Charles & Colvard (CTHR) 10-Q 13 Feb 24 2024 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2023	Feb. 02, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2024
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		30,344,955

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2023	Jun. 30, 2023
Current assets:
Cash and cash equivalents	$ 5,772,124	$ 10,446,532
Restricted cash	5,315,063	5,122,379
Accounts receivable, net	1,528,476	380,085
Inventory, net	9,879,556	7,476,046
Note receivable	250,000	250,000
Prepaid expenses and other assets	937,767	901,354
Total current assets	23,682,986	24,576,396
Long-term assets:
Inventory, net	15,882,879	19,277,530
Property and equipment, net	2,638,983	2,491,569
Intangible assets, net	338,222	305,703
Operating lease right-of-use assets	1,872,832	2,183,232
Other assets	49,658	49,658
Total long-term assets	20,782,574	24,307,692
TOTAL ASSETS	44,465,560	48,884,088
Current liabilities:
Accounts payable	6,049,022	4,786,155
Operating lease liabilities, current portion	892,147	880,126
Accrued expenses and other liabilities	1,404,825	1,395,479
Total current liabilities	8,345,994	7,061,760
Long-term liabilities:
Noncurrent operating lease liabilities	1,631,724	2,047,742
Total long-term liabilities	1,631,724	2,047,742
Total liabilities	9,977,718	9,109,502
Commitments and contingencies (Note 9)
Shareholders' equity:
Common stock, no par value; 50,000,000 shares authorized; 30,733,358 shares issued and 30,344,955 shares outstanding at December 31, 2023 and 30,912,108 shares issued and 30,523,705 shares outstanding at June 30, 2023	57,242,211	57,242,211
Additional paid-in capital	26,324,537	26,205,919
Treasury stock, at cost, 388,403 shares at both December 31, 2023 and June 30, 2023	(489,979)	(489,979)
Accumulated deficit	(48,588,927)	(43,183,565)
Total shareholders' equity	34,487,842	39,774,586
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 44,465,560	$ 48,884,088

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2023	Jun. 30, 2023
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)	30,733,358	30,912,108
Common stock, shares outstanding (in shares)	30,344,955	30,523,705
Treasury stock (in shares)	388,403	388,403

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 7,905,639	$ 10,366,122	$ 12,858,662	$ 17,740,204
Costs and expenses:
Cost of goods sold	5,049,947	6,071,775	8,058,454	10,157,785
Sales and marketing	4,296,324	4,339,684	7,018,289	7,447,630
General and administrative	1,497,061	1,187,955	3,351,329	2,601,431
Total costs and expenses	10,843,332	11,599,414	18,428,072	20,206,846
Loss from operations	(2,937,693)	(1,233,292)	(5,569,410)	(2,466,642)
Other income (expense):
Interest income	77,359	59,574	169,619	99,776
Interest expense	(5,571)	0	(5,571)	0
Total other income (expense), net	71,788	59,574	164,048	99,776
Loss before income taxes	(2,865,905)	(1,173,718)	(5,405,362)	(2,366,866)
Income tax benefit	0	131,937	0	434,893
Net loss	$ (2,865,905)	$ (1,041,781)	$ (5,405,362)	$ (1,931,973)
Net loss per common share:
Basic (in dollars per share)	$ (0.09)	$ (0.03)	$ (0.18)	$ (0.06)
Diluted (in dollars per share)	$ (0.09)	$ (0.03)	$ (0.18)	$ (0.06)
Weighted average number of shares used in computing net loss per common share:
Basic (in shares)	30,344,955	30,344,954	30,344,955	30,408,018
Diluted (in shares)	30,344,955	30,344,954	30,344,955	30,408,018

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, 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	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					$ (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
Issuance of restricted stock	$ 0	0	0	0	0
Issuance of restricted stock (in shares)	178,750
Net loss	$ 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
Balance at Jun. 30, 2023	57,242,211	26,205,919	(489,979)	(43,183,565)	$ 39,774,586
Balance (in shares) at Jun. 30, 2023					30,523,705
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	51,444	0	0	$ 51,444
Net loss	0	0	0	(2,539,457)	(2,539,457)
Balance at Sep. 30, 2023	57,242,211	26,257,363	(489,979)	(45,723,022)	$ 37,286,573
Balance (in shares) at Sep. 30, 2023					30,523,705
Balance at Jun. 30, 2023	57,242,211	26,205,919	(489,979)	(43,183,565)	$ 39,774,586
Balance (in shares) at Jun. 30, 2023					30,523,705
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchases of common stock (in shares)					0
Net loss					$ (5,405,362)
Balance at Dec. 31, 2023	57,242,211	26,324,537	(489,979)	(48,588,927)	$ 34,487,842
Balance (in shares) at Dec. 31, 2023					30,344,955
Balance at Sep. 30, 2023	57,242,211	26,257,363	(489,979)	(45,723,022)	$ 37,286,573
Balance (in shares) at Sep. 30, 2023					30,523,705
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	67,174	0	0	$ 67,174
Cancellation of restricted stock	$ 0	0	0	0	0
Cancellation of restricted stock (in shares)	(178,750)
Net loss	$ 0	0	0	(2,865,905)	(2,865,905)
Balance at Dec. 31, 2023	$ 57,242,211	$ 26,324,537	$ (489,979)	$ (48,588,927)	$ 34,487,842
Balance (in shares) at Dec. 31, 2023					30,344,955

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (5,405,362)	$ (1,931,973)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	357,019	308,900
Stock-based compensation	118,618	174,725
Provision for uncollectible accounts	117,000	0
Provision for sales returns	154,000	422,000
Inventory write-downs	0	119,000
Provision for accounts receivable discounts	5,793	4,899
Deferred income taxes	0	(434,893)
Changes in operating assets and liabilities:
Accounts receivable	(1,425,184)	(292,951)
Inventory	991,141	(1,601,247)
Prepaid expenses and other assets, net	273,987	247,025
Accounts payable	1,262,867	459,640
Accrued expenses and other liabilities	(394,651)	(529,418)
Net cash used in operating activities	(3,944,772)	(3,054,293)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(495,302)	(617,283)
Payments for intangible assets	(41,650)	(30,658)
Net cash used in investing activities	(536,952)	(647,941)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit	500,000	0
Payments on line of credit	(500,000)	0
Repurchases of common stock	0	(451,815)
Net cash used in financing activities	0	(451,815)
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(4,481,724)	(4,154,049)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	15,568,911	21,179,340
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	11,087,187	17,025,291
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes	0	5,900
Cash paid during the period for interest expense	$ 2,875	$ 0

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	6 Months Ended
	Dec. 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, moissanite, lab grown diamonds, and created color at wholesale prices to distributors, manufacturers, retailers, and designers, including some of the largest distributors and jewelry manufacturers in the world. In addition, in May 2023, the Company launched charlesandcolvarddirect.com, a direct-to-wholesaler sales portal, which is a gemstone product disposition wholesale outlet. Charles & Colvard Signature Showroom

BASIS OF PRESENTATION AND SIGNI

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Dec. 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 six months ended December 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024. The condensed consolidated financial statements as of December 31, 2023 and for the three and six months ended December 31, 2023 and 2022 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2023 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 “2023 Annual Report”) for the fiscal year ended June 30, 2023 or Fiscal 2023 filed with the SEC on October 12, 2023. The accompanying condensed consolidated financial statements as of December 31, 2023 and June 30, 2023 and for the three and six months ended December 31, 2023 and 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, 2023 or 2022. All intercompany accounts have been eliminated. Significant Accounting Policies – Use of Estimates stock-based compensation, and revenue recognition. Changes in estimates are reflected in the consolidated financial statements in the period in which the change in estimate occurs. Restricted Cash – n accordance with the terms of the Company’s cash collateralized $5.00 million credit facility from JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), which expires by its terms on July 31, 2024, the Company is required to keep cash in a cash deposit account held by JPMorgan Chase. Such amount is held as security for the Company’s credit facility from JPMorgan Chase. Accordingly, this cash deposit held by JPMorgan Chase is classified as restricted cash for financial reporting purposes on the Company’s condensed consolidated balance sheets. For additional information regarding the Company’s cash collateralized credit facility, see Note 10, “Debt. 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, 2023 and June 30, 2023, cash in the amount of approximately $250,000 and approximately $30, 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, 2023 June 30, 2023 Cash and cash equivalents $ 5,772,124 $ 10,446,532 Restricted cash 5,315,063 5,122,379 Total cash, cash equivalents, and restricted cash $ 11,087,187 $ 15,568,911 Recently Adopted/Issued Accounting Pronouncements – In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “ Segment Reporting Topic Improvements to Reportable Segment Disclosures In December, 2023 the FASB issued ASU No. 2023-09 “ Income Taxes Topic Improvements to Income Tax Disclosures

SEGMENT INFORMATION AND GEOGRAP

SEGMENT INFORMATION AND GEOGRAPHIC DATA	6 Months Ended
	Dec. 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, charlesandcolvarddirect.com , including its own Charles & Colvard Signature Showroom The Company evaluates the financial performance of its segments based on net sales and product line gross profit, or the excess of product line sales over product line cost of goods sold. 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. Summary financial information by reportable segment is as follows: Three Months Ended December 31, 2023 Online Channels Traditional Total Net sales Finished jewelry $ 6,343,510 $ 1,047,842 $ 7,391,352 Loose jewels 310,707 203,580 514,287 Total $ 6,654,217 $ 1,251,422 $ 7,905,639 Product line cost of goods sold Finished jewelry $ 3,392,715 $ 525,801 $ 3,918,516 Loose jewels 96,448 104,545 200,993 Total $ 3,489,163 $ 630,346 $ 4,119,509 Product line gross profit Finished jewelry $ 2,950,795 $ 522,041 $ 3,472,836 Loose jewels 214,259 99,035 313,294 Total $ 3,165,054 $ 621,076 $ 3,786,130 Depreciation and amortization $ 45,392 $ 133,337 $ 178,729 Capital expenditures $ 179,559 $ 98,691 $ 278,250 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 Depreciation and amortization $ 56,505 $ 114,684 $ 171,189 Capital expenditures $ 22,620 $ 164,263 $ 186,883 Six Months Ended December 31, 2023 Online Channels Traditional Total Net sales Finished jewelry $ 9,940,523 $ 1,752,088 $ 11,692,611 Loose jewels 630,381 535,670 1,166,051 Total $ 10,570,904 $ 2,287,758 $ 12,858,662 Product line cost of goods sold Finished jewelry $ 4,968,315 $ 909,368 $ 5,877,683 Loose jewels 196,426 243,941 440,367 Total $ 5,164,741 $ 1,153,309 $ 6,318,050 Product line gross profit Finished jewelry $ 4,972,208 $ 842,720 $ 5,814,928 Loose jewels 433,955 291,729 725,684 Total $ 5,406,163 $ 1,134,449 $ 6,540,612 Depreciation and amortization $ 94,151 $ 262,868 $ 357,019 Capital expenditures $ 299,704 $ 195,598 $ 495,302 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 Depreciation and amortization $ 119,892 $ 189,008 $ 308,900 Capital expenditures $ 159,608 $ 457,675 $ 617,283 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, 2023 2022 2023 2022 Product line cost of goods sold $ 4,119,509 $ 5,056,581 $ 6,318,050 $ 8,488,904 Non-capitalized manufacturing and production control expenses 664,578 686,834 1,262,463 1,063,887 Freight out 338,249 358,617 542,465 634,354 Inventory write-downs - - - 119,000 Other inventory adjustments (72,389 ) (30,257 ) (64,524 ) (148,360 ) Cost of goods sold $ 5,049,947 $ 6,071,775 $ 8,058,454 $ 10,157,785 A reconciliation of the Company’s consolidated product line gross profit to the Company’s consolidated net loss before income taxes is as follows: Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Product line gross profit $ 3,786,130 $ 5,309,541 $ 6,540,612 $ 9,251,300 Non-allocated cost of goods sold (930,438 ) (1,015,194 ) (1,740,404 ) (1,668,881 ) Sales and marketing (4,296,324 ) (4,339,684 ) (7,018,289 ) (7,447,630 ) General and administrative (1,497,061 ) (1,187,955 ) (3,351,329 ) (2,601,431 ) Other income (expense) net 71,788 59,574 164,048 99,776 Loss before income taxes $ (2,865,905 ) $ (1,173,718 ) $ (5,405,362 ) $ (2,366,866 ) 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 data by geographic area: Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Net sales United States $ 7,742,776 $ 9,989,702 $ 12,511,686 $ 17,085,074 International 162,863 376,420 346,976 655,130 Total $ 7,905,639 $ 10,366,122 $ 12,858,662 $ 17,740,204

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Dec. 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, restricted cash, 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 short-term nature of these financial instruments. There were no assets measured at fair value on a non-recurring basis as of December 31, 2023 or June 30, 2023.

INVENTORIES

INVENTORIES	6 Months Ended
	Dec. 31, 2023
INVENTORIES [Abstract]
INVENTORIES	5. INVENTORIES The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2023 June 30, 2023 Finished jewelry: Raw materials $ 1,409,122 $ 1,288,906 Work-in-process 623,300 1,223,670 Finished goods 12,914,517 12,772,611 Finished goods on consignment 2,095,443 2,039,506 Total finished jewelry $ 17,042,382 $ 17,324,693 Loose jewels: Raw materials $ 174,274 $ 421,603 Work-in-process 5,450,946 6,131,853 Finished goods 2,627,706 2,294,270 Finished goods on consignment 198,235 254,323 Total loose jewels 8,451,161 9,102,049 Total supplies inventory 268,892 326,834 Total inventory $ 25,762,435 $ 26,753,576 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: December 31, 2023 June 30, 2023 Short-term portion $ 9,879,556 $ 7,476,046 Long-term portion 15,882,879 19,277,530 Total $ 25,762,435 $ 26,753,576 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, 2023 and June 30, 2023, work-in-process inventories issued to active production jobs approximated $1.20 million and $1.99 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. Product obsolescence is closely monitored and reviewed by management as of and for each financial reporting period. The Company manufactures finished jewelry featuring moissanite, lab grown diamonds, and created color gemstones. 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 side-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 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, 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	6 Months Ended
	Dec. 31, 2023
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, 2023 June 30, 2023 Deferred revenue $ 432,235 $ 566,896 Accrued compensation and related benefits 371,423 382,630 Accrued sales taxes and franchise tax 246,163 202,091 Accrued cooperative advertising 352,295 243,861 Other accrued expenses 2,709 1 Total accrued expenses and other liabilities $ 1,404,825 $ 1,395,479

INCOME TAXES

INCOME TAXES	6 Months Ended
	Dec. 31, 2023
INCOME TAXES [Abstract]
INCOME TAXES	8. INCOME TAXES For the three and six months ended December 31, 2023, the Company’s statutory tax rate was 22.94% and consisted of the federal income tax rate of 21.00% and a blended state income tax rate of 1.94%, net of the federal benefit. For both the three and six months ended December 31, 2023, the Company’s average effective tax rate was zero. For the three and six months ended December 31, 2022, the Company’s effective tax rate was 11.24% and 18.37%, 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 accounting period then ended. The Company recognized zero net income tax benefit for the three and six months ended December 31, 2023, compared with a net income tax benefit of approximately $132,000 and $435,000 for the three and six months ended December 31, 2022, respectively. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets. As of December 31, 2023, the Company’s management determined that sufficient negative evidence continued to exist to conclude it was uncertain that the Company would have sufficient future taxable income to utilize its deferred tax assets, and therefore, the Company maintained a full valuation allowance against its deferred tax assets.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Dec. 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 in effect as of December 31, 2023 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, 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 December 31, 2023, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 1,872,832 Current operating lease liabilities $ 892,147 Noncurrent operating lease liabilities 1,631,724 Total operating lease liabilities $ 2,523,871 The Company’s total operating lease cost for the three months ended December 31, 2023 and 2022 was approximately $175,000 for each period. The Company’s total operating lease cost for the six months ended December 31, 2023 and 2022 was approximately $349,000 for each period. As of December 31, 2023, 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 2.83 years. As of December 31, 2023, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2024 $ 450,852 2025 918,236 2026 943,487 2027 317,327 Total lease payments $ 2,629,902 Less: imputed interest 106,031 Present value of lease payments 2,523,871 Less: current lease obligations 892,147 Total long-term lease obligations $ 1,631,724 The Company makes cash payments for amounts included in the measurement of its lease liabilities. During the three months ended December 31, 2023 and 2022, cash paid for operating leases was approximately $241,000 and $235,000, respectivel y. During the six months ended December 31, 2023 and 2022, cash paid for operating leases was approximately $479,000 and $466,000, respectively Purchase Commitments On December 12, 2014, the Company entered into an exclusive supply agreement (the “Supply Agreement”) with Wolfspeed, Inc. (“Wolfspeed”), formerly known as Cree, Inc. 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, 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 six months ended December 31, 2023 the Company made no purchases of SiC crystals. During the six months ended December 31, 2022 the Company purchased $1.80 million 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 twelve-month period ended December 31, 2023. while engaged in discussions regarding the terms of the Supply Agreement. On July 28, 2023, Wolfspeed initiated a confidential arbitration against the Company for breach of contract claiming damages, plus interest, costs, and attorneys’ fees. Wolfspeed has alleged that the Company failed to satisfy the purchase obligations provided in the Supply Agreement for Fiscal 2023 in the amount of $4.25 million and failed to pay for $3.30 million of SiC crystals Wolfspeed delivered to the Company. Wolfspeed further alleges that the Company intends to breach its remaining purchase obligations under the Supply Agreement, representing an additional $18.5 million in alleged damages. While the Company is evaluating Wolfspeed’s claims, the Company disputes the amount sought, and intends to vigorously defend its position, including by asserting rights and defenses that the Company may have under the Supply Agreement at law and in equity. A hearing has been scheduled for September 30, 2024. The final determinations of liability arising from this matter will be made following comprehensive investigations, discovery and arbitration processes.

DEBT

DEBT	6 Months Ended
	Dec. 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 $5.1 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. Effective, June 21, 2023, the JPMorgan Chase Credit Facility was amended further to extend the maturity date to July 31, 2024. 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. 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 . The JPMorgan Chase Credit Facility is evidenced by a credit agreement, as amended, between JPMorgan Chase and the Company (the “JPMorgan Chase Credit Agreement”), effective as of June 21, 2023, and customary ancillary documents, in the principal amount not to exceed $5.00 million at any one time outstanding and a line of credit note (the “JPMorgan Chase Line of Credit Note”) in which the Company promises to pay on or before July 31, 2024, the amount of $5.00 million or so much thereof as may be advanced and outstanding. In the event of default, JPMorgan Chase, at its option, may accelerate the maturity of advances outstanding under the JPMorgan Chase Credit Facility. The JPMorgan Chase Credit Agreement and ancillary documents contain customary covenants, representations, fees, debt, contingent obligations, liens, loans, leases, investments, mergers, acquisitions, divestitures, subsidiaries, affiliate transactions, changes in control, as well as indemnity, expense reimbursement, and confidentiality provisions. In connection with the JPMorgan Chase Credit Facility, effective July 7, 2021, the Company incurred a non-refundable origination fee in the amount of $10,000 that was paid in full to JPMorgan Chase upon execution of the JPMorgan Chase Credit Facility on July 12, 2021. No origination fee was paid to JPMorgan Chase in connection with amending the JPMorgan Chase Credit Facility on July 28, 2022, and June 21, 2023. The Company also agreed to maintain its primary banking depository and disbursement relationship with JPMorgan Chase. Events of default under the JPMorgan Chase Credit Facility include, without limitation, a default, event of default, or event that would constitute a default or event of default (pending giving notice or lapse of time or both), of any provision of the JPMorgan Chase Credit Agreement, the JPMorgan Chase Line of Credit Note, or any other instrument or document executed in connection with the JPMorgan Chase Credit Agreement or with any of the indebtedness, liabilities, and obligations of the Company to JPMorgan Chase or that would result from the extension of credit by JPMorgan Chase to the Company. As of December 31, 2023 the Company had no outstanding debt .

SHAREHOLDERS' EQUITY AND STOCK-

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION	6 Months Ended
	Dec. 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 six-month period ended December 31, 2023 the Company repurchased no shares of its common 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. Dividends The Company has paid no cash dividends during the current fiscal year through December 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 December 31, Six Months Ended December 31, 2023 2022 2023 2022 Employee stock options $ 67,174 $ 49,704 $ 118,618 $ 122,202 Restricted stock awards - 28,789 - 52,523 Totals $ 67,174 $ 78,493 $ 118,618 $ 174,725 No stock-based compensation was capitalized as a cost of inventory during the three and six months ended December 31, 2023 or 2022. Stock Options – The following is a summary of the stock option activity for the six months ended December 31, 2023: Shares Weighted Average Exercise Price Outstanding, June 30, 2023 1,817,665 $ 1.24 Granted 1,058,612 $ 0.35 Forfeited (25,166 ) $ 1.88 Expired (99,334 ) $ 2.05 Outstanding, December 31, 2023 2,751,777 $ 0.86 T he weighted average grant date fair value of stock options granted during the six-months ended December 31, 2023 and 2022 was approximately $0.21 and $0.59, respectively. The total fair value of stock options that vested during the six months ended December 31, 2023 and 2022 The following table summarizes information about stock options outstanding at December 31, 2023: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 12/31/2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,751,777 7.42 $ 0.86 1,734,641 6.06 $ 1.06 2,683,732 7.36 $ 0.87 As of December 31, 2023, the unrecognized stock-based compensation expense related to unvested stock options was approximately $248,000, which is expected to be recognized over a weighted average period of approximately 15 months. The aggregate intrinsic value of stock options outstanding, exercisable, and vested or expected to vest at December 31, 2023 and 2022 was approximately $59,000 and $57,000, respectively. These amounts are before applicable income taxes and represents the closing market price of the Company’s common stock at December 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. There were no stock options exercised during the six-month-periods ended December 31, 2023 and 2022 . Restricted Stock During the six-month period ended December 31, 2023 there were no restricted stock shares awarded to plan participants. The unvested restricted shares as of December 31, 2022, totaled 178,750 with a weighted average grant date fair value of $0.97, were all performance-based restricted shares and were scheduled to vest in July 2023, subject to achievement of the underlying performance goals. None of these shares vested and during the three-month period ended December 31, 2023, these shares were cancelled as the underlying performance goals were not met .

NET LOSS PER COMMON SHARE

NET LOSS PER COMMON SHARE	6 Months Ended
	Dec. 31, 2023
NET LOSS PER COMMON SHARE [Abstract]
NET LOSS PER COMMON SHARE	12. NET LOSS PER COMMON SHARE Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods. Diluted net loss 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. For the three and six months ended December 31, 2023, stock options to purchase approximately 2.75 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, 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. Approximately 179,000 shares of unvested restricted stock are excluded from the computation of diluted net loss for the three and six months ended December 31, 2022 because the shares were performance-based and the underlying conditions had not been met as of December 31, 2022.

MAJOR CUSTOMERS AND CONCENTRATI

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK	6 Months Ended
	Dec. 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 uncollectible accounts is determined based upon factors surrounding the credit risk of specific customers, historical trends, and other information. 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, 2023 June 30, 2023 Customer A 12 % 24 % Customer B 32 % 14 % Customer C * % 14 % Customer D 16 % ** % Customer E 15 % ** % * Customer C did not have a balance that represented 10% or more of total gross accounts receivable as of December 31, 2023. ** Customers D and E did not have a balance that represented 10% or more of total gross accounts receivable as of June 30, 2023. 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, 2023 2022 2023 2022 Customer E 13 % 12 % 13 % 14 %

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

BASIS OF PRESENTATION AND SIG_2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Dec. 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 six months ended December 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024. The condensed consolidated financial statements as of December 31, 2023 and for the three and six months ended December 31, 2023 and 2022 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2023 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 “2023 Annual Report”) for the fiscal year ended June 30, 2023 or Fiscal 2023 filed with the SEC on October 12, 2023.
Principles of Consolidation	The accompanying condensed consolidated financial statements as of December 31, 2023 and June 30, 2023 and for the three and six months ended December 31, 2023 and 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, 2023 or 2022. All intercompany accounts have been eliminated.
Use of Estimates	Use of Estimates stock-based compensation, and revenue recognition. Changes in estimates are reflected in the consolidated financial statements in the period in which the change in estimate occurs.
Restricted Cash	Restricted Cash – n accordance with the terms of the Company’s cash collateralized $5.00 million credit facility from JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), which expires by its terms on July 31, 2024, the Company is required to keep cash in a cash deposit account held by JPMorgan Chase. Such amount is held as security for the Company’s credit facility from JPMorgan Chase. Accordingly, this cash deposit held by JPMorgan Chase is classified as restricted cash for financial reporting purposes on the Company’s condensed consolidated balance sheets. For additional information regarding the Company’s cash collateralized credit facility, see Note 10, “Debt. 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, 2023 and June 30, 2023, cash in the amount of approximately $250,000 and approximately $30, 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, 2023 June 30, 2023 Cash and cash equivalents $ 5,772,124 $ 10,446,532 Restricted cash 5,315,063 5,122,379 Total cash, cash equivalents, and restricted cash $ 11,087,187 $ 15,568,911
Recently Adopted/Issued Accounting Pronouncements	Recently Adopted/Issued Accounting Pronouncements – In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “ Segment Reporting Topic Improvements to Reportable Segment Disclosures In December, 2023 the FASB issued ASU No. 2023-09 “ Income Taxes Topic Improvements to Income Tax Disclosures

BASIS OF PRESENTATION AND SIG_3

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Dec. 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: December 31, 2023 June 30, 2023 Cash and cash equivalents $ 5,772,124 $ 10,446,532 Restricted cash 5,315,063 5,122,379 Total cash, cash equivalents, and restricted cash $ 11,087,187 $ 15,568,911

SEGMENT INFORMATION AND GEOGR_2

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)	6 Months Ended
	Dec. 31, 2023
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, 2023 Online Channels Traditional Total Net sales Finished jewelry $ 6,343,510 $ 1,047,842 $ 7,391,352 Loose jewels 310,707 203,580 514,287 Total $ 6,654,217 $ 1,251,422 $ 7,905,639 Product line cost of goods sold Finished jewelry $ 3,392,715 $ 525,801 $ 3,918,516 Loose jewels 96,448 104,545 200,993 Total $ 3,489,163 $ 630,346 $ 4,119,509 Product line gross profit Finished jewelry $ 2,950,795 $ 522,041 $ 3,472,836 Loose jewels 214,259 99,035 313,294 Total $ 3,165,054 $ 621,076 $ 3,786,130 Depreciation and amortization $ 45,392 $ 133,337 $ 178,729 Capital expenditures $ 179,559 $ 98,691 $ 278,250 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 Depreciation and amortization $ 56,505 $ 114,684 $ 171,189 Capital expenditures $ 22,620 $ 164,263 $ 186,883 Six Months Ended December 31, 2023 Online Channels Traditional Total Net sales Finished jewelry $ 9,940,523 $ 1,752,088 $ 11,692,611 Loose jewels 630,381 535,670 1,166,051 Total $ 10,570,904 $ 2,287,758 $ 12,858,662 Product line cost of goods sold Finished jewelry $ 4,968,315 $ 909,368 $ 5,877,683 Loose jewels 196,426 243,941 440,367 Total $ 5,164,741 $ 1,153,309 $ 6,318,050 Product line gross profit Finished jewelry $ 4,972,208 $ 842,720 $ 5,814,928 Loose jewels 433,955 291,729 725,684 Total $ 5,406,163 $ 1,134,449 $ 6,540,612 Depreciation and amortization $ 94,151 $ 262,868 $ 357,019 Capital expenditures $ 299,704 $ 195,598 $ 495,302 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 Depreciation and amortization $ 119,892 $ 189,008 $ 308,900 Capital expenditures $ 159,608 $ 457,675 $ 617,283
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, 2023 2022 2023 2022 Product line cost of goods sold $ 4,119,509 $ 5,056,581 $ 6,318,050 $ 8,488,904 Non-capitalized manufacturing and production control expenses 664,578 686,834 1,262,463 1,063,887 Freight out 338,249 358,617 542,465 634,354 Inventory write-downs - - - 119,000 Other inventory adjustments (72,389 ) (30,257 ) (64,524 ) (148,360 ) Cost of goods sold $ 5,049,947 $ 6,071,775 $ 8,058,454 $ 10,157,785
Reconciliation of Product Line Gross Profit	A reconciliation of the Company’s consolidated product line gross profit to the Company’s consolidated net loss before income taxes is as follows: Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Product line gross profit $ 3,786,130 $ 5,309,541 $ 6,540,612 $ 9,251,300 Non-allocated cost of goods sold (930,438 ) (1,015,194 ) (1,740,404 ) (1,668,881 ) Sales and marketing (4,296,324 ) (4,339,684 ) (7,018,289 ) (7,447,630 ) General and administrative (1,497,061 ) (1,187,955 ) (3,351,329 ) (2,601,431 ) Other income (expense) net 71,788 59,574 164,048 99,776 Loss before income taxes $ (2,865,905 ) $ (1,173,718 ) $ (5,405,362 ) $ (2,366,866 )
Net Sales by Geographic Area	The following presents net sales data by geographic area: Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Net sales United States $ 7,742,776 $ 9,989,702 $ 12,511,686 $ 17,085,074 International 162,863 376,420 346,976 655,130 Total $ 7,905,639 $ 10,366,122 $ 12,858,662 $ 17,740,204

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Dec. 31, 2023
INVENTORIES [Abstract]
Inventories	The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: December 31, 2023 June 30, 2023 Finished jewelry: Raw materials $ 1,409,122 $ 1,288,906 Work-in-process 623,300 1,223,670 Finished goods 12,914,517 12,772,611 Finished goods on consignment 2,095,443 2,039,506 Total finished jewelry $ 17,042,382 $ 17,324,693 Loose jewels: Raw materials $ 174,274 $ 421,603 Work-in-process 5,450,946 6,131,853 Finished goods 2,627,706 2,294,270 Finished goods on consignment 198,235 254,323 Total loose jewels 8,451,161 9,102,049 Total supplies inventory 268,892 326,834 Total inventory $ 25,762,435 $ 26,753,576 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: December 31, 2023 June 30, 2023 Short-term portion $ 9,879,556 $ 7,476,046 Long-term portion 15,882,879 19,277,530 Total $ 25,762,435 $ 26,753,576

ACCRUED EXPENSES AND OTHER LI_2

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)	6 Months Ended
	Dec. 31, 2023
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, 2023 June 30, 2023 Deferred revenue $ 432,235 $ 566,896 Accrued compensation and related benefits 371,423 382,630 Accrued sales taxes and franchise tax 246,163 202,091 Accrued cooperative advertising 352,295 243,861 Other accrued expenses 2,709 1 Total accrued expenses and other liabilities $ 1,404,825 $ 1,395,479

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Dec. 31, 2023
COMMITMENTS AND CONTINGENCIES [Abstract]
Balance Sheet Classifications of Leases	As of December 31, 2023, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 1,872,832 Current operating lease liabilities $ 892,147 Noncurrent operating lease liabilities 1,631,724 Total operating lease liabilities $ 2,523,871
Remaining Future Payments Under Operating Leases	As of December 31, 2023, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2024 $ 450,852 2025 918,236 2026 943,487 2027 317,327 Total lease payments $ 2,629,902 Less: imputed interest 106,031 Present value of lease payments 2,523,871 Less: current lease obligations 892,147 Total long-term lease obligations $ 1,631,724

SHAREHOLDERS' EQUITY AND STOC_2

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Dec. 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 December 31, Six Months Ended December 31, 2023 2022 2023 2022 Employee stock options $ 67,174 $ 49,704 $ 118,618 $ 122,202 Restricted stock awards - 28,789 - 52,523 Totals $ 67,174 $ 78,493 $ 118,618 $ 174,725
Stock Option Activity	Stock Options – The following is a summary of the stock option activity for the six months ended December 31, 2023: Shares Weighted Average Exercise Price Outstanding, June 30, 2023 1,817,665 $ 1.24 Granted 1,058,612 $ 0.35 Forfeited (25,166 ) $ 1.88 Expired (99,334 ) $ 2.05 Outstanding, December 31, 2023 2,751,777 $ 0.86
Stock Options Outstanding	The following table summarizes information about stock options outstanding at December 31, 2023: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 12/31/2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 12/31/2023 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,751,777 7.42 $ 0.86 1,734,641 6.06 $ 1.06 2,683,732 7.36 $ 0.87

MAJOR CUSTOMERS AND CONCENTRA_2

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)	6 Months Ended
	Dec. 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: December 31, 2023 June 30, 2023 Customer A 12 % 24 % Customer B 32 % 14 % Customer C * % 14 % Customer D 16 % ** % Customer E 15 % ** % * Customer C did not have a balance that represented 10% or more of total gross accounts receivable as of December 31, 2023. ** Customers D and E did not have a balance that represented 10% or more of total gross accounts receivable as of June 30, 2023. 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, 2023 2022 2023 2022 Customer E 13 % 12 % 13 % 14 %

BASIS OF PRESENTATION AND SIG_4

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Restricted Cash [Abstract]
Funded liquid margin account	$ 250,000	$ 30
Cash, Cash Equivalents and Restricted Cash [Abstract]
Cash and cash equivalents	5,772,124	10,446,532
Restricted cash	5,315,063	5,122,379
Total cash, cash equivalents, and restricted cash	11,087,187	$ 15,568,911	$ 17,025,291	$ 21,179,340
JPMorgan Chase Credit Facility [Member]
Restricted Cash [Abstract]
Borrowing capacity	$ 5,000,000

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, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2023 USD ($) Segment	Dec. 31, 2022 USD ($)
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	$ 7,905,639	$ 10,366,122	$ 12,858,662	$ 17,740,204
Product line cost of goods sold	5,049,947	6,071,775	8,058,454	10,157,785
Depreciation and amortization	178,729	171,189	357,019	308,900
Capital expenditures	278,250	186,883	495,302	617,283
Product Line [Member]
Summary Information by Reportable Segment [Abstract]
Product line cost of goods sold	4,119,509	5,056,581	6,318,050	8,488,904
Product line gross profit	3,786,130	5,309,541	6,540,612	9,251,300
Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	7,391,352	8,436,208	11,692,611	13,976,614
Product line cost of goods sold	3,918,516	4,185,331	5,877,683	6,792,031
Product line gross profit	3,472,836	4,250,877	5,814,928	7,184,583
Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	514,287	1,929,914	1,166,051	3,763,590
Product line cost of goods sold	200,993	871,250	440,367	1,696,873
Product line gross profit	313,294	1,058,664	725,684	2,066,717
Operating and Reportable Segments [Member] | Online Channels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	6,654,217	7,845,828	10,570,904	12,698,314
Product line cost of goods sold	3,489,163	3,709,482	5,164,741	5,842,292
Product line gross profit	3,165,054	4,136,346	5,406,163	6,856,022
Depreciation and amortization	45,392	56,505	94,151	119,892
Capital expenditures	179,559	22,620	299,704	159,608
Operating and Reportable Segments [Member] | Online Channels [Member] | Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	6,343,510	7,123,440	9,940,523	11,527,029
Product line cost of goods sold	3,392,715	3,446,197	4,968,315	5,416,308
Product line gross profit	2,950,795	3,677,243	4,972,208	6,110,721
Operating and Reportable Segments [Member] | Online Channels [Member] | Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	310,707	722,388	630,381	1,171,285
Product line cost of goods sold	96,448	263,285	196,426	425,984
Product line gross profit	214,259	459,103	433,955	745,301
Operating and Reportable Segments [Member] | Traditional [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,251,422	2,520,294	2,287,758	5,041,890
Product line cost of goods sold	630,346	1,347,099	1,153,309	2,646,612
Product line gross profit	621,076	1,173,195	1,134,449	2,395,278
Depreciation and amortization	133,337	114,684	262,868	189,008
Capital expenditures	98,691	164,263	195,598	457,675
Operating and Reportable Segments [Member] | Traditional [Member] | Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,047,842	1,312,768	1,752,088	2,449,585
Product line cost of goods sold	525,801	739,134	909,368	1,375,723
Product line gross profit	522,041	573,634	842,720	1,073,862
Operating and Reportable Segments [Member] | Traditional [Member] | Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	203,580	1,207,526	535,670	2,592,305
Product line cost of goods sold	104,545	607,965	243,941	1,270,889
Product line gross profit	$ 99,035	$ 599,561	$ 291,729	$ 1,321,416

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, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	$ 5,049,947	$ 6,071,775	$ 8,058,454	$ 10,157,785
Inventory write-downs			0	119,000
Product Line [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	4,119,509	5,056,581	6,318,050	8,488,904
Segment Reconciling Item [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	930,438	1,015,194	1,740,404	1,668,881
Non-capitalized manufacturing and production control expenses	664,578	686,834	1,262,463	1,063,887
Freight out	338,249	358,617	542,465	634,354
Inventory write-downs	0	0	0	119,000
Other inventory adjustments	$ (72,389)	$ (30,257)	$ (64,524)	$ (148,360)

SEGMENT INFORMATION AND GEOGR_5

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Gross Profit (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Reconciliation of Gross Profit [Abstract]
Non-allocated cost of goods sold	$ (5,049,947)	$ (6,071,775)	$ (8,058,454)	$ (10,157,785)
Sales and marketing	(4,296,324)	(4,339,684)	(7,018,289)	(7,447,630)
General and administrative	(1,497,061)	(1,187,955)	(3,351,329)	(2,601,431)
Other income (expense) net	71,788	59,574	164,048	99,776
Loss before income taxes	(2,865,905)	(1,173,718)	(5,405,362)	(2,366,866)
Product Line [Member]
Reconciliation of Gross Profit [Abstract]
Product line gross profit	3,786,130	5,309,541	6,540,612	9,251,300
Non-allocated cost of goods sold	(4,119,509)	(5,056,581)	(6,318,050)	(8,488,904)
Segment Reconciling Item [Member]
Reconciliation of Gross Profit [Abstract]
Non-allocated cost of goods sold	(930,438)	(1,015,194)	(1,740,404)	(1,668,881)
Sales and marketing	(4,296,324)	(4,339,684)	(7,018,289)	(7,447,630)
General and administrative	(1,497,061)	(1,187,955)	(3,351,329)	(2,601,431)
Other income (expense) net	$ 71,788	$ 59,574	$ 164,048	$ 99,776

SEGMENT INFORMATION AND GEOGR_6

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Net Sales by Geographic Area (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Net Sales by Geographic Area [Abstract]
Net sales	$ 7,905,639	$ 10,366,122	$ 12,858,662	$ 17,740,204
Reportable Geographical Component [Member] | United States [Member]
Net Sales by Geographic Area [Abstract]
Net sales	7,742,776	9,989,702	12,511,686	17,085,074
Reportable Geographical Component [Member] | International [Member]
Net Sales by Geographic Area [Abstract]
Net sales	$ 162,863	$ 376,420	$ 346,976	$ 655,130

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Dec. 31, 2023	Jun. 30, 2023
Non-Recurring [Member]
Fair Value Measurements [Abstract]
Assets	$ 0	$ 0

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Dec. 31, 2023	Jun. 30, 2023
Inventories [Abstract]
Total supplies inventory	$ 268,892	$ 326,834
Total inventory	25,762,435	26,753,576
Short-term portion	9,879,556	7,476,046
Long-term portion	15,882,879	19,277,530
Work-in-process inventories issued to active production jobs	1,200,000	1,990,000
Finished Jewelry [Member]
Inventories [Abstract]
Raw materials	1,409,122	1,288,906
Work-in-process	623,300	1,223,670
Finished goods	12,914,517	12,772,611
Finished goods on consignment	2,095,443	2,039,506
Total	17,042,382	17,324,693
Loose Jewels [Member]
Inventories [Abstract]
Raw materials	174,274	421,603
Work-in-process	5,450,946	6,131,853
Finished goods	2,627,706	2,294,270
Finished goods on consignment	198,235	254,323
Total	$ 8,451,161	$ 9,102,049

NOTE RECEIVABLE (Details)

NOTE RECEIVABLE (Details) - Convertible Promissory Note [Member] - USD ($)	Dec. 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 ($)	Dec. 31, 2023	Jun. 30, 2023
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Deferred revenue	$ 432,235	$ 566,896
Accrued compensation and related benefits	371,423	382,630
Accrued sales tax and franchise tax	246,163	202,091
Accrued cooperative advertising	352,295	243,861
Other accrued expenses	2,709	1
Total accrued expenses and other liabilities	$ 1,404,825	$ 1,395,479

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES [Abstract]
Combined federal and state statutory tax rate	22.94%		22.94%
Federal income tax rate	21%		21%
Blended state income tax rate	1.94%		1.94%
Effective tax rate	0%	11.24%	0%	18.37%
Income tax benefit	$ 0	$ 131,937	$ 0	$ 434,893

COMMITMENTS AND CONTINGENCIES,

COMMITMENTS AND CONTINGENCIES, Lease Arrangements (Details)		3 Months Ended		6 Months Ended
	Jan. 29, 2021 USD ($)	Dec. 31, 2023 USD ($) ft²	Dec. 31, 2022 USD ($)	Dec. 31, 2023 USD ($) ft²	Dec. 31, 2022 USD ($)	Jun. 30, 2023 USD ($)
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		1,872,832		1,872,832		$ 2,183,232
Operating Lease Liabilities [Abstract]
Current operating lease liabilities		892,147		892,147		880,126
Noncurrent operating lease liabilities		1,631,724		1,631,724		2,047,742
Total operating lease liabilities		2,523,871		2,523,871
Operating lease cost		$ 175,000	$ 175,000	$ 349,000	$ 349,000
Assumed discount rate		2.81%		2.81%
Remaining operating lease term		2 years 9 months 29 days		2 years 9 months 29 days
Future Lease Payments Under Operating Leases [Abstract]
2024		$ 450,852		$ 450,852
2025		918,236		918,236
2026		943,487		943,487
2027		317,327		317,327
Total lease payments		2,629,902		2,629,902
Less: imputed interest		106,031		106,031
Total operating lease liabilities		2,523,871		2,523,871
Less: current lease obligations		892,147		892,147		880,126
Total long-term lease obligations		1,631,724		1,631,724		$ 2,047,742
Cash paid for operating leases		$ 241,000	$ 235,000	$ 479,000	$ 466,000

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES, Purchase Commitments (Details) $ in Thousands	6 Months Ended		12 Months Ended
	Dec. 31, 2023 USD ($) Option	Dec. 31, 2022 USD ($)	Dec. 31, 2023 USD ($)	Jul. 28, 2023 USD ($)	Jun. 30, 2023 USD ($)
Breach of Contract for Purchase of SiC Materials [Member]
Purchase Commitments [Abstract]
Alleged unpaid purchases					$ 3,300
Alleged damages				$ 18,500
SiC Materials [Member]
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
Minimum annual purchase commitments					$ 4,250
Purchases	0	$ 1,800	0
SiC Materials [Member] | Minimum [Member]
Purchase Commitments [Abstract]
Minimum annual purchase commitments	4,000		4,000
SiC Materials [Member] | Maximum [Member]
Purchase Commitments [Abstract]
Minimum annual purchase commitments	$ 10,000		$ 10,000

DEBT (Details)

DEBT (Details) - USD ($)				6 Months Ended
	Jun. 21, 2023	Jul. 28, 2022	Jul. 12, 2021	Dec. 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				$ 5,100,000
Interest rate premium in excess of rate otherwise applicable charged during an event of default				3%
Non-refundable origination fee	$ 0	$ 0	$ 10,000
JPMorgan Chase Credit Facility [Member] | Maximum [Member]
Line of Credit [Abstract]
Excess availability				$ 5,000,000
JPMorgan Chase Credit Facility [Member] | SOFR Rate [Member]
Line of Credit [Abstract]
Basis spread on variable rate				1.25%
Interest rate adjustment				0.10%

SHAREHOLDERS' EQUITY AND STOC_3

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Repurchases of Common Stock (Details) - USD ($)	3 Months Ended	6 Months Ended
	Sep. 30, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023	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
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, 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		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Stock-Based Compensation [Abstract]
Employee stock options	$ 67,174	$ 49,704	$ 118,618	$ 122,202
Restricted stock awards	0	28,789	0	52,523
Totals	67,174	78,493	118,618	174,725
Stock-based compensation capitalized as 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, 2023	Dec. 31, 2022
Stock Option Activity [Roll Forward]
Outstanding, beginning balance (in shares)	1,817,665
Granted (in shares)	1,058,612
Forfeited (in shares)	(25,166)
Expired (in shares)	(99,334)
Outstanding, ending balance (in shares)	2,751,777
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 1.24
Granted (in dollars per share)	0.35
Forfeited (in dollars per share)	1.88
Expired (in dollars per share)	2.05
Outstanding, ending balance (in dollars per share)	0.86
Fair Value of Stock Options [Abstract]
Fair value of stock options (in dollars per share)	$ 0.21	$ 0.59
Fair value of stock options vested	$ 188	$ 176

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, 2023	Dec. 31, 2022	Jun. 30, 2023
Stock Options Outstanding and Exercisable [Abstract]
Options outstanding, balance as of end of period (in shares)	2,751,777		1,817,665
Options outstanding, weighted average remaining contractual life	7 years 5 months 1 day
Options outstanding, weighted average exercise price (in dollars per share)	$ 0.86		$ 1.24
Options exercisable, balance as of end of period (in shares)	1,734,641
Options exercisable, weighted average remaining contractual life	6 years 21 days
Options exercisable, weighted average exercise price (in dollars per share)	$ 1.06
Options Vested or Expected to Vest [Abstract]
Options vested or expected to vest, balance as of end of period (in shares)	2,683,732
Options vested or expected to vest, weighted average remaining contractual life	7 years 4 months 9 days
Options vested or expected to vest, weighted average exercise price (in dollars per share)	$ 0.87
Unrecognized Stock-Based Compensation Expense [Abstract]
Unrecognized stock-based compensation expense	$ 248
Unrecognized stock-based compensation expense, period for recognition	15 months
Options outstanding, aggregate intrinsic value	$ 59	$ 57
Options exercisable, aggregate intrinsic value	59	57
Options vested or expected to vest, aggregate intrinsic value	$ 59	$ 57
Exercised (in shares)	0	0

SHAREHOLDERS' EQUITY AND STOC_8

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Restricted Stock (Details) - Restricted Stock [Member] - $ / shares	3 Months Ended	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Restricted Stock [Abstract]
Shares awarded (in shares)		0
Unvested shares (in shares)			178,750
Weighted average grant date fair value of unvested shares (in dollars per share)			$ 0.97
Shared vested (in shares)	0
Shares cancelled (in shares)	178,750

NET LOSS PER COMMON SHARE (Deta

NET LOSS PER COMMON SHARE (Details) - shares	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Stock Options [Member]
Net Loss per Common Share [Abstract]
Shares excluded from the computation of diluted net income per common share (in shares)	2,750,000	1,910,000	2,750,000	1,910,000
Restricted Stock [Member]
Net Loss per Common Share [Abstract]
Shares excluded from the computation of diluted net income per common share (in shares)		179,000		179,000

MAJOR CUSTOMERS AND CONCENTRA_3

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details)	3 Months Ended		6 Months Ended			12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023		Dec. 31, 2022	Jun. 30, 2023
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
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage			12%			24%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage			32%			14%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage				[1]		14%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer D [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage			16%				[2]
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer E [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage			15%				[2]
Net Sales [Member] | Customer Concentration Risk [Member] | Customer E [Member]
Major Customers and Concentration of Credit Risk [Abstract]
Concentration risk, percentage	13%	12%	13%		14%
[1]Customer C did not have a balance that represented 10% or more of total gross accounts receivable as of December 31, 2023.[2]Customers D and E did not have a balance that represented 10% or more of total gross accounts receivable as of June 30, 2023.