Ended
	Mar. 31, 2021USD ($)
Recently Adopted/Issued Accounting Pronouncements [Abstract]
Borrowings against line of credit	$ 0
LIBOR [Member]
Recently Adopted/Issued Accounting Pronouncements [Abstract]
Term of variable rate	1 month

SEGMENT INFORMATION AND GEOGR_3

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Summary Financial Information by Reportable Segment (Details)	3 Months Ended		9 Months Ended
	Mar. 31, 2021USD ($)	Mar. 31, 2020USD ($)	Mar. 31, 2021USD ($)Segment	Mar. 31, 2020USD ($)
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	$ 9,436,056	$ 6,491,048	$ 29,509,140	$ 24,758,559
Product line cost of goods sold	5,093,452	9,171,932	15,457,215	18,579,069
Operating income (loss)	1,038,571	(6,193,870)	4,433,825	(5,277,240)
Depreciation and amortization	148,450	132,019	419,511	366,322
Capital expenditures	78,628	73,597	346,112	394,825
Product Line [Member]
Summary Information by Reportable Segment [Abstract]
Product line cost of goods sold	4,520,274	3,101,550	13,826,235	11,649,680
Product line gross profit	4,915,782	3,389,498	15,682,905	13,108,879
Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	6,219,892	3,480,168	18,820,428	13,776,510
Product line cost of goods sold	3,051,936	1,589,501	8,808,372	6,256,525
Product line gross profit	3,167,956	1,890,667	10,012,056	7,519,985
Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	3,216,164	3,010,880	10,688,712	10,982,049
Product line cost of goods sold	1,468,338	1,512,049	5,017,863	5,393,155
Product line gross profit	1,747,826	1,498,831	5,670,849	5,588,894
Operating and Reportable Segments [Member] \| Online Channels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	5,583,768	3,838,257	17,635,341	13,628,641
Product line cost of goods sold	2,291,821	1,682,864	7,190,052	5,806,550
Product line gross profit	3,291,947	2,155,393	10,445,289	7,822,091
Operating income (loss)	751,953	(332,837)	3,021,067	62,591
Depreciation and amortization	67,373	49,333	180,946	131,356
Capital expenditures	22,770	34,250	195,695	245,175
Operating and Reportable Segments [Member] \| Online Channels [Member] \| Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	4,902,964	2,922,439	15,114,765	11,044,107
Product line cost of goods sold	2,045,519	1,286,865	6,242,635	4,739,488
Product line gross profit	2,857,445	1,635,574	8,872,130	6,304,619
Operating and Reportable Segments [Member] \| Online Channels [Member] \| Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	680,804	915,818	2,520,576	2,584,534
Product line cost of goods sold	246,302	395,999	947,417	1,067,062
Product line gross profit	434,502	519,819	1,573,159	1,517,472
Operating and Reportable Segments [Member] \| Traditional [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	3,852,288	2,652,791	11,873,799	11,129,918
Product line cost of goods sold	2,228,453	1,418,686	6,636,183	5,843,130
Product line gross profit	1,623,835	1,234,105	5,237,616	5,286,788
Operating income (loss)	286,618	(5,861,033)	1,412,758	(5,339,831)
Depreciation and amortization	81,077	82,686	238,565	234,966
Capital expenditures	55,858	39,347	150,417	149,650
Operating and Reportable Segments [Member] \| Traditional [Member] \| Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,316,928	557,729	3,705,663	2,732,403
Product line cost of goods sold	1,006,417	302,636	2,565,737	1,517,037
Product line gross profit	310,511	255,093	1,139,926	1,215,366
Operating and Reportable Segments [Member] \| Traditional [Member] \| Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	2,535,360	2,095,062	8,168,136	8,397,515
Product line cost of goods sold	1,222,036	1,116,050	4,070,446	4,326,093
Product line gross profit	$ 1,313,324	$ 979,012	$ 4,097,690	$ 4,071,422

SEGMENT INFORMATION AND GEOGR_4

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Cost of Goods Sold (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	$ 5,093,452	$ 9,171,932	$ 15,457,215	$ 18,579,069
Inventory write-off			128,000	5,620,991
Product Line [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	4,520,274	3,101,550	13,826,235	11,649,680
Segment Reconciling Item [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Non-capitalized manufacturing and production control expenses	398,073	286,722	1,122,715	1,104,241
Freight out	191,700	153,081	683,580	425,433
Inventory write-off	23,000	5,471,992	128,000	5,620,991
Other inventory adjustments	$ (39,595)	$ 158,587	$ (303,315)	$ (221,276)

SEGMENT INFORMATION AND GEOGR_5

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Net Sales by Geographic Area (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Net Sales by Geographic Area [Abstract]
Net sales	$ 9,436,056	$ 6,491,048	$ 29,509,140	$ 24,758,559
Reportable Geographical Component [Member] \| United States [Member]
Net Sales by Geographic Area [Abstract]
Net sales	8,969,267	6,153,787	27,857,667	22,560,974
Reportable Geographical Component [Member] \| International [Member]
Net Sales by Geographic Area [Abstract]
Net sales	$ 466,789	$ 337,261	$ 1,651,473	$ 2,197,585

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($)	9 Months Ended
FAIR VALUE MEASUREMENTS (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
FAIR VALUE MEASUREMENTS [Abstract]
Asset impairment	$ 0	$ 0

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Inventories [Abstract]
Total supplies inventory	$ 99,674	$ 88,034
Total inventory	28,946,200	30,633,959
Short-term portion	12,639,062	7,443,257
Long-term portion	16,307,138	23,190,702
Work-in-process inventories issued to active production jobs	1,880,000	1,340,000
Finished Jewelry [Member]
Inventories [Abstract]
Raw materials	1,298,234	821,536
Work-in-process	1,038,718	602,390
Finished goods	7,514,587	6,019,985
Finished goods on consignment	2,104,358	2,297,907
Total	11,955,897	9,741,818
Loose Jewels [Member]
Inventories [Abstract]
Raw materials	1,795,625	3,526,399
Work-in-process	9,531,730	10,453,586
Finished goods	5,356,833	6,619,487
Finished goods on consignment	206,441	204,635
Total	$ 16,890,629	$ 20,804,107

NOTE RECEIVABLE (Details)

NOTE RECEIVABLE (Details) - Convertible Promissory Note [Member]	Mar. 05, 2021USD ($)
Note Receivable [Abstract]
Note receivable	$ 250,000
Interest rate	0.14%
Interest rate during event of default	5.00%

ACCRUED EXPENSES AND OTHER LI_3

ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Accrued compensation and related benefits	$ 726,294	$ 395,006
Deferred revenue	680,389	794,740
Accrued sales tax	506,746	295,651
Accrued cooperative advertising	81,644	89,517
Accrued severance	57,884	338,355
Other	1	9,063
Total accrued expenses and other liabilities	$ 2,052,958	$ 1,922,332

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		9 Months Ended
INCOME TAXES (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
INCOME TAXES [Abstract]
Income tax expense (benefit) for estimated tax, penalties, and interest for other uncertain tax positions	$ 500	$ 500	$ 1,000	$ 1,000

COMMITMENTS AND CONTINGENCIES,

COMMITMENTS AND CONTINGENCIES, Lease Arrangements (Details)	Jan. 29, 2021USD ($)	Mar. 31, 2021USD ($)ft²	Mar. 31, 2020USD ($)	Mar. 31, 2021USD ($)ft²	Mar. 31, 2020USD ($)	Jun. 30, 2020USD ($)
COMMITMENTS AND CONTINGENCIES [Abstract]
Area leased under operating lease \| ft²		36,350		36,350
Period of extension on option		5 years		5 years
Minimum notice period for extension of lease term				270 days
Rent abatement	$ 214,000
Allowance for leasehold improvements	545,000
Balance Sheet Classifications of Leases [Abstract]
Noncurrent operating lease ROU assets		$ 4,123,956		$ 4,123,956		$ 584,143
Operating Lease Liabilities [Abstract]
Current operating lease liabilities		516,576		516,576		622,493
Noncurrent operating lease liabilities		3,782,296		3,782,296		203,003
Total operating lease liabilities		4,298,872		4,298,872
Operating lease cost		$ 192,000	$ 117,000	$ 473,000	$ 352,000
Assumed discount rate		2.81%		2.81%
Remaining operating lease term		5 years 6 months 29 days		5 years 6 months 29 days
Future Lease Payments Under Operating Leases [Abstract]
2021		$ 161,852		$ 161,852
2022		575,591		575,591
2023		869,742		869,742
2024		893,660		893,660
2025		918,236		918,236
2026		943,487		943,487
2027		317,327		317,327
Total lease payments		4,679,895		4,679,895
Less: imputed interest		381,023		381,023
Total operating lease liabilities		4,298,872		4,298,872
Less: current lease liability		516,576		516,576		622,493
Total long-term lease liability		3,782,296		3,782,296		$ 203,003
Cash paid for operating leases		160,000	$ 172,000	481,000	500,000
Unamortized lease assets	$ 300,000
ROU assets obtained in exchange for new operating lease liabilities		$ 3,900,000		$ 3,908,249	$ 0

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES, Purchase Commitments (Details) - SiC Materials [Member] $ in Thousands	9 Months Ended
	Mar. 31, 2021USD ($)Option	Mar. 31, 2020USD ($)
Purchase Commitments [Abstract]
Percentage of materials committed to be purchased	100.00%
Number of options to extend term of exclusive supply agreement \| Option	1
Extension period of exclusive supply agreement	2 years
Total purchase commitment	$ 52,950
Remaining purchase commitment	34,350
Purchases	2,280	$ 7,470
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 ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 18, 2020
Paycheck Protection Program Loan [Abstract]
Current maturity of long-term debt	$ 643,000	$ 193,000
Long-term debt, net	$ 322,000	772,000
PPP Loan [Member]
Paycheck Protection Program Loan [Abstract]
Principal amount			$ 965,000
Fixed interest rate	1.00%
Current maturity of long-term debt	$ 643,000	193,000
Long-term debt, net	322,000	772,000
Total long-term debt	$ 965,000	$ 965,000

DEBT, Line of Credit (Details)

DEBT, Line of Credit (Details)	9 Months Ended
DEBT, Line of Credit (Details)	Mar. 31, 2021USD ($)
LIBOR [Member]
Line of Credit [Abstract]
Term of variable rate	1 month
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)	9 Months Ended
	Mar. 31, 2021USD ($)
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		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Stock-Based Compensation [Abstract]
Employee stock options	$ 45,312	$ 43,874	$ 186,528	$ 155,938
Restricted stock awards	31,604		85,681	58,539
Restricted stock awards		(188,502)
Totals	76,916	(144,628)	272,209	214,477
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 ($)	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Stock Option Activity [Roll Forward]
Outstanding, beginning balance (in shares)	2,809,095
Granted (in shares)	438,533
Exercised (in shares)	(887,290)	0
Forfeited (in shares)	(7,000)
Expired (in shares)	(57,907)
Outstanding, ending balance (in shares)	2,295,431
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 1.19
Granted (in dollars per share)	1.05
Exercised (in dollars per share)	1.14
Forfeited (in dollars per share)	1.23
Expired (in dollars per share)	1.95
Outstanding, ending balance (in dollars per share)	$ 1.24
Fair Value of Stock Options [Abstract]
Fair value of stock options vested	$ 617,000

SHAREHOLDERS' EQUITY AND STOC_6

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Options Outstanding (Details) - Stock Options [Member] - USD ($)	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Stock Options Outstanding and Exercisable [Abstract]
Options outstanding, balance as of end of period (in shares)	2,295,431		2,809,095
Options outstanding, weighted average remaining contractual life	6 years 7 months 28 days
Options outstanding, weighted average exercise price (in dollars per share)	$ 1.24		$ 1.19
Options exercisable, balance as of end of period (in shares)	1,666,148
Options exercisable, weighted average remaining contractual life	5 years 7 months 24 days
Options exercisable, weighted average exercise price (in dollars per share)	$ 1.34
Options Vested or Expected to Vest [Abstract]
Options vested or expected to vest, balance as of end of period (in shares)	2,210,551
Options vested or expected to vest, weighted average remaining contractual life	6 years 6 months 22 days
Options vested or expected to vest, weighted average exercise price (in dollars per share)	$ 1.25
Unrecognized Stock-Based Compensation Expense [Abstract]
Unrecognized stock-based compensation expense	$ 240,000
Unrecognized stock-based compensation expense, period for recognition	20 months
Options outstanding, aggregate intrinsic value	$ 3,900,000
Options exercisable, aggregate intrinsic value	3,900,000
Options vested or expected to vest, aggregate intrinsic value	3,900,000
Options exercised, aggregate intrinsic value	$ 1,200,000
Options exercised (in shares)	887,290	0

SHAREHOLDERS' EQUITY AND STOC_7

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Restricted Stock Activity (Details) - Restricted Stock [Member] - USD ($)	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Restricted Stock Activity [Roll Forward]
Unvested, beginning balance (in shares)	162,500
Granted (in shares)	178,750
Canceled (in shares)	(162,500)
Unvested, ending balance (in shares)	178,750
Weighted Average Grant Date Fair Value [Roll Forward]
Unvested, beginning balance (in dollars per share)	$ 1.57
Granted (in dollars per share)	0.72
Canceled (in dollars per share)	1.57
Unvested, ending balance (in dollars per share)	$ 0.72
Unrecognized Stock-Based Compensation Expense [Abstract]
Unrecognized stock-based compensation expense	$ 43,000	$ 510,000
Unrecognized stock-based compensation expense, period for recognition	4 months

NET INCOME (LOSS) PER COMMON _3

NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($)	3 Months Ended						9 Months Ended
NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Mar. 31, 2021	Mar. 31, 2020
Numerator [Abstract]
Net income (loss)	$ 1,036,227	$ 2,519,077	$ 874,266	$ (6,155,260)	$ 814,050	$ 207,319	$ 4,429,570	$ (5,133,891)
Denominator [Abstract]
Weighted average common shares outstanding, Basic (in shares)	29,320,434			28,656,910			28,967,946	28,625,723
Effect of dilutive securities (in shares)	1,205,004			0			699,783	0
Weighted average common shares outstanding, Diluted (in shares)	30,525,438			28,656,910			29,667,729	28,625,723
Net income (loss) per common share [Abstract]
Basic (in dollars per share)	$ 0.04			$ (0.21)			$ 0.15	$ (0.18)
Diluted (in dollars per share)	$ 0.03			$ (0.21)			$ 0.15	$ (0.18)
Stock Options [Member]
Net Income (Loss) per Common Share [Abstract]
Shares excluded from the computation of diluted net income (loss) per common share (in shares)	1,090,000			2,540,000			1,600,000	2,540,000
Restricted Stock [Member]
Net Income (Loss) per Common Share [Abstract]
Shares excluded from the computation of diluted net income (loss) 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			9 Months Ended				12 Months Ended
	Mar. 31, 2021		Mar. 31, 2020	Mar. 31, 2021		Mar. 31, 2020		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	$ 3,610			$ 3,610				$ 2,010
Interest-bearing Deposits [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Amounts on deposit in excess of FDIC insurable limits	$ 15,640			$ 15,640				$ 11,640
Trade Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer A [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage				31.00%				26.00%
Trade Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer B [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage				20.00%					[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	15.00%		11.00%	13.00%		13.00%
Total Net Sales [Member] \| Customer Concentration Risk [Member] \| Customer C [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage	13.00%		15.00%	11.00%		14.00%
Total Net Sales [Member] \| Customer Concentration Risk [Member] \| Customer E [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage		[3]	11.00%		[3]		[3]

[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 March 31, 2021.
[3]	Customer E did not have net sales that represented 10% or more of total net sales for the three months ended March 31, 2021 and for the nine months ended March 31, 2021 and 2020.