Charles & Colvard (CTHR) 10-Q 4 May 23 2023 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2023	Apr. 28, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
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 ($)	Mar. 31, 2023	Jun. 30, 2022
Current assets:
Cash and cash equivalents	$ 10,914,584	$ 15,668,361
Restricted cash	5,056,044	5,510,979
Accounts receivable, net	933,553	2,220,816
Inventory, net	7,889,917	11,024,276
Note receivable	0	250,000
Prepaid expenses and other assets	883,814	1,190,012
Total current assets	25,677,912	35,864,444
Long-term assets:
Inventory, net	25,439,369	22,488,524
Property and equipment, net	2,317,738	1,901,176
Intangible assets, net	301,310	265,730
Operating lease right-of-use assets	2,336,334	2,787,419
Deferred income taxes, net	0	5,851,904
Note receivable	250,000	0
Other assets	50,387	49,658
Total long-term assets	30,695,138	33,344,411
TOTAL ASSETS	56,373,050	69,208,855
Current liabilities:
Accounts payable	3,116,810	4,401,229
Operating lease liabilities, current portion	874,177	856,571
Accrued expenses and other liabilities	1,143,192	1,546,483
Total current liabilities	5,134,179	6,804,283
Long-term liabilities:
Noncurrent operating lease liabilities	2,251,581	2,846,805
Total long-term liabilities	2,251,581	2,846,805
Total liabilities	7,385,760	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 March 31, 2023 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	26,165,810	25,956,491
Treasury stock, at cost, 388,403 shares and 30,287 shares at March 31, 2023 and June 30, 2022, respectively	(489,979)	(38,164)
Accumulated deficit	(33,930,752)	(23,602,771)
Total shareholders' equity	48,987,290	59,557,767
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 56,373,050	$ 69,208,855

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	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		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 6,641,799	$ 9,751,835	$ 24,382,003	$ 33,785,281
Costs and expenses:
Cost of goods sold	4,493,125	5,296,530	14,650,910	17,347,026
Sales and marketing	3,267,436	2,932,587	10,715,066	9,741,774
General and administrative	1,053,357	1,106,850	3,654,788	3,880,684
Total costs and expenses	8,813,918	9,335,967	29,020,764	30,969,484
(Loss) Income from operations	(2,172,119)	415,868	(4,638,761)	2,815,797
Other income (expense):
Interest income	69,159	1,120	168,935	1,964
Loss on foreign currency exchange	0	0	0	(34)
Total other income (expense), net	69,159	1,120	168,935	1,930
(Loss) Income before income taxes	(2,102,960)	416,988	(4,469,826)	2,817,727
Income tax expense	(6,293,048)	(78,480)	(5,858,155)	(484,582)
Net (loss) income	$ (8,396,008)	$ 338,508	$ (10,327,981)	$ 2,333,145
Net (loss) income per common share:
Basic (in dollars per share)	$ (0.28)	$ 0.01	$ (0.34)	$ 0.08
Diluted (in dollars per share)	$ (0.28)	$ 0.01	$ (0.34)	$ 0.07
Weighted average number of shares used in computing net (loss) income per common share:
Basic (in shares)	30,344,954	30,484,897	30,387,303	30,286,195
Diluted (in shares)	30,344,954	31,268,410	30,387,303	31,271,677

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					$ 2,333,145
Balance at Mar. 31, 2022	57,066,143	25,927,410	0	(23,643,541)	$ 59,350,012
Balance (in shares) at Mar. 31, 2022					30,688,796
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
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	198,523	0	0	$ 198,523
Stock option exercises	$ 164,045	(59,046)	0	0	104,999
Stock option exercises (in shares)	93,749
Net (loss) income	$ 0	0	0	338,508	338,508
Balance at Mar. 31, 2022	57,066,143	25,927,410	0	(23,643,541)	$ 59,350,012
Balance (in shares) at Mar. 31, 2022					30,688,796
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					$ (10,327,981)
Balance at Mar. 31, 2023	57,242,211	26,165,810	(489,979)	(33,930,752)	$ 48,987,290
Balance (in shares) at Mar. 31, 2023					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
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
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	34,594	0	0	$ 34,594
Repurchases of common stock (in shares)					0
Net (loss) income	0	0	0	(8,396,008)	$ (8,396,008)
Balance at Mar. 31, 2023	$ 57,242,211	$ 26,165,810	$ (489,979)	$ (33,930,752)	$ 48,987,290
Balance (in shares) at Mar. 31, 2023					30,523,705

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (10,327,981)	$ 2,333,145
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	477,285	350,198
Stock-based compensation	209,319	676,934
(Recovery of) Provision for uncollectible accounts	(18,000)	26,000
Provision for (Recovery of) sales returns	59,000	(25,000)
Inventory write-downs	119,000	232,000
Provision for accounts receivable discounts	42	3,269
Deferred income taxes	5,851,904	483,168
Changes in operating assets and liabilities:
Accounts receivable	1,246,221	92,264
Inventory	64,514	(3,562,704)
Prepaid expenses and other assets, net	756,554	640,843
Accounts payable	(1,284,419)	356,311
Accrued income taxes	0	1,414
Accrued expenses and other liabilities	(980,909)	(504,862)
Net cash (used in) provided by operating activities	(3,827,470)	1,102,980
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(884,030)	(1,250,296)
Payments for intangible assets	(45,397)	(38,867)
Net cash used in investing activities	(929,427)	(1,289,163)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock	(451,815)	0
Stock option exercises	0	650,917
Net cash (used in) provided by financing activities	(451,815)	650,917
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(5,208,712)	464,734
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	21,179,340	21,446,951
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	15,970,628	21,911,685
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes	$ 5,900	$ 0

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	9 Months Ended
	Mar. 31, 2023
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	9 Months Ended
	Mar. 31, 2023
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 nine months ended March 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2023 (“Fiscal 2023”). The condensed consolidated financial statements as of March 31, 2023 and for the three and nine months ended March 31, 2023 and 2022 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 March 31, 2023, for the three and nine months ended March 31, 2023 and 2022, 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 nine-month periods ended March 31, 2023 or 2022. 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 March 31, 2023 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: March 31, 2023 June 30, 2022 Cash and cash equivalents $ 10,914,584 $ 15,668,361 Restricted cash 5,056,044 5,510,979 Total cash, cash equivalents, and restricted cash $ 15,970,628 $ 21,179,340

SEGMENT INFORMATION AND GEOGRAP

SEGMENT INFORMATION AND GEOGRAPHIC DATA	9 Months Ended
	Mar. 31, 2023
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 for the periods presented is as follows: Three Months Ended March 31, 2023 Online Channels Traditional Total Net sales Finished jewelry $ 4,130,314 $ 1,190,987 $ 5,321,301 Loose jewels 486,084 834,414 1,320,498 Total $ 4,616,398 $ 2,025,401 $ 6,641,799 Product line cost of goods sold Finished jewelry $ 1,880,504 $ 959,817 $ 2,840,321 Loose jewels 197,145 448,114 645,259 Total $ 2,077,649 $ 1,407,931 $ 3,485,580 Product line gross profit Finished jewelry $ 2,249,810 $ 231,170 $ 2,480,980 Loose jewels 288,939 386,300 675,239 Total $ 2,538,749 $ 617,470 $ 3,156,219 Operating loss $ (999,028 ) $ (1,173,091 ) $ (2,172,119 ) Depreciation and amortization $ 47,876 $ 120,509 $ 168,385 Capital expenditures $ 14,202 $ 252,545 $ 266,747 Three Months Ended March 31, 2022 Online Channels Traditional Total Net sales Finished jewelry $ 5,720,197 $ 1,700,394 $ 7,420,591 Loose jewels 634,617 1,696,627 2,331,244 Total $ 6,354,814 $ 3,397,021 $ 9,751,835 Product line cost of goods sold Finished jewelry $ 2,560,952 $ 1,148,912 $ 3,709,864 Loose jewels 229,714 784,272 1,013,986 Total $ 2,790,666 $ 1,933,184 $ 4,723,850 Product line gross profit Finished jewelry $ 3,159,245 $ 551,482 $ 3,710,727 Loose jewels 404,903 912,355 1,317,258 Total $ 3,564,148 $ 1,463,837 $ 5,027,985 Operating income $ 350,276 $ 65,592 $ 415,868 Depreciation and amortization $ 52,613 $ 59,374 $ 111,987 Capital expenditures $ 28,145 $ 446,445 $ 474,590 Nine Months Ended March 31, 2023 Online Channels Traditional Total Net sales Finished jewelry $ 15,657,343 $ 3,640,572 $ 19,297,915 Loose jewels 1,657,369 3,426,719 5,084,088 Total $ 17,314,712 $ 7,067,291 $ 24,382,003 Product line cost of goods sold Finished jewelry $ 7,296,812 $ 2,335,540 $ 9,632,352 Loose jewels 623,129 1,719,004 2,342,133 Total $ 7,919,941 $ 4,054,544 $ 11,974,485 Product line gross profit Finished jewelry $ 8,360,531 $ 1,305,032 $ 9,665,563 Loose jewels 1,034,240 1,707,715 2,741,955 Total $ 9,394,771 $ 3,012,747 $ 12,407,518 Operating income $ (1,954,975 ) $ (2,683,786 ) $ (4,638,761 ) Depreciation and amortization $ 167,769 $ 309,516 $ 477,285 Capital expenditures $ 173,810 $ 710,220 $ 884,030 Nine Months Ended March 31, 2022 Online Channels Traditional Total Net sales Finished jewelry $ 18,659,690 $ 4,986,354 $ 23,646,044 Loose jewels 2,388,584 7,750,653 10,139,237 Total $ 21,048,274 $ 12,737,007 $ 33,785,281 Product line cost of goods sold Finished jewelry $ 7,705,127 $ 3,043,196 $ 10,748,323 Loose jewels 877,604 3,630,393 4,507,997 Total $ 8,582,731 $ 6,673,589 $ 15,256,320 Product line gross profit Finished jewelry $ 10,954,563 $ 1,943,158 $ 12,897,721 Loose jewels 1,510,980 4,120,260 5,631,240 Total $ 12,465,543 $ 6,063,418 $ 18,528,961 Operating income $ 2,104,674 $ 711,123 $ 2,815,797 Depreciation and amortization $ 173,786 $ 176,412 $ 350,198 Capital expenditures $ 114,445 $ 1,135,851 $ 1,250,296 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, 2023 2022 2023 2022 Product line cost of goods sold $ 3,485,580 $ 4,723,850 $ 11,974,485 $ 15,256,320 Non-capitalized manufacturing and production control expenses 596,344 484,299 1,660,231 1,243,528 Freight out 216,817 294,143 851,171 976,855 Inventory write-downs - - 119,000 232,000 Other inventory adjustments 194,384 (205,762 ) 46,023 (361,677 ) Cost of goods sold $ 4,493,125 $ 5,296,530 $ 14,650,910 $ 17,347,026 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, 2023 2022 2023 2022 Net sales United States $ 6,545,336 $ 9,390,774 $ 23,630,410 $ 32,237,221 International 96,463 361,061 751,593 1,548,060 Total $ 6,641,799 $ 9,751,835 $ 24,382,003 $ 33,785,281

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
	Mar. 31, 2023
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 nine months ended March 31, 2023 and 2022, no impairment was recorded.

INVENTORIES

INVENTORIES	9 Months Ended
	Mar. 31, 2023
INVENTORIES [Abstract]
INVENTORIES	5. INVENTORIES The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: March 31, 2023 June 30, 2022 Finished jewelry: Raw materials $ 1,359,919 $ 1,697,361 Work-in-process 716,494 1,260,728 Finished goods 13,045,604 12,100,910 Finished goods on consignment 2,266,501 2,135,856 Total finished jewelry $ 17,388,518 $ 17,194,855 Loose jewels: Raw materials $ 812,024 $ 1,985,355 Work-in-process 8,980,285 8,485,713 Finished goods 5,519,936 5,454,266 Finished goods on consignment 251,693 303,491 Total loose jewels 15,563,938 16,228,825 Total supplies inventory 376,830 89,120 Total inventory $ 33,329,286 $ 33,512,800 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: March 31, 2023 June 30, 2022 Short-term portion $ 7,889,917 $ 11,024,276 Long-term portion 25,439,369 22,488,524 Total $ 33,329,286 $ 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 March 31, 2023 and June 30, 2022, work-in-process inventories issued to active production jobs approximated $1.41 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	9 Months Ended
	Mar. 31, 2023
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	9 Months Ended
	Mar. 31, 2023
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
ACCRUED EXPENSES AND OTHER LIABILITIES	7. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following as of the dates presented: March 31, 2023 June 30, 2022 Deferred revenue $ 434,132 $ 452,866 Accrued compensation and related benefits 275,465 614,443 Accrued sales taxes and franchise taxes 233,351 341,706 Accrued cooperative advertising 200,243 137,467 Other accrued expenses 1 1 Total accrued expenses and other liabilities $ 1,143,192 $ 1,546,483

INCOME TAXES

INCOME TAXES	9 Months Ended
	Mar. 31, 2023
INCOME TAXES [Abstract]
INCOME TAXES	8. INCOME TAXES 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. During the three months ended March 31, 2023, management determined that due to the worsening global macro-economic conditions and heightened levels of inflation, including fears of recession, coupled with the effects from worldwide political unrest and the ongoing economic impact from the COVID pandemic, the risks associated with these conditions led management to conclude that it was not more likely than not the Company would have sufficient future taxable income to utilize its deferred tax assets. Additionally, the Company’s management determined that the positive evidence was no longer sufficient to offset available negative evidence, primarily as a result of the pre-tax operating losses incurred during the three- and nine-month periods ended March 31, 2023. Consequently, management established a full valuation allowance against the Company’s deferred tax assets, resulting in an income tax expense of approximately $6.29 million and $5.86 million for the three and nine months ended March 31, 2023, respectively. The Company recognized an income tax expense of approximately $78,000 and $485,000 for the three and nine months ended March 31, 2022, respectively. 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. Driven by the establishment of the valuation allowance during the quarter ended March 31, 2023, the Company’s effective tax rate for the nine month-period then ended was a negative 131.06%. For the nine months ended March 31, 2022, the Company’s effective tax rate was 17.20%.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Mar. 31, 2023
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 March 31, 2023, 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 March 31, 2023, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 2,336,334 Current operating lease liabilities $ 874,177 Noncurrent operating lease liabilities 2,251,581 Total operating lease liabilities $ 3,125,758 The Company’s total operating lease cost was approximately $193,000 for each of the three months ended March 31, 2023 and 2022. The Company’s total operating lease cost was approximately $578,000 and $596,000 for the nine months ended March 31, 2023 and 2022, respectively. 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 3.58 years. As of March 31, 2023, Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2023 $ 219,393 2024 893,660 2025 918,236 2026 943,487 2027 317,327 Total lease payments 3,292,103 Less: imputed interest 166,345 Present value of lease payments 3,125,758 Less: current lease liability 874,177 Total long-term lease liability $ 2,251,581 The Company makes cash payments for amounts included in the measurement of its lease liabilities. During the three months ended March 31, 2023 and 2022, cash paid for operating leases was approximately $237,000 and $160,000, respectively. During the nine months ended March 31, 2023 and 2022, cash paid for operating leases was approximately $704,000 and $330,000, 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 March 31, 2023. 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 nine months ended March 31, 2023 and 2022, the Company purchased approximately $1.80 million and $4.49 million, respectively, of SiC crystals from Wolfspeed pursuant to the terms of the Supply Agreement, as amended. The Company has made no purchases of SiC crystals during the six-month period ended March 31, 2023 while currently in discussions regarding the terms of the Supply Agreement. 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 nine months of 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 adverse impact from inflation on its financial results in the first nine 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	9 Months Ended
	Mar. 31, 2023
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 3.00% 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 March 31, 2023, 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	9 Months Ended
	Mar. 31, 2023
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 nine-month period ended March 31, 2023, 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 March 31, 2023. Dividends The Company has paid no cash dividends during the current fiscal year through March 31, 2023.
STOCK-BASED COMPENSATION	Stock-Based Compensation The following table summarizes the components of the Company’s stock-based compensation included in net income for the periods presented: Three Months Ended March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Employee stock options $ 63,383 $ 60,045 $ 185,585 $ 187,059 Restricted stock awards (28,789 ) 138,478 23,734 489,875 Totals $ 34,594 $ 198,523 $ 209,319 $ 676,934 No stock-based compensation was capitalized as a cost of inventory during the three and nine months ended March 31, 2023 and 2022. Stock Options – The following is a summary of the stock option activity for the nine months ended March 31, 2023: Shares Weighted Average Exercise Price Outstanding, June 30, 2022 1,658,803 $ 1.32 Granted 270,787 $ 1.02 Forfeited (22,004 ) $ 2.01 Expired (3,663 ) $ 1.01 Outstanding, March 31, 2023 1,903,923 $ 1.27 T he weighted average grant date fair value of stock options granted during the nine months ended March 31, 2023 and 2022 was approximately $0.59 and $1.37, respectively. The total fair value of stock options that vested during the nine months ended March 31, 2023 and 2022 The following table summarizes information about stock options outstanding at March 31, 2023: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of March 31, 2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of March 31, 2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of March 31, 2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 1,903,923 6.61 $ 1.27 1,440,913 5.81 $ 1.24 1,859,855 6.56 $ 1.26 As of March 31, 2023, the unrecognized stock-based compensation expense related to unvested stock options was approximately $256,000, which is expected to be recognized over a weighted average period of approximately 18 months. The aggregate intrinsic value of stock options outstanding, exercisable, and vested or expected to vest at March 31, 2023 and 2022 was approximately $101,000 and $973,000, respectively. These amounts are before applicable income taxes and represent the closing market price of the Company’s common stock at March 31, 2023 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. Restricted Stock The following is a summary of the restricted stock activity for the nine months ended March 31, 2023: 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, March 31, 2023 178,750 $ 0.97 The unvested restricted shares as of March 31, 2023 are all performance-based restricted shares and were scheduled to vest, subject to achievement of the underlying performance goals, in July 2023. However, during the quarter ended March 31, 2023, it was determined that none of the underlying performance-based targets related to the unvested restricted shares would be achieved for Fiscal 2023 and management concluded that none of the restricted shares would vest. Accordingly, the underlying expected forfeiture rates were adjusted to reflect the change in estimate. In addition, the benefit in stock-based compensation expense from the reversal of previously recorded stock-based compensation on these performance-based awards four months .

NET (LOSS) INCOME PER COMMON SH

NET (LOSS) INCOME PER COMMON SHARE	9 Months Ended
	Mar. 31, 2023
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 March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Numerator: Net (loss)income $ (8,396,008 ) $ 338,508 $ (10,327,981 ) $ 2,333,145 Denominator: Weighted average common shares outstanding: Basic 30,344,954 30,484,897 30,387,303 30,286,195 Effect of dilutive securities - 783,513 - 985,482 Diluted 30,344,954 31,268,410 30,387,303 31,271,677 Net (loss) income per common share: Basic $ (0.28 ) $ 0.01 $ (0.34 ) $ 0.08 Diluted $ (0.28 ) $ 0.01 $ (0.34 ) $ 0.07 For the three and nine months ended March 31, 2023, stock options to purchase approximately 1.90 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 nine months ended March 31, 2022, stock options to purchase approximately 975,000 shares and 773,000 shares, respectively,

MAJOR CUSTOMERS AND CONCENTRATI

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	9 Months Ended
	Mar. 31, 2023
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: March 31, 2023 June 30, 2022 Customer A 24 % 20 % Customer B 18 % 29 % Customer C 15 % ** % Customer D * % 13 % * Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of March 31, 2023. ** Customer C 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 greater than or equal to 10% of total net sales for the periods presented: Three Months Ended March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Customer A 13 % 13 % 14 % 15 %

SUBSEQUENT EVENT

SUBSEQUENT EVENT	9 Months Ended
	Mar. 31, 2023
SUBSEQUENT EVENT [Abstract]
SUBSEQUENT EVENT	14. SUBSEQUENT EVENT As previously disclosed, on December 19, 2022, management received notice from Nasdaq’s Listing Qualifications Department indicating that the Company was not in compliance with Nasdaq’s listing requirements because the minimum bid price of its common stock on The Nasdaq Capital Market had closed below $1.00 per share for 30 consecutive business days. In accordance with the Nasdaq’s listing requirements, the Company had 180 calendar days, or until June 19, 2023, to regain compliance with the minimum $1.00 bid price per share requirement. On April 20, 2023, the Company’s management received a letter from the Nasdaq Listing Qualifications Department notifying the Company that the minimum bid price of its common stock was $1.00 per share or greater for at least the last 10 consecutive business days. Accordingly, the Company has regained compliance with the Nasdaq minimum bid price requirement and the matter is now closed.

BASIS OF PRESENTATION AND SIG_2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Mar. 31, 2023
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 nine months ended March 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2023 (“Fiscal 2023”). The condensed consolidated financial statements as of March 31, 2023 and for the three and nine months ended March 31, 2023 and 2022 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 March 31, 2023, for the three and nine months ended March 31, 2023 and 2022, 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 nine-month periods ended March 31, 2023 or 2022. 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 March 31, 2023 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: March 31, 2023 June 30, 2022 Cash and cash equivalents $ 10,914,584 $ 15,668,361 Restricted cash 5,056,044 5,510,979 Total cash, cash equivalents, and restricted cash $ 15,970,628 $ 21,179,340
Reclassification	Reclassification – Certain amounts in the Company’s condensed consolidated financial statements as of June 30, 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 tax 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 nine months ended March 31, 2023 and 2022 and as of June 30, 2022.

BASIS OF PRESENTATION AND SIG_3

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Mar. 31, 2023
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: March 31, 2023 June 30, 2022 Cash and cash equivalents $ 10,914,584 $ 15,668,361 Restricted cash 5,056,044 5,510,979 Total cash, cash equivalents, and restricted cash $ 15,970,628 $ 21,179,340

SEGMENT INFORMATION AND GEOGR_2

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)	9 Months Ended
	Mar. 31, 2023
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Summary Financial Information by Reportable Segment	Summary financial information by reportable segment for the periods presented is as follows: Three Months Ended March 31, 2023 Online Channels Traditional Total Net sales Finished jewelry $ 4,130,314 $ 1,190,987 $ 5,321,301 Loose jewels 486,084 834,414 1,320,498 Total $ 4,616,398 $ 2,025,401 $ 6,641,799 Product line cost of goods sold Finished jewelry $ 1,880,504 $ 959,817 $ 2,840,321 Loose jewels 197,145 448,114 645,259 Total $ 2,077,649 $ 1,407,931 $ 3,485,580 Product line gross profit Finished jewelry $ 2,249,810 $ 231,170 $ 2,480,980 Loose jewels 288,939 386,300 675,239 Total $ 2,538,749 $ 617,470 $ 3,156,219 Operating loss $ (999,028 ) $ (1,173,091 ) $ (2,172,119 ) Depreciation and amortization $ 47,876 $ 120,509 $ 168,385 Capital expenditures $ 14,202 $ 252,545 $ 266,747 Three Months Ended March 31, 2022 Online Channels Traditional Total Net sales Finished jewelry $ 5,720,197 $ 1,700,394 $ 7,420,591 Loose jewels 634,617 1,696,627 2,331,244 Total $ 6,354,814 $ 3,397,021 $ 9,751,835 Product line cost of goods sold Finished jewelry $ 2,560,952 $ 1,148,912 $ 3,709,864 Loose jewels 229,714 784,272 1,013,986 Total $ 2,790,666 $ 1,933,184 $ 4,723,850 Product line gross profit Finished jewelry $ 3,159,245 $ 551,482 $ 3,710,727 Loose jewels 404,903 912,355 1,317,258 Total $ 3,564,148 $ 1,463,837 $ 5,027,985 Operating income $ 350,276 $ 65,592 $ 415,868 Depreciation and amortization $ 52,613 $ 59,374 $ 111,987 Capital expenditures $ 28,145 $ 446,445 $ 474,590 Nine Months Ended March 31, 2023 Online Channels Traditional Total Net sales Finished jewelry $ 15,657,343 $ 3,640,572 $ 19,297,915 Loose jewels 1,657,369 3,426,719 5,084,088 Total $ 17,314,712 $ 7,067,291 $ 24,382,003 Product line cost of goods sold Finished jewelry $ 7,296,812 $ 2,335,540 $ 9,632,352 Loose jewels 623,129 1,719,004 2,342,133 Total $ 7,919,941 $ 4,054,544 $ 11,974,485 Product line gross profit Finished jewelry $ 8,360,531 $ 1,305,032 $ 9,665,563 Loose jewels 1,034,240 1,707,715 2,741,955 Total $ 9,394,771 $ 3,012,747 $ 12,407,518 Operating income $ (1,954,975 ) $ (2,683,786 ) $ (4,638,761 ) Depreciation and amortization $ 167,769 $ 309,516 $ 477,285 Capital expenditures $ 173,810 $ 710,220 $ 884,030 Nine Months Ended March 31, 2022 Online Channels Traditional Total Net sales Finished jewelry $ 18,659,690 $ 4,986,354 $ 23,646,044 Loose jewels 2,388,584 7,750,653 10,139,237 Total $ 21,048,274 $ 12,737,007 $ 33,785,281 Product line cost of goods sold Finished jewelry $ 7,705,127 $ 3,043,196 $ 10,748,323 Loose jewels 877,604 3,630,393 4,507,997 Total $ 8,582,731 $ 6,673,589 $ 15,256,320 Product line gross profit Finished jewelry $ 10,954,563 $ 1,943,158 $ 12,897,721 Loose jewels 1,510,980 4,120,260 5,631,240 Total $ 12,465,543 $ 6,063,418 $ 18,528,961 Operating income $ 2,104,674 $ 711,123 $ 2,815,797 Depreciation and amortization $ 173,786 $ 176,412 $ 350,198 Capital expenditures $ 114,445 $ 1,135,851 $ 1,250,296
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 March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Product line cost of goods sold $ 3,485,580 $ 4,723,850 $ 11,974,485 $ 15,256,320 Non-capitalized manufacturing and production control expenses 596,344 484,299 1,660,231 1,243,528 Freight out 216,817 294,143 851,171 976,855 Inventory write-downs - - 119,000 232,000 Other inventory adjustments 194,384 (205,762 ) 46,023 (361,677 ) Cost of goods sold $ 4,493,125 $ 5,296,530 $ 14,650,910 $ 17,347,026
Net Sales by Geographic Area	The following presents net sales by geographic area: Three Months Ended March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Net sales United States $ 6,545,336 $ 9,390,774 $ 23,630,410 $ 32,237,221 International 96,463 361,061 751,593 1,548,060 Total $ 6,641,799 $ 9,751,835 $ 24,382,003 $ 33,785,281

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Mar. 31, 2023
INVENTORIES [Abstract]
Inventories	The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: March 31, 2023 June 30, 2022 Finished jewelry: Raw materials $ 1,359,919 $ 1,697,361 Work-in-process 716,494 1,260,728 Finished goods 13,045,604 12,100,910 Finished goods on consignment 2,266,501 2,135,856 Total finished jewelry $ 17,388,518 $ 17,194,855 Loose jewels: Raw materials $ 812,024 $ 1,985,355 Work-in-process 8,980,285 8,485,713 Finished goods 5,519,936 5,454,266 Finished goods on consignment 251,693 303,491 Total loose jewels 15,563,938 16,228,825 Total supplies inventory 376,830 89,120 Total inventory $ 33,329,286 $ 33,512,800 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: March 31, 2023 June 30, 2022 Short-term portion $ 7,889,917 $ 11,024,276 Long-term portion 25,439,369 22,488,524 Total $ 33,329,286 $ 33,512,800

ACCRUED EXPENSES AND OTHER LI_2

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)	9 Months Ended
	Mar. 31, 2023
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Accrued Expenses and Other Liabilities	Accrued expenses and other liabilities consist of the following as of the dates presented: March 31, 2023 June 30, 2022 Deferred revenue $ 434,132 $ 452,866 Accrued compensation and related benefits 275,465 614,443 Accrued sales taxes and franchise taxes 233,351 341,706 Accrued cooperative advertising 200,243 137,467 Other accrued expenses 1 1 Total accrued expenses and other liabilities $ 1,143,192 $ 1,546,483

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Mar. 31, 2023
COMMITMENTS AND CONTINGENCIES [Abstract]
Balance Sheet Classifications of Leases	As of March 31, 2023, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 2,336,334 Current operating lease liabilities $ 874,177 Noncurrent operating lease liabilities 2,251,581 Total operating lease liabilities $ 3,125,758
Remaining Future Payments Under Operating Leases	As of March 31, 2023, Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2023 $ 219,393 2024 893,660 2025 918,236 2026 943,487 2027 317,327 Total lease payments 3,292,103 Less: imputed interest 166,345 Present value of lease payments 3,125,758 Less: current lease liability 874,177 Total long-term lease liability $ 2,251,581

SHAREHOLDERS' EQUITY AND STOC_2

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)	9 Months Ended
	Mar. 31, 2023
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 March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Employee stock options $ 63,383 $ 60,045 $ 185,585 $ 187,059 Restricted stock awards (28,789 ) 138,478 23,734 489,875 Totals $ 34,594 $ 198,523 $ 209,319 $ 676,934
Stock Option Activity	Stock Options – The following is a summary of the stock option activity for the nine months ended March 31, 2023: Shares Weighted Average Exercise Price Outstanding, June 30, 2022 1,658,803 $ 1.32 Granted 270,787 $ 1.02 Forfeited (22,004 ) $ 2.01 Expired (3,663 ) $ 1.01 Outstanding, March 31, 2023 1,903,923 $ 1.27
Stock Options Outstanding	The following table summarizes information about stock options outstanding at March 31, 2023: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of March 31, 2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of March 31, 2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of March 31, 2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 1,903,923 6.61 $ 1.27 1,440,913 5.81 $ 1.24 1,859,855 6.56 $ 1.26
Restricted Stock Activity	The following is a summary of the restricted stock activity for the nine months ended March 31, 2023: 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, March 31, 2023 178,750 $ 0.97

NET (LOSS) INCOME PER COMMON _2

NET (LOSS) INCOME PER COMMON SHARE (Tables)	9 Months Ended
	Mar. 31, 2023
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 March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Numerator: Net (loss)income $ (8,396,008 ) $ 338,508 $ (10,327,981 ) $ 2,333,145 Denominator: Weighted average common shares outstanding: Basic 30,344,954 30,484,897 30,387,303 30,286,195 Effect of dilutive securities - 783,513 - 985,482 Diluted 30,344,954 31,268,410 30,387,303 31,271,677 Net (loss) income per common share: Basic $ (0.28 ) $ 0.01 $ (0.34 ) $ 0.08 Diluted $ (0.28 ) $ 0.01 $ (0.34 ) $ 0.07

MAJOR CUSTOMERS AND CONCENTRA_2

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)	9 Months Ended
	Mar. 31, 2023
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: March 31, 2023 June 30, 2022 Customer A 24 % 20 % Customer B 18 % 29 % Customer C 15 % ** % Customer D * % 13 % * Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of March 31, 2023. ** Customer C 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 greater than or equal to 10% of total net sales for the periods presented: Three Months Ended March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Customer A 13 % 13 % 14 % 15 %

BASIS OF PRESENTATION AND SIG_4

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021
Restricted Cash [Abstract]
Funded liquid margin account	$ 30	$ 461,000
Cash, Cash Equivalents and Restricted Cash [Abstract]
Cash and cash equivalents	10,914,584	15,668,361
Restricted cash	5,056,044	5,510,979
Total cash, cash equivalents, and restricted cash	15,970,628	$ 21,179,340	$ 21,911,685	$ 21,446,951
JPMorgan Chase Credit Facility [Member]
Restricted Cash [Abstract]
Borrowing capacity	5,000,000
Cash deposit	$ 5,050,000

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, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($) Segment	Mar. 31, 2022 USD ($)
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	$ 6,641,799	$ 9,751,835	$ 24,382,003	$ 33,785,281
Product line cost of goods sold	4,493,125	5,296,530	14,650,910	17,347,026
Operating income (loss)	(2,172,119)	415,868	(4,638,761)	2,815,797
Depreciation and amortization	168,385	111,987	477,285	350,198
Capital expenditures	266,747	474,590	884,030	1,250,296
Product Line [Member]
Summary Information by Reportable Segment [Abstract]
Product line cost of goods sold	3,485,580	4,723,850	11,974,485	15,256,320
Product line gross profit	3,156,219	5,027,985	12,407,518	18,528,961
Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	5,321,301	7,420,591	19,297,915	23,646,044
Product line cost of goods sold	2,840,321	3,709,864	9,632,352	10,748,323
Product line gross profit	2,480,980	3,710,727	9,665,563	12,897,721
Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,320,498	2,331,244	5,084,088	10,139,237
Product line cost of goods sold	645,259	1,013,986	2,342,133	4,507,997
Product line gross profit	675,239	1,317,258	2,741,955	5,631,240
Operating and Reportable Segments [Member] | Online Channels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	4,616,398	6,354,814	17,314,712	21,048,274
Product line cost of goods sold	2,077,649	2,790,666	7,919,941	8,582,731
Product line gross profit	2,538,749	3,564,148	9,394,771	12,465,543
Operating income (loss)	(999,028)	350,276	(1,954,975)	2,104,674
Depreciation and amortization	47,876	52,613	167,769	173,786
Capital expenditures	14,202	28,145	173,810	114,445
Operating and Reportable Segments [Member] | Online Channels [Member] | Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	4,130,314	5,720,197	15,657,343	18,659,690
Product line cost of goods sold	1,880,504	2,560,952	7,296,812	7,705,127
Product line gross profit	2,249,810	3,159,245	8,360,531	10,954,563
Operating and Reportable Segments [Member] | Online Channels [Member] | Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	486,084	634,617	1,657,369	2,388,584
Product line cost of goods sold	197,145	229,714	623,129	877,604
Product line gross profit	288,939	404,903	1,034,240	1,510,980
Operating and Reportable Segments [Member] | Traditional [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	2,025,401	3,397,021	7,067,291	12,737,007
Product line cost of goods sold	1,407,931	1,933,184	4,054,544	6,673,589
Product line gross profit	617,470	1,463,837	3,012,747	6,063,418
Operating income (loss)	(1,173,091)	65,592	(2,683,786)	711,123
Depreciation and amortization	120,509	59,374	309,516	176,412
Capital expenditures	252,545	446,445	710,220	1,135,851
Operating and Reportable Segments [Member] | Traditional [Member] | Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,190,987	1,700,394	3,640,572	4,986,354
Product line cost of goods sold	959,817	1,148,912	2,335,540	3,043,196
Product line gross profit	231,170	551,482	1,305,032	1,943,158
Operating and Reportable Segments [Member] | Traditional [Member] | Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	834,414	1,696,627	3,426,719	7,750,653
Product line cost of goods sold	448,114	784,272	1,719,004	3,630,393
Product line gross profit	$ 386,300	$ 912,355	$ 1,707,715	$ 4,120,260

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, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	$ 4,493,125	$ 5,296,530	$ 14,650,910	$ 17,347,026
Inventory write-downs			119,000	232,000
Product Line [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	3,485,580	4,723,850	11,974,485	15,256,320
Segment Reconciling Item [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Non-capitalized manufacturing and production control expenses	596,344	484,299	1,660,231	1,243,528
Freight out	216,817	294,143	851,171	976,855
Inventory write-downs	0	0	119,000	232,000
Other inventory adjustments	$ 194,384	$ (205,762)	$ 46,023	$ (361,677)

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, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Net Sales by Geographic Area [Abstract]
Net sales	$ 6,641,799	$ 9,751,835	$ 24,382,003	$ 33,785,281
Reportable Geographical Component [Member] | United States [Member]
Net Sales by Geographic Area [Abstract]
Net sales	6,545,336	9,390,774	23,630,410	32,237,221
Reportable Geographical Component [Member] | International [Member]
Net Sales by Geographic Area [Abstract]
Net sales	$ 96,463	$ 361,061	$ 751,593	$ 1,548,060

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
FAIR VALUE MEASUREMENTS [Abstract]
Asset impairment	$ 0	$ 0	$ 0	$ 0

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	9 Months Ended
	Mar. 31, 2023	Jun. 30, 2022
Inventories [Abstract]
Total supplies inventory	$ 376,830	$ 89,120
Total inventory	33,329,286	33,512,800
Short-term portion	7,889,917	11,024,276
Long-term portion	25,439,369	22,488,524
Work-in-process inventories issued to active production jobs	$ 1,410,000	2,760,000
Percentage of jewel inventory not mounted in finished jewelry settings	50%
Finished Jewelry [Member]
Inventories [Abstract]
Raw materials	$ 1,359,919	1,697,361
Work-in-process	716,494	1,260,728
Finished goods	13,045,604	12,100,910
Finished goods on consignment	2,266,501	2,135,856
Total	17,388,518	17,194,855
Loose Jewels [Member]
Inventories [Abstract]
Raw materials	812,024	1,985,355
Work-in-process	8,980,285	8,485,713
Finished goods	5,519,936	5,454,266
Finished goods on consignment	251,693	303,491
Total	$ 15,563,938	$ 16,228,825

NOTE RECEIVABLE (Details)

NOTE RECEIVABLE (Details) - Convertible Promissory Note [Member] - USD ($)	Mar. 31, 2023	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 ($)	Mar. 31, 2023	Jun. 30, 2022
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Deferred revenue	$ 434,132	$ 452,866
Accrued compensation and related benefits	275,465	614,443
Accrued sales taxes and franchise taxes	233,351	341,706
Accrued cooperative advertising	200,243	137,467
Other accrued expenses	1	1
Total accrued expenses and other liabilities	$ 1,143,192	$ 1,546,483

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
INCOME TAXES [Abstract]
Income tax expense	$ 6,293,048	$ 78,480	$ 5,858,155	$ 484,582
Effective tax rate			(131.06%)	17.20%

COMMITMENTS AND CONTINGENCIES,

COMMITMENTS AND CONTINGENCIES, Lease Arrangements (Details)		3 Months Ended		9 Months Ended
	Jan. 29, 2021 USD ($)	Mar. 31, 2023 USD ($) ft²	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($) ft²	Mar. 31, 2022 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		$ 506,000
Balance Sheet Classifications of Leases [Abstract]
Noncurrent operating lease ROU assets		2,336,334		2,336,334		$ 2,787,419
Operating Lease Liabilities [Abstract]
Current operating lease liabilities		874,177		874,177		856,571
Noncurrent operating lease liabilities		2,251,581		2,251,581		2,846,805
Total operating lease liabilities		3,125,758		3,125,758
Operating lease cost		$ 193,000	$ 193,000	$ 578,000	$ 596,000
Assumed discount rate		2.81%		2.81%
Remaining operating lease term		3 years 6 months 29 days		3 years 6 months 29 days
Future Lease Payments Under Operating Leases [Abstract]
2023		$ 219,393		$ 219,393
2024		893,660		893,660
2025		918,236		918,236
2026		943,487		943,487
2027		317,327		317,327
Total lease payments		3,292,103		3,292,103
Less: imputed interest		166,345		166,345
Total operating lease liabilities		3,125,758		3,125,758
Less: current lease liability		874,177		874,177		856,571
Total long-term lease liability		2,251,581		2,251,581		$ 2,846,805
Cash paid for operating leases		$ 237,000	$ 160,000	$ 704,000	$ 330,000

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES, Purchase Commitments (Details) - SiC Materials [Member] $ in Thousands	6 Months Ended	9 Months Ended
	Mar. 31, 2023 USD ($)	Mar. 31, 2023 USD ($) Option	Mar. 31, 2022 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	$ 52,950
Remaining purchase commitment	24,750	24,750
Purchases	0	1,800	$ 4,490
Minimum [Member]
Purchase Commitments [Abstract]
Future minimum annual purchase commitments	4,000	4,000
Maximum [Member]
Purchase Commitments [Abstract]
Future minimum annual purchase commitments	$ 10,000	$ 10,000

DEBT (Details)

DEBT (Details) - USD ($)	1 Months Ended	9 Months Ended
	Jul. 27, 2022	Mar. 31, 2023
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		9 Months Ended
	Mar. 31, 2023	Sep. 30, 2022	Mar. 31, 2023	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)	9 Months Ended
	Mar. 31, 2023 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		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Stock-Based Compensation [Abstract]
Stock-based compensation expense	$ 34,594	$ 198,523	$ 209,319	$ 676,934
Stock-based compensation capitalized as a cost of inventory	0	0	0	0
Employee Stock Options [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation expense	63,383	60,045	185,585	187,059
Restricted Stock Awards [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation expense	$ (28,789)	$ 138,478	$ 23,734	$ 489,875

SHAREHOLDERS' EQUITY AND STOC_6

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Option Activity (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Stock Option Activity [Roll Forward]
Outstanding, beginning balance (in shares)	1,658,803
Granted (in shares)	270,787
Forfeited (in shares)	(22,004)
Expired (in shares)	(3,663)
Outstanding, ending balance (in shares)	1,903,923
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)	2.01
Expired (in dollars per share)	1.01
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	$ 1.37
Fair value of stock options vested	$ 225	$ 188

SHAREHOLDERS' EQUITY AND STOC_7

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Options Outstanding (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Stock Options Outstanding and Exercisable [Abstract]
Options outstanding, balance as of end of period (in shares)	1,903,923		1,658,803
Options outstanding, weighted average remaining contractual life	6 years 7 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)	1,440,913
Options exercisable, weighted average remaining contractual life	5 years 9 months 21 days
Options exercisable, weighted average exercise price (in dollars per share)	$ 1.24
Options Vested or Expected to Vest [Abstract]
Options vested or expected to vest, balance as of end of period (in shares)	1,859,855
Options vested or expected to vest, weighted average remaining contractual life	6 years 6 months 21 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	$ 256
Unrecognized stock-based compensation expense, period for recognition	18 months
Options outstanding, aggregate intrinsic value	$ 101	$ 973
Options exercisable, aggregate intrinsic value	101	973
Options vested or expected to vest, aggregate intrinsic value	$ 101	973
Exercised (in shares)	0
Options exercised, aggregate intrinsic value		829
Tax benefit associated with stock options exercised		$ 93

SHAREHOLDERS' EQUITY AND STOC_8

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Restricted Stock Activity (Details) - Restricted Stock [Member] $ / shares in Units, $ in Thousands	9 Months Ended
	Mar. 31, 2023 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 | $	$ 173
Unrecognized stock-based compensation expense, period for recognition	4 months

NET (LOSS) INCOME PER COMMON _3

NET (LOSS) INCOME PER COMMON SHARE (Details) - USD ($)	3 Months Ended						9 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Mar. 31, 2023	Mar. 31, 2022
Numerator [Abstract]
Net (loss) income	$ (8,396,008)	$ (1,041,781)	$ (890,192)	$ 338,508	$ 1,167,612	$ 827,025	$ (10,327,981)	$ 2,333,145
Denominator [Abstract]
Weighted average common shares outstanding, Basic (in shares)	30,344,954			30,484,897			30,387,303	30,286,195
Effect of dilutive securities (in shares)	0			783,513			0	985,482
Weighted average common shares outstanding, Diluted (in shares)	30,344,954			31,268,410			30,387,303	31,271,677
Net (Loss) Income Per Common Share [Abstract]
Basic (in dollars per share)	$ (0.28)			$ 0.01			$ (0.34)	$ 0.08
Diluted (in dollars per share)	$ (0.28)			$ 0.01			$ (0.34)	$ 0.07
Stock Options [Member]
Net Income per Common Share [Abstract]
Shares excluded from the computation of diluted net income per common share (in shares)	1,900,000			975,000			1,900,000	773,000
Restricted Stock [Member]
Net Income per Common Share [Abstract]
Unvested restricted stock outstanding (in shares)	179,000			179,000			179,000	179,000

MAJOR CUSTOMERS AND CONCENTRA_3

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details)	3 Months Ended		9 Months Ended			12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023		Mar. 31, 2022	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			24%			20%
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage			18%			29%
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage			15%				[1]
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	13%	13%	14%		15%
[1]Customer C did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2022.[2]Customer D did not have individual balances that represented 10% or more of total gross accounts receivable as of March 31, 2023.