Charles & Colvard (CTHR) 10-Q 2 Feb 23 2023 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2022	Jan. 27, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Document Transition Report	false
Entity File Number	000-23329
Entity Registrant Name	Charles & Colvard, Ltd.
Entity Central Index Key	0001015155
Entity Incorporation, State or Country Code	NC
Entity Tax Identification Number	56-1928817
Entity Address, Address Line One	170 Southport Drive
Entity Address, City or Town	Morrisville
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27560
City Area Code	919
Local Phone Number	468-0399
Title of 12(b) Security	Common Stock, no par value per share
Trading Symbol	CTHR
Security Exchange Name	NASDAQ
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		30,523,705

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2022	Jun. 30, 2022
Current assets:
Cash and cash equivalents	$ 11,960,102	$ 15,668,361
Restricted cash	5,065,189	5,510,979
Accounts receivable, net	2,086,868	2,220,816
Inventory, net	13,091,953	11,024,276
Note receivable	0	250,000
Prepaid expenses and other assets	1,241,712	1,190,012
Total current assets	33,445,824	35,864,444
Long-term assets:
Inventory, net	21,903,094	22,488,524
Property and equipment, net	2,215,274	1,901,176
Intangible assets, net	290,673	265,730
Operating lease right-of-use assets	2,488,052	2,787,419
Deferred income taxes, net	6,286,797	5,851,904
Note receivable	250,000	0
Other assets	50,300	49,658
Total long-term assets	33,484,190	33,344,411
TOTAL ASSETS	66,930,014	69,208,855
Current liabilities:
Accounts payable	4,860,869	4,401,229
Operating lease liabilities, current portion	868,269	856,571
Accrued expenses and other liabilities	1,398,178	1,546,483
Total current liabilities	7,127,316	6,804,283
Long-term liabilities:
Noncurrent operating lease liabilities	2,453,994	2,846,805
Total long-term liabilities	2,453,994	2,846,805
Total liabilities	9,581,310	9,651,088
Commitments and contingencies (Note 9)
Shareholders' equity:
Common stock, no par value; 50,000,000 shares authorized; 30,912,108 shares issued and 30,523,705 shares outstanding at December 31, 2022 and 30,778,046 shares issued and 30,747,759 shares outstanding at June 30, 2022	57,242,211	57,242,211
Additional paid-in capital	26,131,216	25,956,491
Treasury stock, at cost, 388,403 shares and 30,287 shares at December 31, 2022 and June 30, 2022, respectively	(489,979)	(38,164)
Accumulated deficit	(25,534,744)	(23,602,771)
Total shareholders' equity	57,348,704	59,557,767
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 66,930,014	$ 69,208,855

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2022	Jun. 30, 2022
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)	30,912,108	30,778,046
Common stock, shares outstanding (in shares)	30,523,705	30,747,759
Treasury stock (in shares)	388,403	30,287

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 10,366,122	$ 13,753,135	$ 17,740,204	$ 24,033,446
Costs and expenses:
Cost of goods sold	6,071,775	7,033,946	10,157,785	12,050,496
Sales and marketing	4,339,684	4,079,035	7,447,630	6,809,187
General and administrative	1,187,955	1,189,559	2,601,431	2,773,835
Total costs and expenses	11,599,414	12,302,540	20,206,846	21,633,518
(Loss) Income from operations	(1,233,292)	1,450,595	(2,466,642)	2,399,928
Other income (expense):
Interest income	59,574	490	99,776	845
Loss on foreign currency exchange	0	0	0	(34)
Total other income (expense), net	59,574	490	99,776	811
(Loss) Income before income taxes	(1,173,718)	1,451,085	(2,366,866)	2,400,739
Income tax benefit (expense)	131,937	(283,473)	434,893	(406,102)
Net (loss) income	$ (1,041,781)	$ 1,167,612	$ (1,931,973)	$ 1,994,637
Net (loss) income per common share:
Basic (in dollars per share)	$ (0.03)	$ 0.04	$ (0.06)	$ 0.07
Diluted (in dollars per share)	$ (0.03)	$ 0.04	$ (0.06)	$ 0.06
Weighted average number of shares used in computing net (loss) income per common share:
Basic (in shares)	30,344,954	30,287,677	30,408,018	30,159,543
Diluted (in shares)	30,344,954	31,315,488	30,408,018	31,237,948

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Total
Balance at Jun. 30, 2021	$ 56,057,109	$ 25,608,593	$ 0	$ (25,976,686)	$ 55,689,016
Balance (in shares) at Jun. 30, 2021					29,913,095
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	279,407	0	0	$ 279,407
Issuance of restricted stock	$ 0	0	0	0	0
Issuance of restricted stock (in shares)	242,725
Stock option exercises	$ 397,112	(139,742)	0	0	257,370
Stock option exercises (in shares)	183,637
Net (loss) income	$ 0	0	0	827,025	827,025
Balance at Sep. 30, 2021	56,454,221	25,748,258	0	(25,149,661)	$ 57,052,818
Balance (in shares) at Sep. 30, 2021					30,339,457
Balance at Jun. 30, 2021	56,057,109	25,608,593	0	(25,976,686)	$ 55,689,016
Balance (in shares) at Jun. 30, 2021					29,913,095
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income					$ 1,994,637
Balance at Dec. 31, 2021	56,902,098	25,787,933	0	(23,982,049)	$ 58,707,982
Balance (in shares) at Dec. 31, 2021					30,595,047
Balance at Sep. 30, 2021	56,454,221	25,748,258	0	(25,149,661)	$ 57,052,818
Balance (in shares) at Sep. 30, 2021					30,339,457
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	199,004	0	0	$ 199,004
Stock option exercises	$ 447,877	(159,329)	0	0	288,548
Stock option exercises (in shares)	255,590
Net (loss) income	$ 0	0	0	1,167,612	1,167,612
Balance at Dec. 31, 2021	56,902,098	25,787,933	0	(23,982,049)	$ 58,707,982
Balance (in shares) at Dec. 31, 2021					30,595,047
Balance at Jun. 30, 2022	57,242,211	25,956,491	(38,164)	(23,602,771)	$ 59,557,767
Balance (in shares) at Jun. 30, 2022					30,747,759
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	96,232	0	0	$ 96,232
Cancellation of restricted stock	$ 0	0	0	0	0
Cancellation of restricted stock (in shares)	(44,688)
Repurchases of common stock	$ 0	0	$ (451,815)	0	(451,815)
Repurchases of common stock (in shares)			(358,116)
Net (loss) income	0	0	$ 0	(890,192)	(890,192)
Balance at Sep. 30, 2022	57,242,211	26,052,723	(489,979)	(24,492,963)	$ 58,311,992
Balance (in shares) at Sep. 30, 2022					30,344,955
Balance at Jun. 30, 2022	57,242,211	25,956,491	(38,164)	(23,602,771)	$ 59,557,767
Balance (in shares) at Jun. 30, 2022					30,747,759
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchases of common stock					$ (451,815)
Repurchases of common stock (in shares)					(358,116)
Net (loss) income					$ (1,931,973)
Balance at Dec. 31, 2022	57,242,211	26,131,216	(489,979)	(25,534,744)	$ 57,348,704
Balance (in shares) at Dec. 31, 2022					30,523,705
Balance at Sep. 30, 2022	57,242,211	26,052,723	(489,979)	(24,492,963)	$ 58,311,992
Balance (in shares) at Sep. 30, 2022					30,344,955
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	78,493	0	0	$ 78,493
Repurchases of common stock (in shares)					0
Issuance of restricted stock	$ 0	0		0	$ 0
Issuance of restricted stock (in shares)	178,750
Net (loss) income	$ 0	0	0	(1,041,781)	(1,041,781)
Balance at Dec. 31, 2022	$ 57,242,211	$ 26,131,216	$ (489,979)	$ (25,534,744)	$ 57,348,704
Balance (in shares) at Dec. 31, 2022					30,523,705

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (1,931,973)	$ 1,994,637
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	308,900	238,210
Stock-based compensation	174,725	478,411
Provision for uncollectible accounts	0	52,000
Provision for sales returns	422,000	652,000
Inventory write-downs	119,000	232,000
Provision for accounts receivable discounts	4,899	29,250
Deferred income taxes	(434,893)	405,159
Changes in operating assets and liabilities:
Accounts receivable	(292,951)	(2,718,303)
Inventory	(1,601,247)	(2,899,591)
Prepaid expenses and other assets, net	247,025	(483,054)
Accounts payable	459,640	2,096,372
Accrued income taxes	0	943
Accrued expenses and other liabilities	(529,418)	43,297
Net cash (used in) provided by operating activities	(3,054,293)	121,331
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(617,283)	(775,705)
Payments for intangible assets	(30,658)	(27,730)
Net cash used in investing activities	(647,941)	(803,435)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock option exercises	0	545,918
Repurchases of common stock	(451,815)	0
Net cash (used in) provided by financing activities	(451,815)	545,918
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(4,154,049)	(136,186)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	21,179,340	21,446,951
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	17,025,291	21,310,765
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes	$ 5,900	$ 0

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	6 Months Ended
	Dec. 31, 2022
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 ® The Company sells loose moissanite jewels, loose lab grown diamonds, and finished jewelry featuring both moissanite and lab grown diamonds at wholesale prices to distributors, manufacturers, retailers, and designers, including some of the largest distributors and jewelry manufacturers in the world. The Company’s finished jewelry and loose moissanite jewels and lab grown diamonds that are mounted into fine jewelry by other manufacturers are sold at retail outlets and via the Internet. The Company sells at retail prices to end-consumers through its own Charles & Colvard Signature Showroom

BASIS OF PRESENTATION AND SIGNI

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Dec. 31, 2022
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 accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. However, certain information or footnote disclosures normally included in complete financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q include all normal and recurring adjustments necessary for the fair statement of the results for the interim periods presented. The results for the six months ended December 31, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2023. The condensed consolidated financial statements as of December 31, 2022 and for the three and six months ended December 31, 2022 and 2021 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2022 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 “2022 Annual Report”) for the fiscal year ended June 30, 2022 filed with the SEC on September 2, 2022. The accompanying condensed consolidated financial statements as of December 31, 2022, for the three and six months ended December 31, 2022 and 2021, and as of the fiscal year ended June 30, 2022, include the accounts of the Company and its wholly owned subsidiaries charlesandcolvard.com, LLC, including its wholly-owned subsidiary, moissaniteoulet.com, LLC, which was formed and incorporated as of February 24, 2022; 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 six-month periods ended December 31, 2022 or 2021. All intercompany accounts have been eliminated. Significant Accounting Policies – Use of Estimates Cash and Cash Equivalents – Restricted Cash – Pursuant to the terms and conditions of the Company’s broker-dealer agreement with Oppenheimer & Co., Inc. (“Oppenheimer”), with whom the Company has engaged to transact common stock share repurchases in connection with its stock repurchase program, the Company is required to maintain a funded liquid margin account held by Oppenheimer for the benefit of the Company. The purpose of this account is to fund the Company’s common stock purchases and any underlying transaction costs and fees. Depending upon the level and timing of stock repurchase activity, the funded margin account cash balance will fluctuate from time to time. At December 31, 2022 and June 30, 2022, cash in the amount of approximately $30 and approximately $461,000, respectively, was held by Oppenheimer. Such cash amount held by Oppenheimer was classified as restricted cash for financial reporting purposes on the Company’s condensed consolidated balance sheets. For additional information regarding the Company’s stock repurchase program, see Note 11, “Shareholders’ Equity and Stock-Based Compensation.” The reconciliation of cash, cash equivalents, and restricted cash, as presented on the Condensed Consolidated Statements of Cash Flows, consist of the following as of the dates presented: December 31, 2022 June 30, 2022 Cash and cash equivalents $ 11,960,102 $ 15,668,361 Restricted cash 5,065,189 5,510,979 Total cash, cash equivalents, and restricted cash $ 17,025,291 $ 21,179,340 Reclassification – amounts in the Company’s condensed consolidated financial statements for the quarterly period ended December 31, 2022 have been reclassified to conform to current presentation, principally amounts presented in Note 7, “Accrued Expenses and Other Liabilities”, relating to the combination of accrued sales taxes and accrued franchise taxes, which had previously been presented separately. These reclassifications had no impact on the Company’s condensed consolidated financial position or condensed consolidated results of operations as of or for the three and six months ended December 31, 2022 and 2021 and as of the year ended June 30, 2022. Recently Adopted/Issued Accounting Pronouncements – Financial Accounting Standards Board (“ ”) Accounting Standards Update (“ ”) Reference Rate Reform (Topic 848)

SEGMENT INFORMATION AND GEOGRAP

SEGMENT INFORMATION AND GEOGRAPHIC DATA	6 Months Ended
	Dec. 31, 2022
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 , including its own Charles & Colvard Signature Showroom 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 December 31, 2022 Online Channels Traditional Total Net sales Finished jewelry $ 7,123,440 $ 1,312,768 $ 8,436,208 Loose jewels 722,388 1,207,526 1,929,914 Total $ 7,845,828 $ 2,520,294 $ 10,366,122 Product line cost of goods sold Finished jewelry $ 3,446,197 $ 739,134 $ 4,185,331 Loose jewels 263,285 607,965 871,250 Total $ 3,709,482 $ 1,347,099 $ 5,056,581 Product line gross profit Finished jewelry $ 3,677,243 $ 573,634 $ 4,250,877 Loose jewels 459,103 599,561 1,058,664 Total $ 4,136,346 $ 1,173,195 $ 5,309,541 Operating loss $ (346,102 ) $ (887,190 ) $ (1,233,292 ) Depreciation and amortization $ 56,505 $ 114,684 $ 171,189 Capital expenditures $ 22,620 $ 164,263 $ 186,883 Three Months Ended December 31, 2021 Online Channels Traditional Total Net sales Finished jewelry $ 8,452,535 $ 2,086,631 $ 10,539,166 Loose jewels 871,119 2,342,850 3,213,969 Total $ 9,323,654 $ 4,429,481 $ 13,753,135 Product line cost of goods sold Finished jewelry $ 3,432,950 $ 1,271,026 $ 4,703,976 Loose jewels 333,785 1,100,780 1,434,565 Total $ 3,766,735 $ 2,371,806 $ 6,138,541 Product line gross profit Finished jewelry $ 5,019,585 $ 815,605 $ 5,835,190 Loose jewels 537,334 1,242,070 1,779,404 Total $ 5,556,919 $ 2,057,675 $ 7,614,594 Operating income $ 1,432,727 $ 17,868 $ 1,450,595 Depreciation and amortization $ 53,470 $ 60,528 $ 113,998 Capital expenditures $ 27,040 $ 350,545 $ 377,585 Six Months Ended December 31, 2022 Online Channels Traditional Total Net sales Finished jewelry $ 11,527,029 $ 2,449,585 $ 13,976,614 Loose jewels 1,171,285 2,592,305 3,763,590 Total $ 12,698,314 $ 5,041,890 $ 17,740,204 Product line cost of goods sold Finished jewelry $ 5,416,308 $ 1,375,723 $ 6,792,031 Loose jewels 425,984 1,270,889 1,696,873 Total $ 5,842,292 $ 2,646,612 $ 8,488,904 Product line gross profit Finished jewelry $ 6,110,721 $ 1,073,862 $ 7,184,583 Loose jewels 745,301 1,321,416 2,066,717 Total $ 6,856,022 $ 2,395,278 $ 9,251,300 Operating loss $ (955,647 ) $ (1,510,995 ) $ (2,466,642 ) Depreciation and amortization $ 119,892 $ 189,008 $ 308,900 Capital expenditures $ 159,608 $ 457,675 $ 617,283 Six Months Ended December 31, 2021 Online Channels Traditional Total Net sales Finished jewelry $ 12,939,493 $ 3,285,960 $ 16,225,453 Loose jewels 1,753,966 6,054,027 7,807,993 Total $ 14,693,459 $ 9,339,987 $ 24,033,446 Product line cost of goods sold Finished jewelry $ 5,144,174 $ 1,894,285 $ 7,038,459 Loose jewels 647,890 2,846,121 3,494,011 Total $ 5,792,064 $ 4,740,406 $ 10,532,470 Product line gross profit Finished jewelry $ 7,795,319 $ 1,391,675 $ 9,186,994 Loose jewels 1,106,076 3,207,906 4,313,982 Total $ 8,901,395 $ 4,599,581 $ 13,500,976 Operating income $ 1,754,398 $ 645,530 $ 2,399,928 Depreciation and amortization $ 121,172 $ 117,038 $ 238,210 Capital expenditures $ 86,300 $ 689,405 $ 775,705 The Company does not allocate any assets to the reportable segments, and, therefore, no asset information is reported to the chief operating decision maker or disclosed in the financial information for each segment. A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the condensed consolidated financial statements is as follows: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Product line cost of goods sold $ 5,056,581 $ 6,138,541 $ 8,488,904 $ 10,532,470 Non-capitalized manufacturing and production control expenses 686,834 416,828 1,063,887 759,229 Freight out 358,617 465,207 634,354 682,712 Inventory write-downs - - 119,000 232,000 Other inventory adjustments (30,257 ) 13,370 (148,360 ) (155,915 ) Cost of goods sold $ 6,071,775 $ 7,033,946 $ 10,157,785 $ 12,050,496 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 December 31, Six Months Ended December 31, 2022 2021 2022 2021 Net sales United States $ 9,989,702 $ 13,021,717 $ 17,085,074 $ 22,846,447 International 376,420 731,418 655,130 1,186,999 Total $ 10,366,122 $ 13,753,135 $ 17,740,204 $ 24,033,446

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Dec. 31, 2022
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 are reflected in the condensed consolidated balance sheets at carrying value, which approximates fair value due to the 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 three and six months ended December 31, 2022 and 2021, no impairment was recorded.

INVENTORIES

INVENTORIES	6 Months Ended
	Dec. 31, 2022
INVENTORIES [Abstract]
INVENTORIES	5. INVENTORIES The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2022 June 30, 2022 Finished jewelry: Raw materials $ 1,427,479 $ 1,697,361 Work-in-process 758,703 1,260,728 Finished goods 14,160,399 12,100,910 Finished goods on consignment 2,417,645 2,135,856 Total finished jewelry $ 18,764,226 $ 17,194,855 Loose jewels: Raw materials $ 1,455,749 $ 1,985,355 Work-in-process 8,720,482 8,485,713 Finished goods 5,473,592 5,454,266 Finished goods on consignment 260,271 303,491 Total loose jewels 15,910,094 16,228,825 Total supplies inventory 320,727 89,120 Total inventory $ 34,995,047 $ 33,512,800 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: December 31, 2022 June 30, 2022 Short-term portion $ 13,091,953 $ 11,024,276 Long-term portion 21,903,094 22,488,524 Total $ 34,995,047 $ 33,512,800 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 goods set with moissanite jewels, that have been issued to jobs in the manufacture of finished jewelry. The Company’s moissanite jewel manufacturing process involves the production of intermediary shapes, called “preforms,” that vary depending upon the expected size and shape of the finished jewel. To maximize manufacturing efficiencies, preforms may be made in advance of current finished inventory needs but remain in work-in-process inventories. As of December 31, 2022 and June 30, 2022, work-in-process inventories issued to active production jobs approximated $1.37 million and $2.76 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, approximately one-half 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 include significant estimates by management, including the effect of market factors and sales trends. .

NOTE RECEIVABLE

NOTE RECEIVABLE	6 Months Ended
	Dec. 31, 2022
NOTE RECEIVABLE [Abstract]
NOTE RECEIVABLE	6. NOTE RECEIVABLE On March 5, 2021, the Company entered into a $250,000 Interest is accrued at a simple rate of 0.14% per annum and will continue to accrue until the Convertible Promissory Note is converted in accordance with the conversion privileges contained within the Convertible Promissory Note or is repaid. 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 at the lesser of 80% of the per unit price of the units purchased by investors or the price equal to $33,500,000 divided by the aggregate number of outstanding units of the borrower immediately prior to the closing of the 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	6 Months Ended
	Dec. 31, 2022
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
ACCRUED EXPENSES AND OTHER LIABILITIES	7. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities, current, consist of the following as of the dates presented: December 31, 2022 June 30, 2022 Accrued compensation and related benefits $ 453,917 $ 614,443 Deferred revenue 469,157 452,866 Accrued sales taxes and franchise taxes 266,773 341,706 Accrued cooperative advertising 208,330 137,467 Other accrued expenses 1 1 Total accrued expenses and other liabilities $ 1,398,178 $ 1,546,483

INCOME TAXES

INCOME TAXES	6 Months Ended
	Dec. 31, 2022
INCOME TAXES [Abstract]
INCOME TAXES	8. INCOME TAXES For both the three and six months ended December 31, 2022, the Company’s average effective tax rate was 20.46% which consisted of the federal income tax rate of 21.00% and a blended state income tax rate benefit of 0.54%, net of the federal benefit. For both the three and six months ended December 31, 2021, the Company’s statutory tax rate was 22.24% which consisted of the federal income tax rate of 21% and a blended state income tax rate of 1.24%, net of the federal benefit. The Company’s effective income tax rate reflects the effect of federal and state income taxes on earnings and the impact of differences in book and tax accounting arising primarily from the permanent tax benefits associated with stock-based compensation transactions during the quarter. For the six months ended December 31, 2022 and 2021, the Company’s effective tax rate was 18.37% and 16.92%, respectively. The Company recognized a net income tax benefit of approximately $132,000 and $435,000 for the three and six months ended December 31, 2022, respectively, compared with a net income tax expense of approximately $283,000 and $406,000 for the three and six months ended December 31, 2021, respectively. As of each reporting date, management considers new evidence, both positive and negative, that could impact the Company’s view with regard to future realization of deferred tax assets. As of December 31, 2022, management determined that the Company’s expectations of future taxable income in upcoming tax years, including estimated growth rates applied to future expected taxable income that includes significant management estimates and assumptions, would continue to be sufficient to result in full utilization of the Company’s remaining federal net operating loss carryforwards and certain of the deferred tax assets prior to any statutory expiration. As a result, management determined that sufficient positive evidence existed as of December 31, 2022, to conclude that it is more likely than not deferred tax assets of approximately $6.29 million remain realizable. Conversely, management further determined that sufficient negative evidence continued to exist to conclude it was uncertain that the Company would have sufficient future taxable income to utilize certain of its deferred tax assets. Therefore, management continued to maintain a valuation allowance against the Company’s deferred tax assets relating to certain state net operating loss carryforwards from its e-commerce subsidiary due to the timing uncertainty of when it will generate positive taxable income to utilize the associated deferred tax assets. In addition, a valuation allowance remains against certain deferred tax assets relating to operating loss carryforwards relating to the Company’s dormant subsidiary located in Hong Kong.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Dec. 31, 2022
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 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 option is 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. As of the quarter ended December 31, 2022, the Company has been reimbursed approximately $506,000 by the landlord for qualified leasehold improvements in accordance with the terms of the Lease Amendment. This reimbursement by the landlord reduced the remaining ROU asset by the same amount and is being recognized prospectively 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 December 31, 2022, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 2,488,052 Current operating lease liabilities $ 868,269 Noncurrent operating lease liabilities 2,453,994 Total operating lease liabilities $ 3,322,263 The Company’s total operating lease cost was approximately $175,000 and $214,000 for the three months ended December 31, 2022 and 2021, respectively. The Company’s total operating lease cost was approximately $349,000 and $413,000 for the six months ended December 31, 2022 and 2021, respectively. As of December 31, 2022, 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 3.83 years. As of December 31, 2022, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2023 $ 438,785 2024 893,660 2025 918,236 2026 943,487 2027 317,327 Total lease payments 3,511,495 Less: imputed interest 189,232 Present value of lease payments 3,322,263 Less: current lease obligations 868,269 Total long-term lease obligations $ 2,453,994 The Company makes cash payments for amounts included in the measurement of its lease liabilities. During the three months ended December 31, 2022 and 2021, cash paid for operating leases was approximately $235,000 and $8,000, respectively. During the six months ended December 31, 2022 and 2021, cash paid for operating leases was approximately $466,000 and $170,000, respectively. Purchase Commitments On December 12, 2014, the Company entered into an exclusive supply agreement (the “Supply Agreement”) with Wolfspeed, Inc. (“Wolfspeed”). Under the Supply Agreement, subject to certain terms and conditions, the Company agreed to exclusively purchase from Wolfspeed, and Wolfspeed agreed to exclusively supply, 100% of the Company’s required SiC materials in quarterly installments that must equal or exceed a set minimum order quantity. The initial term of the Supply Agreement was scheduled to expire on June 24, 2018, unless extended by the parties. Effective June 22, 2018, the Supply Agreement was amended to extend the expiration date to June 25, 2023. The Supply Agreement was also amended to (i) provide the Company with one option, subject to certain conditions, to unilaterally extend the term of the Supply Agreement for an additional two-year period following expiration of the initial term; (ii) establish a process by which Wolfspeed may begin producing alternate SiC material based on the Company’s specifications that will give the Company the flexibility to use the materials in a broader variety of its products; and (iii) permit the Company to purchase certain amounts of SiC materials from third parties under limited conditions. 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) spread the Company’s total purchase commitment under the Supply Agreement in the amount of approximately $52.95 million over the term of the Supply Agreement, as amended; (ii) establish a process by which Wolfspeed has agreed to accept purchase orders in excess of the agreed-upon minimum purchase commitment, subject to certain conditions; and (iii) permit the Company to purchase revised amounts of SiC materials from third parties under limited conditions. The Company’s total purchase commitment under the Supply Agreement, as amended, until June 2025 is approximately $52.95 million, of which approximately $24.75 million remains to be purchased as of December 31, 2022. Over the life of the Supply Agreement, as amended, the Company’s future minimum annual purchase commitments of SiC crystals range from approximately $4.00 million to $10.00 million each year. During the six months ended December 31, 2022 and 2021, the Company purchased approximately $1.80 million and $3.00 million, respectively, of SiC crystals from Wolfspeed pursuant to the terms of the Supply Agreement, as amended. Inflation Heightened levels of inflation and the potential worsening of macro-economic conditions present a risk for the Company, its suppliers, and the stability of the broader retail and e-commerce industry. During the first six months of the Company’s fiscal year ending June 30, 2023 (“Fiscal 2023”), the Company has experienced impacts to its labor and overhead rates and suppliers have signaled inflation related cost pressures, which is expected to flow through to the Company’s costs and pricing. While the Company has seen some impact from inflation on its financial results in the first six months of Fiscal 2023, if inflation remains at current levels for an extended period, or increases, and the Company is unable to successfully mitigate the impact, the Company’s costs are likely to continue to increase, resulting in further pressure on its revenues, margins, and cash flows. In addition, inflation and the increases in the cost of borrowing from rising interest rates could constrain the overall purchasing power of the Company’s customers for its products and services, in particular in the near term to the extent inflation assumptions are less than current inflationary pressures.

DEBT

DEBT	6 Months Ended
	Dec. 31, 2022
DEBT [Abstract]
DEBT	10. DEBT Line of Credit Effective July 7, 2021, the Company obtained from JPMorgan Chase a $5.00 million cash collateralized line of credit facility (the “JPMorgan Chase Credit Facility”). The JPMorgan Chase Credit Facility may be used for general corporate and working capital purposes, including permitted acquisitions and certain additional indebtedness for borrowed money, installment obligations, and obligations under capital and operating leases. The JPMorgan Chase Credit Facility is secured by a cash deposit in the amount of $5.05 million held by JPMorgan Chase as collateral for the line of credit facility and was scheduled to mature on July 31, 2022. Effective July 28, 2022, the JPMorgan Chase Credit Facility was amended to, among other things, extend the maturity date to July 31, 2023, and append the Company’s obligations under the JPMorgan Chase Credit Facility to be guaranteed by the Company’s wholly owned subsidiaries, Charles & Colvard Direct, LLC, charlesandcolvard.com, LLC, and moissaniteoutlet.com, LLC . Each advance under the JPMorgan Chase Credit Facility, as amended, accrues interest at a rate equal to the sum of JPMorgan Chase’s monthly secured overnight financing rate (“SOFR rate”) to which JPMorgan Chase is subject with respect to the adjusted SOFR rate as established by the U.S. Federal Reserve Board, plus a margin of 1.25% per annum and an unsecured to secured interest rate adjustment of 0.10% per annum. Prior to its amendment, each advance under the JPMorgan Chase Credit Facility would have accrued interest at a rate equal to JPMorgan Chase’s monthly LIBOR rate multiplied by a statutory reserve rate for eurocurrency funding to which JPMorgan Chase is subject with respect to the adjusted LIBOR rate as established by the U.S. Federal Reserve Board, plus a margin of 1.25% per annum. Interest is calculated monthly on an actual/360-day basis and payable monthly in arrears. Principal outstanding during an event of default, at JPMorgan Chase’s option, accrues interest at a rate of 3% per annum in excess of the above rate. Any advance may be prepaid in whole or in part without penalty at any time . As of December 31, 2022, the Company had not borrowed against the JPMorgan Chase Credit Facility and had no outstanding debt as of the period then ended .

SHAREHOLDERS' EQUITY AND STOCK-

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION	6 Months Ended
	Dec. 31, 2022
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION [Abstract]
SHAREHOLDERS' EQUITY	11. SHAREHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Repurchases of Common Stock Pursuant to authority granted by the Company’s Board of Directors on April 29, 2022, the Company can repurchase up to approximately $5.00 million in shares outstanding of the Company’s common stock over the three-year period ending April 29, 2025. Pursuant to the terms of the repurchase authorization, the common stock share repurchases are generally at the discretion of the Company’s management. As the Company repurchases its common shares, which have no par value, the Company reports such shares held as treasury stock in the accompanying condensed consolidated balance sheets with the purchase price recorded within treasury stock. During the six-month period ended December 31, 2022, the Company repurchased 358,116 shares of the Company’s common stock for an aggregate price of $451,815 pursuant to the repurchase authorization. The Company repurchased no shares of the Company’s common stock during the three-month period ended December 31, 2022. Dividends The Company has paid no cash dividends during the current fiscal year through December 31, 2022.
STOCK-BASED COMPENSATION	11. SHAREHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Repurchases of Common Stock Pursuant to authority granted by the Company’s Board of Directors on April 29, 2022, the Company can repurchase up to approximately $5.00 million in shares outstanding of the Company’s common stock over the three-year period ending April 29, 2025. Pursuant to the terms of the repurchase authorization, the common stock share repurchases are generally at the discretion of the Company’s management. As the Company repurchases its common shares, which have no par value, the Company reports such shares held as treasury stock in the accompanying condensed consolidated balance sheets with the purchase price recorded within treasury stock. During the six-month period ended December 31, 2022, the Company repurchased 358,116 shares of the Company’s common stock for an aggregate price of $451,815 pursuant to the repurchase authorization. The Company repurchased no shares of the Company’s common stock during the three-month period ended December 31, 2022. Dividends The Company has paid no cash dividends during the current fiscal year through December 31, 2022. Stock-Based Compensation The following table summarizes the components of the Company’s stock-based compensation included in net income for the periods presented: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Employee stock options $ 49,704 $ 57,448 $ 122,202 $ 127,014 Restricted stock awards 28,789 141,556 52,523 351,397 Totals $ 78,493 $ 199,004 $ 174,725 $ 478,411 No stock-based compensation was capitalized as a cost of inventory during the three and six months ended December 31, 2022 and 2021. Stock Options The following is a summary of the stock option activity for the six months ended December 31, 2022: Shares Weighted Average Exercise Price Outstanding, June 30, 2022 1,658,803 $ 1.32 Granted 270,787 $ 1.02 Forfeited (19,336 ) $ 2.00 Expired (2,664 ) $ 0.98 Outstanding, December 31, 2022 1,907,590 $ 1.27 T he weighted average grant date fair value of stock options granted during the six months ended December 31, 2022 and 2021 was approximately $0.59 and $1.53, respectively. The total fair value of stock options that vested during the six months ended December 31, 2022 and 2021 was approximately $176,000 and $166,000, respectively. The following table summarizes information about stock options outstanding at December 31, 2022: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of December 31, 2022 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of December 31, 2022 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of December 31, 2022 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 1,907,590 6.86 $ 1.27 1,392,768 5.97 $ 1.21 1,854,215 6.80 $ 1.26 As of December 31, 2022, the unrecognized stock-based compensation expense related to unvested stock options was approximately $322,000, 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 December 31, 2022 and 2021 was approximately $57,000 and $3.04 million, respectively. These amounts are before applicable income taxes and represent the closing market price of the Company’s common stock at December 31, 2022 less the grant price, multiplied by the number of stock options that had a grant price that is less than the closing market price. These values represent the amount that would have been received by the optionees had these stock options been exercised on that date. During the six months ended December 31, 2021, the aggregate intrinsic value of stock options exercised was approximately $717,000. During the six months ended December 31, 2021, the total estimated tax benefit associated with certain stock options that were exercised was approximately $76,000. No stock options were exercised during the six-month period ended December 31, 2022. Restricted Stock The following is a summary of the restricted stock activity for the six months ended December 31, 2022: Shares Weighted Average Grant Date Fair Value Unvested, June 30, 2022 178,750 $ 2.75 Granted 178,750 $ 0.97 Vested (134,063 ) 2.75 Cancelled (44,687 ) $ 2.75 Unvested, December 31, 2022 178,750 $ 0.97 The unvested restricted shares as of December 31, 2022 are all performance-based restricted shares that are scheduled to vest, subject to achievement of the underlying performance goals, in July 2023. As of December 31, 2022, the estimated unrecognized stock-based compensation expense related to unvested restricted shares subject to achievement of performance goals was approximately $144,000, all of which is expected to be recognized over a weighted average period of approximately seven months.

NET (LOSS) INCOME PER COMMON SH

NET (LOSS) INCOME PER COMMON SHARE	6 Months Ended
	Dec. 31, 2022
NET (LOSS) INCOME PER COMMON SHARE [Abstract]
NET (LOSS) INCOME PER COMMON SHARE	12. NET (LOSS) INCOME PER COMMON SHARE Basic net (loss) income per common share is computed by dividing net (loss) 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 (loss) income per share presentations: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Numerator: Net (loss)income $ (1,041,781 ) $ 1,167,612 $ (1,931,973 ) $ 1,994,637 Denominator: Weighted average common shares outstanding: Basic 30,344,954 30,287,677 30,408,018 30,159,543 Effect of dilutive securities - 1,027,811 - 1,078,405 Diluted 30,344,954 31,315,488 30,408,018 31,237,948 Net (loss) income per common share: Basic $ (0.03 ) $ 0.04 $ (0.06 ) $ 0.07 Diluted $ (0.03 ) $ 0.04 $ (0.06 ) $ 0.06 For the three and six months ended December 31, 2022, stock options to purchase approximately 1.91 million shares were excluded from the computation of diluted net loss per common share because the effect of inclusion of such amounts would be anti-dilutive to net loss per common share. For the three and six months ended December 31, 2021 stock options to purchase approximately 836,000 and 786,000 shares, respectively,

MAJOR CUSTOMERS AND CONCENTRATI

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	6 Months Ended
	Dec. 31, 2022
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 principally of cash on deposit and cash equivalents held with banks and trade accounts receivable. The Company places cash deposits with federally insured financial institutions and maintains its cash at banks and financial institutions it considers to be of high credit quality. However, the Company’s cash deposits may at times exceed the Federal Deposit Insurance Corporation’s insurable limits. Accordingly, balances in excess of federally insured limitations may not be insured. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to significant risks on such accounts. 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 and lab grown diamonds to new or expanded markets. Collateral is not generally required from customers. The need for an allowance for doubtful accounts is determined based upon factors surrounding the credit risk of specific customers, historical trends, and other information. For additional information regarding the Company’s measurement and disclosure of credit losses on financial assets, including trade accounts receivable, see Note 4, “Fair Value Measurements.” At times, a portion of the Company’s accounts receivable will be due from customers that have individual balances of 10% or more of the Company’s total gross accounts receivable. The following is a summary of customers that represent 10% or more of total gross accounts receivable as of the dates presented: December 31, 2022 June 30, 2022 Customer A 20 % 20 % Customer B 20 % ** % Customer C * % 29 % Customer D * % 13 % * Customer C and Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2022. ** Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2022. A significant portion of sales is derived from certain customer relationships. The following is a summary of customers that represent 10% or more of total net sales for the periods presented: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Customer A 12 % 16 % 14 % 15 % Customer C * % * % * % 11 % * Customer C did not have net sales that represented 10% or more of total net sales for the three months ended December 31, 2022 and 2021 and the six months ended December 31, 2022.

BASIS OF PRESENTATION AND SIG_2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Dec. 31, 2022
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. However, certain information or footnote disclosures normally included in complete financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q include all normal and recurring adjustments necessary for the fair statement of the results for the interim periods presented. The results for the six months ended December 31, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2023. The condensed consolidated financial statements as of December 31, 2022 and for the three and six months ended December 31, 2022 and 2021 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2022 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 “2022 Annual Report”) for the fiscal year ended June 30, 2022 filed with the SEC on September 2, 2022.
Principles of Consolidation	The accompanying condensed consolidated financial statements as of December 31, 2022, for the three and six months ended December 31, 2022 and 2021, and as of the fiscal year ended June 30, 2022, include the accounts of the Company and its wholly owned subsidiaries charlesandcolvard.com, LLC, including its wholly-owned subsidiary, moissaniteoulet.com, LLC, which was formed and incorporated as of February 24, 2022; 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 six-month periods ended December 31, 2022 or 2021. All intercompany accounts have been eliminated.
Use of Estimates	Use of Estimates
Cash and Cash Equivalents	Cash and Cash Equivalents –
Restricted Cash	Restricted Cash – Pursuant to the terms and conditions of the Company’s broker-dealer agreement with Oppenheimer & Co., Inc. (“Oppenheimer”), with whom the Company has engaged to transact common stock share repurchases in connection with its stock repurchase program, the Company is required to maintain a funded liquid margin account held by Oppenheimer for the benefit of the Company. The purpose of this account is to fund the Company’s common stock purchases and any underlying transaction costs and fees. Depending upon the level and timing of stock repurchase activity, the funded margin account cash balance will fluctuate from time to time. At December 31, 2022 and June 30, 2022, cash in the amount of approximately $30 and approximately $461,000, respectively, was held by Oppenheimer. Such cash amount held by Oppenheimer was classified as restricted cash for financial reporting purposes on the Company’s condensed consolidated balance sheets. For additional information regarding the Company’s stock repurchase program, see Note 11, “Shareholders’ Equity and Stock-Based Compensation.” The reconciliation of cash, cash equivalents, and restricted cash, as presented on the Condensed Consolidated Statements of Cash Flows, consist of the following as of the dates presented: December 31, 2022 June 30, 2022 Cash and cash equivalents $ 11,960,102 $ 15,668,361 Restricted cash 5,065,189 5,510,979 Total cash, cash equivalents, and restricted cash $ 17,025,291 $ 21,179,340
Reclassification	Reclassification – amounts in the Company’s condensed consolidated financial statements for the quarterly period ended December 31, 2022 have been reclassified to conform to current presentation, principally amounts presented in Note 7, “Accrued Expenses and Other Liabilities”, relating to the combination of accrued sales taxes and accrued franchise taxes, which had previously been presented separately. These reclassifications had no impact on the Company’s condensed consolidated financial position or condensed consolidated results of operations as of or for the three and six months ended December 31, 2022 and 2021 and as of the year ended June 30, 2022.
Recently Adopted/Issued Accounting Pronouncements	Recently Adopted/Issued Accounting Pronouncements – Financial Accounting Standards Board (“ ”) Accounting Standards Update (“ ”) Reference Rate Reform (Topic 848)

BASIS OF PRESENTATION AND SIG_3

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Dec. 31, 2022
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, consist of the following as of the dates presented: December 31, 2022 June 30, 2022 Cash and cash equivalents $ 11,960,102 $ 15,668,361 Restricted cash 5,065,189 5,510,979 Total cash, cash equivalents, and restricted cash $ 17,025,291 $ 21,179,340

SEGMENT INFORMATION AND GEOGR_2

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)	6 Months Ended
	Dec. 31, 2022
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Summary Financial Information by Reportable Segment	Summary financial information by reportable segment is as follows: Three Months Ended December 31, 2022 Online Channels Traditional Total Net sales Finished jewelry $ 7,123,440 $ 1,312,768 $ 8,436,208 Loose jewels 722,388 1,207,526 1,929,914 Total $ 7,845,828 $ 2,520,294 $ 10,366,122 Product line cost of goods sold Finished jewelry $ 3,446,197 $ 739,134 $ 4,185,331 Loose jewels 263,285 607,965 871,250 Total $ 3,709,482 $ 1,347,099 $ 5,056,581 Product line gross profit Finished jewelry $ 3,677,243 $ 573,634 $ 4,250,877 Loose jewels 459,103 599,561 1,058,664 Total $ 4,136,346 $ 1,173,195 $ 5,309,541 Operating loss $ (346,102 ) $ (887,190 ) $ (1,233,292 ) Depreciation and amortization $ 56,505 $ 114,684 $ 171,189 Capital expenditures $ 22,620 $ 164,263 $ 186,883 Three Months Ended December 31, 2021 Online Channels Traditional Total Net sales Finished jewelry $ 8,452,535 $ 2,086,631 $ 10,539,166 Loose jewels 871,119 2,342,850 3,213,969 Total $ 9,323,654 $ 4,429,481 $ 13,753,135 Product line cost of goods sold Finished jewelry $ 3,432,950 $ 1,271,026 $ 4,703,976 Loose jewels 333,785 1,100,780 1,434,565 Total $ 3,766,735 $ 2,371,806 $ 6,138,541 Product line gross profit Finished jewelry $ 5,019,585 $ 815,605 $ 5,835,190 Loose jewels 537,334 1,242,070 1,779,404 Total $ 5,556,919 $ 2,057,675 $ 7,614,594 Operating income $ 1,432,727 $ 17,868 $ 1,450,595 Depreciation and amortization $ 53,470 $ 60,528 $ 113,998 Capital expenditures $ 27,040 $ 350,545 $ 377,585 Six Months Ended December 31, 2022 Online Channels Traditional Total Net sales Finished jewelry $ 11,527,029 $ 2,449,585 $ 13,976,614 Loose jewels 1,171,285 2,592,305 3,763,590 Total $ 12,698,314 $ 5,041,890 $ 17,740,204 Product line cost of goods sold Finished jewelry $ 5,416,308 $ 1,375,723 $ 6,792,031 Loose jewels 425,984 1,270,889 1,696,873 Total $ 5,842,292 $ 2,646,612 $ 8,488,904 Product line gross profit Finished jewelry $ 6,110,721 $ 1,073,862 $ 7,184,583 Loose jewels 745,301 1,321,416 2,066,717 Total $ 6,856,022 $ 2,395,278 $ 9,251,300 Operating loss $ (955,647 ) $ (1,510,995 ) $ (2,466,642 ) Depreciation and amortization $ 119,892 $ 189,008 $ 308,900 Capital expenditures $ 159,608 $ 457,675 $ 617,283 Six Months Ended December 31, 2021 Online Channels Traditional Total Net sales Finished jewelry $ 12,939,493 $ 3,285,960 $ 16,225,453 Loose jewels 1,753,966 6,054,027 7,807,993 Total $ 14,693,459 $ 9,339,987 $ 24,033,446 Product line cost of goods sold Finished jewelry $ 5,144,174 $ 1,894,285 $ 7,038,459 Loose jewels 647,890 2,846,121 3,494,011 Total $ 5,792,064 $ 4,740,406 $ 10,532,470 Product line gross profit Finished jewelry $ 7,795,319 $ 1,391,675 $ 9,186,994 Loose jewels 1,106,076 3,207,906 4,313,982 Total $ 8,901,395 $ 4,599,581 $ 13,500,976 Operating income $ 1,754,398 $ 645,530 $ 2,399,928 Depreciation and amortization $ 121,172 $ 117,038 $ 238,210 Capital expenditures $ 86,300 $ 689,405 $ 775,705
Reconciliation of Product Line Cost of Goods Sold	A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the condensed consolidated financial statements is as follows: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Product line cost of goods sold $ 5,056,581 $ 6,138,541 $ 8,488,904 $ 10,532,470 Non-capitalized manufacturing and production control expenses 686,834 416,828 1,063,887 759,229 Freight out 358,617 465,207 634,354 682,712 Inventory write-downs - - 119,000 232,000 Other inventory adjustments (30,257 ) 13,370 (148,360 ) (155,915 ) Cost of goods sold $ 6,071,775 $ 7,033,946 $ 10,157,785 $ 12,050,496
Net Sales by Geographic Area	The following presents net sales by geographic area: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Net sales United States $ 9,989,702 $ 13,021,717 $ 17,085,074 $ 22,846,447 International 376,420 731,418 655,130 1,186,999 Total $ 10,366,122 $ 13,753,135 $ 17,740,204 $ 24,033,446

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Dec. 31, 2022
INVENTORIES [Abstract]
Inventories	The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2022 June 30, 2022 Finished jewelry: Raw materials $ 1,427,479 $ 1,697,361 Work-in-process 758,703 1,260,728 Finished goods 14,160,399 12,100,910 Finished goods on consignment 2,417,645 2,135,856 Total finished jewelry $ 18,764,226 $ 17,194,855 Loose jewels: Raw materials $ 1,455,749 $ 1,985,355 Work-in-process 8,720,482 8,485,713 Finished goods 5,473,592 5,454,266 Finished goods on consignment 260,271 303,491 Total loose jewels 15,910,094 16,228,825 Total supplies inventory 320,727 89,120 Total inventory $ 34,995,047 $ 33,512,800 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: December 31, 2022 June 30, 2022 Short-term portion $ 13,091,953 $ 11,024,276 Long-term portion 21,903,094 22,488,524 Total $ 34,995,047 $ 33,512,800

ACCRUED EXPENSES AND OTHER LI_2

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)	6 Months Ended
	Dec. 31, 2022
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Accrued Expenses and Other Liabilities	Accrued expenses and other liabilities, current, consist of the following as of the dates presented: December 31, 2022 June 30, 2022 Accrued compensation and related benefits $ 453,917 $ 614,443 Deferred revenue 469,157 452,866 Accrued sales taxes and franchise taxes 266,773 341,706 Accrued cooperative advertising 208,330 137,467 Other accrued expenses 1 1 Total accrued expenses and other liabilities $ 1,398,178 $ 1,546,483

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Dec. 31, 2022
COMMITMENTS AND CONTINGENCIES [Abstract]
Balance Sheet Classifications of Leases	As of December 31, 2022, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 2,488,052 Current operating lease liabilities $ 868,269 Noncurrent operating lease liabilities 2,453,994 Total operating lease liabilities $ 3,322,263
Remaining Future Payments Under Operating Leases	As of December 31, 2022, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2023 $ 438,785 2024 893,660 2025 918,236 2026 943,487 2027 317,327 Total lease payments 3,511,495 Less: imputed interest 189,232 Present value of lease payments 3,322,263 Less: current lease obligations 868,269 Total long-term lease obligations $ 2,453,994

SHAREHOLDERS' EQUITY AND STOC_2

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Dec. 31, 2022
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION [Abstract]
Stock-Based Compensation	The following table summarizes the components of the Company’s stock-based compensation included in net income for the periods presented: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Employee stock options $ 49,704 $ 57,448 $ 122,202 $ 127,014 Restricted stock awards 28,789 141,556 52,523 351,397 Totals $ 78,493 $ 199,004 $ 174,725 $ 478,411
Stock Option Activity	Stock Options The following is a summary of the stock option activity for the six months ended December 31, 2022: Shares Weighted Average Exercise Price Outstanding, June 30, 2022 1,658,803 $ 1.32 Granted 270,787 $ 1.02 Forfeited (19,336 ) $ 2.00 Expired (2,664 ) $ 0.98 Outstanding, December 31, 2022 1,907,590 $ 1.27
Stock Options Outstanding	The following table summarizes information about stock options outstanding at December 31, 2022: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of December 31, 2022 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of December 31, 2022 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of December 31, 2022 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 1,907,590 6.86 $ 1.27 1,392,768 5.97 $ 1.21 1,854,215 6.80 $ 1.26
Restricted Stock Activity	The following is a summary of the restricted stock activity for the six months ended December 31, 2022: Shares Weighted Average Grant Date Fair Value Unvested, June 30, 2022 178,750 $ 2.75 Granted 178,750 $ 0.97 Vested (134,063 ) 2.75 Cancelled (44,687 ) $ 2.75 Unvested, December 31, 2022 178,750 $ 0.97

NET (LOSS) INCOME PER COMMON _2

NET (LOSS) INCOME PER COMMON SHARE (Tables)	6 Months Ended
	Dec. 31, 2022
NET (LOSS) INCOME PER COMMON SHARE [Abstract]
Basic and Diluted Net (Loss) Income per Share	The following table reconciles the differences between the basic and diluted net (loss) income per share presentations: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Numerator: Net (loss)income $ (1,041,781 ) $ 1,167,612 $ (1,931,973 ) $ 1,994,637 Denominator: Weighted average common shares outstanding: Basic 30,344,954 30,287,677 30,408,018 30,159,543 Effect of dilutive securities - 1,027,811 - 1,078,405 Diluted 30,344,954 31,315,488 30,408,018 31,237,948 Net (loss) income per common share: Basic $ (0.03 ) $ 0.04 $ (0.06 ) $ 0.07 Diluted $ (0.03 ) $ 0.04 $ (0.06 ) $ 0.06

MAJOR CUSTOMERS AND CONCENTRA_2

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)	6 Months Ended
	Dec. 31, 2022
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]
Major Customers	The following is a summary of customers that represent 10% or more of total gross accounts receivable as of the dates presented: December 31, 2022 June 30, 2022 Customer A 20 % 20 % Customer B 20 % ** % Customer C * % 29 % Customer D * % 13 % * Customer C and Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2022. ** Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2022. A significant portion of sales is derived from certain customer relationships. The following is a summary of customers that represent 10% or more of total net sales for the periods presented: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Customer A 12 % 16 % 14 % 15 % Customer C * % * % * % 11 % * Customer C did not have net sales that represented 10% or more of total net sales for the three months ended December 31, 2022 and 2021 and the six months ended December 31, 2022.

BASIS OF PRESENTATION AND SIG_4

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Restricted Cash (Details) - USD ($)	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Restricted Cash [Abstract]
Funded liquid margin account	$ 30	$ 461,000
Cash, Cash Equivalents and Restricted Cash [Abstract]
Cash and cash equivalents	11,960,102	15,668,361
Restricted cash	5,065,189	5,510,979
Total cash, cash equivalents, and restricted cash	17,025,291	$ 21,179,340	$ 21,310,765	$ 21,446,951
JPMorgan Chase Credit Facility [Member]
Restricted Cash [Abstract]
Borrowing capacity	5,000,000
Cash deposit	$ 5,050,000

BASIS OF PRESENTATION AND SIG_5

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Recently Adopted/Issued Accounting Pronouncements (Details) - JPMorgan Chase Credit Facility [Member]	6 Months Ended
	Dec. 31, 2022 USD ($)
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		6 Months Ended
	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($) Segment	Dec. 31, 2021 USD ($)
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	$ 10,366,122	$ 13,753,135	$ 17,740,204	$ 24,033,446
Product line cost of goods sold	6,071,775	7,033,946	10,157,785	12,050,496
Operating income (loss)	(1,233,292)	1,450,595	(2,466,642)	2,399,928
Depreciation and amortization	171,189	113,998	308,900	238,210
Capital expenditures	186,883	377,585	617,283	775,705
Product Line [Member]
Summary Information by Reportable Segment [Abstract]
Product line cost of goods sold	5,056,581	6,138,541	8,488,904	10,532,470
Product line gross profit	5,309,541	7,614,594	9,251,300	13,500,976
Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	8,436,208	10,539,166	13,976,614	16,225,453
Product line cost of goods sold	4,185,331	4,703,976	6,792,031	7,038,459
Product line gross profit	4,250,877	5,835,190	7,184,583	9,186,994
Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,929,914	3,213,969	3,763,590	7,807,993
Product line cost of goods sold	871,250	1,434,565	1,696,873	3,494,011
Product line gross profit	1,058,664	1,779,404	2,066,717	4,313,982
Operating and Reportable Segments [Member] | Online Channels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	7,845,828	9,323,654	12,698,314	14,693,459
Product line cost of goods sold	3,709,482	3,766,735	5,842,292	5,792,064
Product line gross profit	4,136,346	5,556,919	6,856,022	8,901,395
Operating income (loss)	(346,102)	1,432,727	(955,647)	1,754,398
Depreciation and amortization	56,505	53,470	119,892	121,172
Capital expenditures	22,620	27,040	159,608	86,300
Operating and Reportable Segments [Member] | Online Channels [Member] | Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	7,123,440	8,452,535	11,527,029	12,939,493
Product line cost of goods sold	3,446,197	3,432,950	5,416,308	5,144,174
Product line gross profit	3,677,243	5,019,585	6,110,721	7,795,319
Operating and Reportable Segments [Member] | Online Channels [Member] | Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	722,388	871,119	1,171,285	1,753,966
Product line cost of goods sold	263,285	333,785	425,984	647,890
Product line gross profit	459,103	537,334	745,301	1,106,076
Operating and Reportable Segments [Member] | Traditional [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	2,520,294	4,429,481	5,041,890	9,339,987
Product line cost of goods sold	1,347,099	2,371,806	2,646,612	4,740,406
Product line gross profit	1,173,195	2,057,675	2,395,278	4,599,581
Operating income (loss)	(887,190)	17,868	(1,510,995)	645,530
Depreciation and amortization	114,684	60,528	189,008	117,038
Capital expenditures	164,263	350,545	457,675	689,405
Operating and Reportable Segments [Member] | Traditional [Member] | Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,312,768	2,086,631	2,449,585	3,285,960
Product line cost of goods sold	739,134	1,271,026	1,375,723	1,894,285
Product line gross profit	573,634	815,605	1,073,862	1,391,675
Operating and Reportable Segments [Member] | Traditional [Member] | Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,207,526	2,342,850	2,592,305	6,054,027
Product line cost of goods sold	607,965	1,100,780	1,270,889	2,846,121
Product line gross profit	$ 599,561	$ 1,242,070	$ 1,321,416	$ 3,207,906

SEGMENT INFORMATION AND GEOGR_4

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Cost of Goods Sold (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	$ 6,071,775	$ 7,033,946	$ 10,157,785	$ 12,050,496
Inventory write-downs			119,000	232,000
Product Line [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	5,056,581	6,138,541	8,488,904	10,532,470
Segment Reconciling Item [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Non-capitalized manufacturing and production control expenses	686,834	416,828	1,063,887	759,229
Freight out	358,617	465,207	634,354	682,712
Inventory write-downs	0	0	119,000	232,000
Other inventory adjustments	$ (30,257)	$ 13,370	$ (148,360)	$ (155,915)

SEGMENT INFORMATION AND GEOGR_5

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Net Sales by Geographic Area (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Net Sales by Geographic Area [Abstract]
Net sales	$ 10,366,122	$ 13,753,135	$ 17,740,204	$ 24,033,446
Reportable Geographical Component [Member] | United States [Member]
Net Sales by Geographic Area [Abstract]
Net sales	9,989,702	13,021,717	17,085,074	22,846,447
Reportable Geographical Component [Member] | International [Member]
Net Sales by Geographic Area [Abstract]
Net sales	$ 376,420	$ 731,418	$ 655,130	$ 1,186,999

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
FAIR VALUE MEASUREMENTS [Abstract]
Asset impairment	$ 0	$ 0	$ 0	$ 0

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	6 Months Ended
	Dec. 31, 2022	Jun. 30, 2022
Inventories [Abstract]
Total supplies inventory	$ 320,727	$ 89,120
Total inventory	34,995,047	33,512,800
Short-term portion	13,091,953	11,024,276
Long-term portion	21,903,094	22,488,524
Work-in-process inventories issued to active production jobs	$ 1,370,000	2,760,000
Percentage of jewel inventory not mounted in finished jewelry settings	50%
Finished Jewelry [Member]
Inventories [Abstract]
Raw materials	$ 1,427,479	1,697,361
Work-in-process	758,703	1,260,728
Finished goods	14,160,399	12,100,910
Finished goods on consignment	2,417,645	2,135,856
Total	18,764,226	17,194,855
Loose Jewels [Member]
Inventories [Abstract]
Raw materials	1,455,749	1,985,355
Work-in-process	8,720,482	8,485,713
Finished goods	5,473,592	5,454,266
Finished goods on consignment	260,271	303,491
Total	$ 15,910,094	$ 16,228,825

NOTE RECEIVABLE (Details)

NOTE RECEIVABLE (Details) - Convertible Promissory Note [Member] - USD ($)	Dec. 31, 2022	Mar. 05, 2021
Note Receivable [Abstract]
Note receivable		$ 250,000
Interest rate	0.14%
Interest rate during event of default	5%
Percentage of per unit price of units purchased by investors	80%
Value used to compute equity securities received upon conversion	$ 33,500,000

ACCRUED EXPENSES AND OTHER LI_3

ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($)	Dec. 31, 2022	Jun. 30, 2022
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Accrued compensation and related benefits	$ 453,917	$ 614,443
Deferred revenue	469,157	452,866
Accrued sales taxes and franchise taxes	266,773	341,706
Accrued cooperative advertising	208,330	137,467
Other accrued expenses	1	1
Total accrued expenses and other liabilities	$ 1,398,178	$ 1,546,483

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Jun. 30, 2022
INCOME TAXES [Abstract]
Average effective tax rate	20.46%	22.24%	20.46%	22.24%
Federal income tax rate	21%	21%	21%	21%
Blended state income tax rate	(0.54%)	1.24%	(0.54%)	1.24%
Effective tax rate			18.37%	16.92%
Income tax (benefit) expense	$ (131,937)	$ 283,473	$ (434,893)	$ 406,102
Deferred tax assets	$ 6,286,797		$ 6,286,797		$ 5,851,904

COMMITMENTS AND CONTINGENCIES,

COMMITMENTS AND CONTINGENCIES, Lease Arrangements (Details)		3 Months Ended		6 Months Ended
	Jan. 29, 2021 USD ($)	Dec. 31, 2022 USD ($) ft²	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($) ft²	Dec. 31, 2021 USD ($)	Jun. 30, 2022 USD ($)
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
Reimbursement for leasehold improvements		$ 506,000
Balance Sheet Classifications of Leases [Abstract]
Noncurrent operating lease ROU assets		2,488,052		$ 2,488,052		$ 2,787,419
Operating Lease Liabilities [Abstract]
Current operating lease liabilities		868,269		868,269		856,571
Noncurrent operating lease liabilities		2,453,994		2,453,994		2,846,805
Total operating lease liabilities		3,322,263		3,322,263
Operating lease cost		$ 175,000	$ 214,000	$ 349,000	$ 413,000
Assumed discount rate		2.81%		2.81%
Remaining operating lease term		3 years 9 months 29 days		3 years 9 months 29 days
Future Lease Payments Under Operating Leases [Abstract]
2023		$ 438,785		$ 438,785
2024		893,660		893,660
2025		918,236		918,236
2026		943,487		943,487
2027		317,327		317,327
Total lease payments		3,511,495		3,511,495
Less: imputed interest		189,232		189,232
Total operating lease liabilities		3,322,263		3,322,263
Less: current lease obligations		868,269		868,269		856,571
Total long-term lease obligations		2,453,994		2,453,994		$ 2,846,805
Cash paid for operating leases		$ 235,000	$ 8,000	$ 466,000	$ 170,000

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES, Purchase Commitments (Details) - SiC Materials [Member] $ in Thousands	6 Months Ended
	Dec. 31, 2022 USD ($) Option	Dec. 31, 2021 USD ($)
Purchase Commitments [Abstract]
Percentage of materials committed to be purchased	100%
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	24,750
Purchases	1,800	$ 3,000
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 (Details)

DEBT (Details) - USD ($)	1 Months Ended	6 Months Ended
	Jul. 27, 2022	Dec. 31, 2022
Line of Credit [Abstract]
Long-term debt		$ 0
JPMorgan Chase Credit Facility [Member]
Line of Credit [Abstract]
Borrowing capacity		5,000,000
Cash deposit		$ 5,050,000
Interest rate premium in excess of rate otherwise applicable charged during an event of default		3%
Credit facility outstanding		$ 0
JPMorgan Chase Credit Facility [Member] | SOFR Rate [Member]
Line of Credit [Abstract]
Basis spread on variable rate		1.25%
Interest rate adjustment		0.10%
JPMorgan Chase Credit Facility [Member] | LIBOR [Member]
Line of Credit [Abstract]
Basis spread on variable rate	1.25%

SHAREHOLDERS' EQUITY AND STOC_3

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Repurchases of Common Stock (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2022	Jun. 30, 2022	Apr. 29, 2022
Repurchases of Common Stock [Abstract]
Period over which common stock can be repurchased			3 years
Common stock, par value (in dollars per share)	$ 0		$ 0	$ 0
Repurchases of common stock (in shares)	0		358,116
Repurchases of common stock		$ 451,815	$ 451,815
Maximum [Member]
Repurchases of Common Stock [Abstract]
Authorized amount of common stock that can be repurchased					$ 5,000,000

SHAREHOLDERS' EQUITY AND STOC_4

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Dividends (Details)	6 Months Ended
	Dec. 31, 2022 USD ($)
Dividends [Abstract]
Cash dividends	$ 0

SHAREHOLDERS' EQUITY AND STOC_5

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock-Based Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Stock-Based Compensation [Abstract]
Employee stock options	$ 49,704	$ 57,448	$ 122,202	$ 127,014
Restricted stock awards	28,789	141,556	52,523	351,397
Totals	78,493	199,004	174,725	478,411
Stock-based compensation capitalized as a cost of inventory	$ 0	$ 0	$ 0	$ 0

SHAREHOLDERS' EQUITY AND STOC_6

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Option Activity (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Stock Option Activity [Roll Forward]
Outstanding, beginning balance (in shares)	1,658,803
Granted (in shares)	270,787
Forfeited (in shares)	(19,336)
Expired (in shares)	(2,664)
Outstanding, ending balance (in shares)	1,907,590
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 1.32
Granted (in dollars per share)	1.02
Forfeited (in dollars per share)	2
Expired (in dollars per share)	0.98
Outstanding, ending balance (in dollars per share)	1.27
Fair Value of Stock Options [Abstract]
Fair value of stock options (in dollars per share)	$ 0.59	$ 1.53
Fair value of stock options vested	$ 176	$ 166

SHAREHOLDERS' EQUITY AND STOC_7

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Options Outstanding (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Jun. 30, 2022
Stock Options Outstanding and Exercisable [Abstract]
Options outstanding, balance as of end of period (in shares)	1,907,590		1,658,803
Options outstanding, weighted average remaining contractual life	6 years 10 months 9 days
Options outstanding, weighted average exercise price (in dollars per share)	$ 1.27		$ 1.32
Options exercisable, balance as of end of period (in shares)	1,392,768
Options exercisable, weighted average remaining contractual life	5 years 11 months 19 days
Options exercisable, weighted average exercise price (in dollars per share)	$ 1.21
Options Vested or Expected to Vest [Abstract]
Options vested or expected to vest, balance as of end of period (in shares)	1,854,215
Options vested or expected to vest, weighted average remaining contractual life	6 years 9 months 18 days
Options vested or expected to vest, weighted average exercise price (in dollars per share)	$ 1.26
Unrecognized Stock-Based Compensation Expense [Abstract]
Unrecognized stock-based compensation expense	$ 322
Unrecognized stock-based compensation expense, period for recognition	20 months
Options outstanding, aggregate intrinsic value	$ 57	$ 3,040
Options exercisable, aggregate intrinsic value	57	3,040
Options vested or expected to vest, aggregate intrinsic value	$ 57	3,040
Exercised (in shares)	0
Options exercised, aggregate intrinsic value		717
Tax benefit associated with stock options exercised		$ 76

SHAREHOLDERS' EQUITY AND STOC_8

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Restricted Stock Activity (Details) - Restricted Stock [Member] $ / shares in Units, $ in Thousands	6 Months Ended
	Dec. 31, 2022 USD ($) $ / shares shares
Restricted Stock Activity [Roll Forward]
Unvested, beginning balance (in shares) | shares	178,750
Granted (in shares) | shares	178,750
Vested (in shares) | shares	(134,063)
Canceled (in shares) | shares	(44,687)
Unvested, ending balance (in shares) | shares	178,750
Weighted Average Grant Date Fair Value [Roll Forward]
Unvested, beginning balance (in dollars per share) | $ / shares	$ 2.75
Granted (in dollars per share) | $ / shares	0.97
Vested (in dollars per share) | $ / shares	2.75
Canceled (in dollars per share) | $ / shares	2.75
Unvested, ending balance (in dollars per share) | $ / shares	$ 0.97
Unrecognized Stock-Based Compensation Expense [Abstract]
Unrecognized stock-based compensation expense | $	$ 144
Unrecognized stock-based compensation expense, period for recognition	7 months

NET (LOSS) INCOME PER COMMON _3

NET (LOSS) INCOME PER COMMON SHARE (Details) - USD ($)	3 Months Ended				6 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2022	Dec. 31, 2021
Numerator [Abstract]
Net (loss) income	$ (1,041,781)	$ (890,192)	$ 1,167,612	$ 827,025	$ (1,931,973)	$ 1,994,637
Denominator [Abstract]
Weighted average common shares outstanding, Basic (in shares)	30,344,954		30,287,677		30,408,018	30,159,543
Effect of dilutive securities (in shares)	0		1,027,811		0	1,078,405
Weighted average common shares outstanding, Diluted (in shares)	30,344,954		31,315,488		30,408,018	31,237,948
Net (Loss) Income Per Common Share [Abstract]
Basic (in dollars per share)	$ (0.03)		$ 0.04		$ (0.06)	$ 0.07
Diluted (in dollars per share)	$ (0.03)		$ 0.04		$ (0.06)	$ 0.06
Stock Options [Member]
Net Income per Common Share [Abstract]
Shares excluded from the computation of diluted net income per common share (in shares)	1,910,000		836,000		1,910,000	786,000
Restricted Stock [Member]
Net Income per Common Share [Abstract]
Unvested restricted stock outstanding (in shares)	179		179		179	179

MAJOR CUSTOMERS AND CONCENTRA_3

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details)	3 Months Ended				6 Months Ended			12 Months Ended
	Dec. 31, 2022		Dec. 31, 2021		Dec. 31, 2022		Dec. 31, 2021	Jun. 30, 2022
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
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage					20%			20%
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage					20%				[1]
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage						[2]		29%
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer D [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage						[2]		13%
Total Net Sales [Member] | Customer Concentration Risk [Member] | Customer A [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage	12%		16%		14%		15%
Total Net Sales [Member] | Customer Concentration Risk [Member] | Customer C [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage		[3]		[3]		[3]	11%
[1]Customer B did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2022.[2]Customer C and Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of December 31, 2022.[3]Customer C did not have net sales that represented 10% or more of total net sales for the three months ended December 31, 2022 and 2021 and the six months ended December 31, 2022.