Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2024 | May 01, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2024 | |
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 | 30,344,955 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2024 | Jun. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 3,685,729 | $ 10,446,532 |
Restricted cash | 5,553,873 | 5,122,379 |
Accounts receivable, net | 566,570 | 380,085 |
Inventory, net | 10,439,754 | 7,476,046 |
Note receivable | 250,000 | 250,000 |
Prepaid expenses and other assets | 794,218 | 901,354 |
Total current assets | 21,290,144 | 24,576,396 |
Long-term assets: | ||
Inventory, net | 14,867,933 | 19,277,530 |
Property and equipment, net | 2,699,133 | 2,491,569 |
Intangible assets, net | 340,528 | 305,703 |
Operating lease right-of-use assets | 1,715,475 | 2,183,232 |
Other assets | 49,660 | 49,658 |
Total long-term assets | 19,672,729 | 24,307,692 |
TOTAL ASSETS | 40,962,873 | 48,884,088 |
Current liabilities: | ||
Accounts payable | 5,865,435 | 4,786,155 |
Short-term borrowings under line of credit | 500,000 | 0 |
Operating lease liabilities, current portion | 898,217 | 880,126 |
Accrued expenses and other liabilities | 1,356,264 | 1,395,479 |
Total current liabilities | 8,619,916 | 7,061,760 |
Long-term liabilities: | ||
Noncurrent operating lease liabilities | 1,417,478 | 2,047,742 |
Total long-term liabilities | 1,417,478 | 2,047,742 |
Total liabilities | 10,037,394 | 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 March 31, 2024 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 | 26,394,881 | 26,205,919 |
Treasury stock, at cost, 388,403 shares at both March 31, 2024 and June 30, 2023 | (489,979) | (489,979) |
Accumulated deficit | (52,221,634) | (43,183,565) |
Total shareholders' equity | 30,925,479 | 39,774,586 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 40,962,873 | $ 48,884,088 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | 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 | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
Net sales | $ 5,261,966 | $ 6,641,799 | $ 18,120,629 | $ 24,382,003 |
Costs and expenses: | ||||
Cost of goods sold | 4,076,081 | 4,493,125 | 12,134,535 | 14,650,910 |
Sales and marketing | 3,684,506 | 3,267,436 | 10,702,796 | 10,715,066 |
General and administrative | 1,199,511 | 1,053,357 | 4,550,841 | 3,654,788 |
Total costs and expenses | 8,960,098 | 8,813,918 | 27,388,172 | 29,020,764 |
Loss from operations | (3,698,132) | (2,172,119) | (9,267,543) | (4,638,761) |
Other income (expense): | ||||
Interest income | 74,528 | 69,159 | 244,146 | 168,935 |
Interest and other expense | (9,103) | 0 | (14,672) | 0 |
Total other income , net | 65,425 | 69,159 | 229,474 | 168,935 |
Loss before income taxes | (3,632,707) | (2,102,960) | (9,038,069) | (4,469,826) |
Income tax expense | 0 | (6,293,048) | 0 | (5,858,155) |
Net loss | $ (3,632,707) | $ (8,396,008) | $ (9,038,069) | $ (10,327,981) |
Net loss per common share: | ||||
Basic (in dollars per share) | $ (0.12) | $ (0.28) | $ (0.3) | $ (0.34) |
Diluted (in dollars per share) | $ (0.12) | $ (0.28) | $ (0.3) | $ (0.34) |
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 | 30,387,303 |
Diluted (in shares) | 30,344,955 | 30,344,954 | 30,344,955 | 30,387,303 |
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 | $ (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 | 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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 0 | 34,594 | 0 | 0 | $ 34,594 |
Net loss | 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 | ||||
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 | $ (9,038,069) | ||||
Balance at Mar. 31, 2024 | 57,242,211 | 26,394,881 | (489,979) | (52,221,634) | $ 30,925,479 |
Balance (in shares) at Mar. 31, 2024 | 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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 0 | 70,344 | 0 | 0 | $ 70,344 |
Net loss | 0 | 0 | 0 | (3,632,707) | (3,632,707) |
Balance at Mar. 31, 2024 | $ 57,242,211 | $ 26,394,881 | $ (489,979) | $ (52,221,634) | $ 30,925,479 |
Balance (in shares) at Mar. 31, 2024 | 30,344,955 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (9,038,069) | $ (10,327,981) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 530,161 | 477,285 |
Stock-based compensation | 188,961 | 209,319 |
(Recovery of) Provision for uncollectible accounts | 107,000 | (18,000) |
(Recovery of) Provision for sales returns | (160,000) | 59,000 |
Inventory write-downs | 0 | 119,000 |
Provision for accounts receivable discounts | 11,976 | 42 |
Deferred income taxes | 0 | 5,851,904 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (145,461) | 1,246,221 |
Inventory | 1,445,889 | 64,514 |
Prepaid expenses and other assets | 574,892 | 756,554 |
Accounts payable | 1,079,280 | (1,284,419) |
Accrued expenses and other liabilities | (651,388) | (980,909) |
Net cash used in operating activities | (6,056,759) | (3,827,470) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (723,256) | (884,030) |
Payments for intangible assets | (49,294) | (45,397) |
Net cash used in investing activities | (772,550) | (929,427) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from line of credit | 500,000 | 0 |
Repurchases of common stock | 0 | (451,815) |
Net cash provided by (used in) financing activities | 500,000 | (451,815) |
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (6,329,309) | (5,208,712) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | 15,568,911 | 21,179,340 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 9,239,602 | 15,970,628 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for income taxes | 16,486 | 5,900 |
Cash paid during the period for interest expense | $ 10,770 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Mar. 31, 2024 | |
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 gems and finished jewelry featuring moissanite, lab grown diamonds, and created color gems to leading jewelry distributors, manufacturers, and retailers at wholesale prices. In May 2023, the Company launched charlesandcolvarddirect.com, a wholesale sales portal Charles & Colvard Signature Showroom |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2024 | |
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, 2024 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 March 31, 2024 and for the three and nine months ended March 31, 2024 and 2023 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 March 31, 2024 and June 30, 2023 and for the three and nine months ended March 31, 2024 and 2023, 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, 2024 or 2023. All intercompany accounts have been eliminated. Nasdaq Listing Notification - On June 12, 2023, we received a notification letter from Nasdaq’s Listing Qualifications Department indicating that we are not in compliance with Nasdaq Listing Rule 5550 (a)(2), because the minimum bid price of our common stock on the Nasdaq Capital Market has closed below $1.00 per share for 30 consecutive business days. The notification letter has no immediate effect on the Nasdaq listing or trading in our common stock. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had 180 calendar days, or until December 11, 2023, to regain compliance with the minimum $1.00 bid price per share requirement. We received notice on December 12, 2023 from the Nasdaq’s Listing Qualifications Department which resulted in an additional 180-day period, or until June 10, 2024, within which to regain compliance with the $1.00 minimum bid price requirement. Going Concern - The Company’s accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of obligations in the normal course of business. However, for the nine months ended March 31, 2024, the Company had losses of $9.04 million and cash flow used in operations of $6.1 million. These factors and particularly our recent cash burn rate when combined with our existing cash and cash equivalents and availability of our short-term resources raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the financial statements are issued. The Company’s management is continuing to work on plans to fund operations to alleviate the conditions that raise substantial doubt by evaluating its financing arrangements, implementing cost savings actions to reduce cash outflow, and evaluating its ability to liquidate and convert to cash certain of the Company’s existing inventory totaling $25.31 million as of March 31, 2024. However, there can be no assurance that these plans will be successful or that additional financing will be available on terms acceptable to the Company. In view of these matters, continuation as a going concern is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financial requirements and the success of its future operations. The financial statements do not include any adjustments to the amount or the classification of assets and liabilities that may be necessary should the Company not continue as a going concern. Significant Accounting Policies Use of Estimates stock-based compensation, valuation allowance for deferred income tax assets, 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 March 31, 2024 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.” In accordance with the terms of the Company’s bank card/security agreement, entered into during the three months ended March 31, 2024 with a third-party financial service company that offers business credit cards, the Company is required to keep cash in an account held by the third-party totaling $250,000. Such amount is held as security for the Company’s bank card program with a credit limit of $500,000. Accordingly, this cash deposit held by the third party financial service company is classified as restricted cash for financial reporting purposes on the Company’s condensed consolidated balance sheets. 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, 2024 June 30, 2023 Cash and cash equivalents $ 3,685,729 $ 10,446,532 Restricted cash 5,553,873 5,122,379 Total cash, cash equivalents, and restricted cash $ 9,239,602 $ 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 | 9 Months Ended |
Mar. 31, 2024 | |
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 and excludes certain indirect supporting expenses from the Company’s manufacturing and production control departments, comprising personnel costs, and allocations for depreciation, leases, utilities, and corporate overhead; freight; 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 March 31, 2024 Online Channels Traditional Total Net sales Finished jewelry $ 3,840,382 $ 1,044,116 $ 4,884,498 Loose jewels 219,828 157,640 377,468 Total $ 4,060,210 $ 1,201,756 $ 5,261,966 Product line cost of goods sold Finished jewelry $ 1,980,096 $ 737,957 $ 2,718,053 Loose jewels 75,243 76,627 151,870 Total $ 2,055,339 $ 814,584 $ 2,869,923 Product line gross profit Finished jewelry $ 1,860,286 $ 306,159 $ 2,166,445 Loose jewels 144,585 81,013 225,598 Total $ 2,004,871 $ 387,172 $ 2,392,043 Depreciation and amortization $ 41,260 $ 131,882 $ 173,142 Capital expenditures $ 142,756 $ 85,198 $ 227,954 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 Depreciation and amortization $ 47,876 $ 120,509 $ 168,385 Capital expenditures $ 14,202 $ 252,545 $ 266,747 Nine Months Ended March 31, 2024 Online Channels Traditional Total Net sales Finished jewelry $ 13,780,906 $ 2,796,204 $ 16,577,110 Loose jewels 850,208 693,311 1,543,519 Total $ 14,631,114 $ 3,489,515 $ 18,120,629 Product line cost of goods sold Finished jewelry $ 6,948,411 $ 1,647,325 $ 8,595,736 Loose jewels 271,669 320,569 592,238 Total $ 7,220,080 $ 1,967,894 $ 9,187,974 Product line gross profit Finished jewelry $ 6,832,495 $ 1,148,879 $ 7,981,374 Loose jewels 578,539 372,742 951,281 Total $ 7,411,034 $ 1,521,621 $ 8,932,655 Depreciation and amortization $ 135,411 $ 394,750 $ 530,161 Capital expenditures $ 442,460 $ 280,796 $ 723,256 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 Depreciation and amortization $ 167,769 $ 309,516 $ 477,285 Capital expenditures $ 173,810 $ 710,220 $ 884,030 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, 2024 2023 2024 2023 Product line cost of goods sold $ 2,869,923 $ 3,485,580 $ 9,187,974 $ 11,974,485 Other indirect manufacturing and production control expenses and period costs 672,373 596,344 1,934,837 1,660,231 Freight out 286,526 216,817 828,990 851,171 Inventory write-downs - - - 119,000 Other inventory adjustments 247,259 194,384 182,734 46,023 Cost of goods sold $ 4,076,081 $ 4,493,125 $ 12,134,535 $ 14,650,910 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 March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Product line gross profit $ 2,392,043 $ 3,156,219 $ 8,932,655 $ 12,407,518 Other indirect manufacturing and production control expenses and period costs (1,206,158 ) (1,007,545 ) (2,946,561 ) (2,676,425 ) Sales and marketing (3,684,506 ) (3,267,436 ) (10,702,796 ) (10,715,066 ) General and administrative (1,199,511 ) (1,053,357 ) (4,550,841 ) (3,654,788 ) Other income (expense) net 65,425 69,159 229,474 168,935 Loss before income taxes $ (3,632,707 ) $ (2,102,960 ) $ (9,038,069 ) $ (4,469,826 ) 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, including charlesandcolvard.com, moissaniteoutlet.com, charlesandcolvarddirect.com and madeshopping.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 March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Net sales United States $ 5,188,939 $ 6,545,336 $ 17,700,626 $ 23,630,410 International 73,027 96,463 420,003 751,593 Total $ 5,261,966 $ 6,641,799 $ 18,120,629 $ 24,382,003 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Mar. 31, 2024 | |
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 the management of the Company. The financial instruments of the Company 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 March 31, 2024 or June 30, 2023. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Mar. 31, 2024 | |
INVENTORIES [Abstract] | |
INVENTORIES | 5. INVENTORIES The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: March 31, 2024 June 30, 2023 Finished jewelry: Raw materials $ 1,413,161 $ 1,288,906 Work-in-process 976,263 1,223,670 Finished goods 12,426,496 12,772,611 Finished goods on consignment 2,070,210 2,039,506 Total finished jewelry $ 16,886,130 $ 17,324,693 Loose jewels: Raw materials $ 109,876 $ 421,603 Work-in-process 5,149,485 6,131,853 Finished goods 2,715,318 2,294,270 Finished goods on consignment 199,289 254,323 Total loose jewels 8,173,968 9,102,049 Total supplies inventory 247,589 326,834 Total inventory $ 25,307,687 $ 26,753,576 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: March 31, 2024 June 30, 2023 Short-term portion $ 10,439,754 $ 7,476,046 Long-term portion 14,867,933 19,277,530 Total $ 25,307,687 $ 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 March 31, 2024 and June 30, 2023, work-in-process inventories issued to active production jobs approximated $1.43 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 its Online Channels segment. The Company also carries 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, 2024 | |
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, 2024 | |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | 7. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities, current, consist of the following as of the dates presented: March 31, 2024 June 30, 2023 Deferred revenue $ 470,075 $ 566,896 Accrued compensation and related benefits 372,223 382,630 Accrued sales taxes and franchise tax 204,806 202,091 Accrued cooperative advertising 306,174 243,861 Other accrued expenses 2,986 1 Total accrued expenses and other liabilities $ 1,356,264 $ 1,395,479 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2024 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 8. INCOME TAXES For the three and nine months ended March 31, 2024, 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 nine months ended March 31, 2024, the Company’s average effective tax rate was zero. 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%. 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 nine months ended March 31, 2024, compared with a net income tax expense, driven by the establishment of the valuation allowance, of approximately $6.29 million and $5.86 million for the three and nine months ended March 31, 2023, 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 March 31, 2024, 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 | 9 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES Lease Arrangements On December 9, 2013, the Company entered into a Lease Agreement, as amended on December 23, 2013, April 15, 2014, and January 29, 2021 (the “Lease Agreement”), for its corporate headquarters, which occupies approximately 36,350 square feet of office, storage and light manufacturing space and is classified as an operating lease for financial reporting purposes. The expiration date of the base term of the Lease Agreement in effect as of March 31, 2024 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, 2024, 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, 2024, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 1,715,475 Current operating lease liabilities $ 898,217 Noncurrent operating lease liabilities 1,417,478 Total operating lease liabilities $ 2,315,695 The Company’s total operating lease cost for the three months ended March 31, 2024 and 2023 was approximately $175,000 for each period. The Company’s total operating lease cost for the nine months ended March 31, 2024 and 2023 was approximately $524,000 for each period. As of March 31, 2024, 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 2.58 years. As of March 31, 2024, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2024 $ 225,426 2025 918,236 2026 943,487 2027 317,327 Total lease payments $ 2,404,476 Less: imputed interest (88,781 ) Present value of lease payments 2,315,695 Less: current lease obligations 898,217 Total long-term lease obligations $ 1,417,478 The Company makes cash payments for amounts included in the measurement of its lease liabilities. During the three months ended March 31, 2024 and 2023, cash paid for operating leases was approximately $251,000 and $237,000, respectivel y. During the nine months ended March 31, 2024 and 2023, cash paid for operating leases was approximately $730,000 and $704,000, 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 March 31, 2024. 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, 2024 the Company made no purchases of SiC crystals. During the nine months ended March 31, 2023 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 March 31, 2024, 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 | 9 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024, the Company had 500,000 in short-term outstanding debt on the line of credit . |
SHAREHOLDERS' EQUITY AND STOCK-
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION | 9 Months Ended |
Mar. 31, 2024 | |
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, 2024 the Company repurchased no shares of its common 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. Dividends The Company has paid no cash dividends during the current fiscal year through March 31, 2024. |
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, 2024 2023 2024 2023 Employee stock options $ 70,343 $ 63,383 $ 188,961 $ 185,585 Restricted stock awards - (28,789 ) - 23,734 Totals $ 70,343 $ 34,594 $ 188,961 $ 209,319 No stock-based compensation was capitalized as a cost of inventory during the three and nine months ended March 31, 2024 or 2023. Stock Options – The following is a summary of the stock option activity for the nine months ended March 31, 2024: Shares Weighted Average Exercise Price Outstanding, June 30, 2023 1,817,665 $ 1.24 Granted 1,178,612 $ 0.35 Forfeited (36,500 ) $ 1.47 Expired (100,000 ) $ 2.05 Outstanding, March 31, 2024 2,859,777 $ 0.84 T he weighted average grant date fair value of stock options granted during the nine months ended March 31, 2024 and 2023 was approximately $0.21 and $0.59, respectively. The total fair value of stock options that vested during the nine months ended March 31, 2024 and 2023 The following table summarizes information about stock options outstanding at March 31, 2024: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 03/31/2024 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 03/31/2024 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 03/31/2024 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,859,777 7.27 $ 0.84 1,793,488 5.90 $ 1.07 2,780,376 7.21 $ 0.85 As of March 31, 2024, the unrecognized stock-based compensation expense related to unvested stock options was approximately $200,390, 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 March 31, 2024 and 2023 was approximately $22,126 and $101,000 respectively. These amounts are before applicable income taxes and represent the closing market price of the Company’s common stock at March 31, 2024, 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 nine month periods ended March 31, 2024 and 2023 . Restricted Stock During the nine month period ended March 31, 2024 there were no restricted stock shares awarded to plan participants. The unvested restricted shares as of September 30, 2023, which 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 during the nine month period ended March 31, 2024, and these shares were canceled in the three month period ended as of December 31, 2023 as the underlying performance goals were not met . |
NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE | 9 Months Ended |
Mar. 31, 2024 | |
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 nine months ended March 31, 2024, 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 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. Approximately 179,000 shares of unvested restricted stock are excluded from the computation of diluted net loss for the three and nine months ended March 31, 2023 because the shares were performance-based and the underlying conditions had not been met as of March 31, 2023 |
MAJOR CUSTOMERS AND CONCENTRATI
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK | 9 Months Ended |
Mar. 31, 2024 | |
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. The following are reconciliations of the allowance for uncollectible accounts balances as of the periods presented: Nine Months Ended March 31, 2024 2023 Balance, beginning of period $ 183,000 $ 85,000 (Recoveries) Additions charged to operations 107,000 (18,000 ) Balance, end of period $ 290,000 $ 67,000 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, 2024 June 30, 2023 Customer A 24 % ** % Customer B 23 % 24 % Customer C 13 % ** % Customer D * % 14 % Customer E * % 14 % * Customers D and E did not have a balance that represented 10% or more of total gross accounts receivable as of March 31, 2024. ** Customers A and C 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 March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Customer C 13 % 13 % 13 % 14 % |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
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) | 9 Months Ended |
Mar. 31, 2024 | |
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, 2024 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 March 31, 2024 and for the three and nine months ended March 31, 2024 and 2023 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 March 31, 2024 and June 30, 2023 and for the three and nine months ended March 31, 2024 and 2023, 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, 2024 or 2023. All intercompany accounts have been eliminated. |
Use of Estimates | Use of Estimates stock-based compensation, valuation allowance for deferred income tax assets, 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 March 31, 2024 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.” In accordance with the terms of the Company’s bank card/security agreement, entered into during the three months ended March 31, 2024 with a third-party financial service company that offers business credit cards, the Company is required to keep cash in an account held by the third-party totaling $250,000. Such amount is held as security for the Company’s bank card program with a credit limit of $500,000. Accordingly, this cash deposit held by the third party financial service company is classified as restricted cash for financial reporting purposes on the Company’s condensed consolidated balance sheets. 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, 2024 June 30, 2023 Cash and cash equivalents $ 3,685,729 $ 10,446,532 Restricted cash 5,553,873 5,122,379 Total cash, cash equivalents, and restricted cash $ 9,239,602 $ 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) | 9 Months Ended |
Mar. 31, 2024 | |
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, 2024 June 30, 2023 Cash and cash equivalents $ 3,685,729 $ 10,446,532 Restricted cash 5,553,873 5,122,379 Total cash, cash equivalents, and restricted cash $ 9,239,602 $ 15,568,911 |
SEGMENT INFORMATION AND GEOGR_2
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract] | |
Summary Financial Information by Reportable Segment | Summary financial information by reportable segment is as follows: Three Months Ended March 31, 2024 Online Channels Traditional Total Net sales Finished jewelry $ 3,840,382 $ 1,044,116 $ 4,884,498 Loose jewels 219,828 157,640 377,468 Total $ 4,060,210 $ 1,201,756 $ 5,261,966 Product line cost of goods sold Finished jewelry $ 1,980,096 $ 737,957 $ 2,718,053 Loose jewels 75,243 76,627 151,870 Total $ 2,055,339 $ 814,584 $ 2,869,923 Product line gross profit Finished jewelry $ 1,860,286 $ 306,159 $ 2,166,445 Loose jewels 144,585 81,013 225,598 Total $ 2,004,871 $ 387,172 $ 2,392,043 Depreciation and amortization $ 41,260 $ 131,882 $ 173,142 Capital expenditures $ 142,756 $ 85,198 $ 227,954 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 Depreciation and amortization $ 47,876 $ 120,509 $ 168,385 Capital expenditures $ 14,202 $ 252,545 $ 266,747 Nine Months Ended March 31, 2024 Online Channels Traditional Total Net sales Finished jewelry $ 13,780,906 $ 2,796,204 $ 16,577,110 Loose jewels 850,208 693,311 1,543,519 Total $ 14,631,114 $ 3,489,515 $ 18,120,629 Product line cost of goods sold Finished jewelry $ 6,948,411 $ 1,647,325 $ 8,595,736 Loose jewels 271,669 320,569 592,238 Total $ 7,220,080 $ 1,967,894 $ 9,187,974 Product line gross profit Finished jewelry $ 6,832,495 $ 1,148,879 $ 7,981,374 Loose jewels 578,539 372,742 951,281 Total $ 7,411,034 $ 1,521,621 $ 8,932,655 Depreciation and amortization $ 135,411 $ 394,750 $ 530,161 Capital expenditures $ 442,460 $ 280,796 $ 723,256 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 Depreciation and amortization $ 167,769 $ 309,516 $ 477,285 Capital expenditures $ 173,810 $ 710,220 $ 884,030 |
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, 2024 2023 2024 2023 Product line cost of goods sold $ 2,869,923 $ 3,485,580 $ 9,187,974 $ 11,974,485 Other indirect manufacturing and production control expenses and period costs 672,373 596,344 1,934,837 1,660,231 Freight out 286,526 216,817 828,990 851,171 Inventory write-downs - - - 119,000 Other inventory adjustments 247,259 194,384 182,734 46,023 Cost of goods sold $ 4,076,081 $ 4,493,125 $ 12,134,535 $ 14,650,910 |
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 March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Product line gross profit $ 2,392,043 $ 3,156,219 $ 8,932,655 $ 12,407,518 Other indirect manufacturing and production control expenses and period costs (1,206,158 ) (1,007,545 ) (2,946,561 ) (2,676,425 ) Sales and marketing (3,684,506 ) (3,267,436 ) (10,702,796 ) (10,715,066 ) General and administrative (1,199,511 ) (1,053,357 ) (4,550,841 ) (3,654,788 ) Other income (expense) net 65,425 69,159 229,474 168,935 Loss before income taxes $ (3,632,707 ) $ (2,102,960 ) $ (9,038,069 ) $ (4,469,826 ) |
Net Sales by Geographic Area | The following presents net sales data by geographic area: Three Months Ended March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Net sales United States $ 5,188,939 $ 6,545,336 $ 17,700,626 $ 23,630,410 International 73,027 96,463 420,003 751,593 Total $ 5,261,966 $ 6,641,799 $ 18,120,629 $ 24,382,003 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
INVENTORIES [Abstract] | |
Inventories | The Company’s total inventories, net of reserves, consisted of the following as of the dates presented: March 31, 2024 June 30, 2023 Finished jewelry: Raw materials $ 1,413,161 $ 1,288,906 Work-in-process 976,263 1,223,670 Finished goods 12,426,496 12,772,611 Finished goods on consignment 2,070,210 2,039,506 Total finished jewelry $ 16,886,130 $ 17,324,693 Loose jewels: Raw materials $ 109,876 $ 421,603 Work-in-process 5,149,485 6,131,853 Finished goods 2,715,318 2,294,270 Finished goods on consignment 199,289 254,323 Total loose jewels 8,173,968 9,102,049 Total supplies inventory 247,589 326,834 Total inventory $ 25,307,687 $ 26,753,576 As of the dates presented, the Company’s total inventories, net of reserves, are classified as follows: March 31, 2024 June 30, 2023 Short-term portion $ 10,439,754 $ 7,476,046 Long-term portion 14,867,933 19,277,530 Total $ 25,307,687 $ 26,753,576 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities, current, consist of the following as of the dates presented: March 31, 2024 June 30, 2023 Deferred revenue $ 470,075 $ 566,896 Accrued compensation and related benefits 372,223 382,630 Accrued sales taxes and franchise tax 204,806 202,091 Accrued cooperative advertising 306,174 243,861 Other accrued expenses 2,986 1 Total accrued expenses and other liabilities $ 1,356,264 $ 1,395,479 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Balance Sheet Classifications of Leases | As of March 31, 2024, the Company’s balance sheet classifications of its leases are as follows: Operating Leases: Noncurrent operating lease ROU assets $ 1,715,475 Current operating lease liabilities $ 898,217 Noncurrent operating lease liabilities 1,417,478 Total operating lease liabilities $ 2,315,695 |
Remaining Future Payments Under Operating Leases | As of March 31, 2024, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows: 2024 $ 225,426 2025 918,236 2026 943,487 2027 317,327 Total lease payments $ 2,404,476 Less: imputed interest (88,781 ) Present value of lease payments 2,315,695 Less: current lease obligations 898,217 Total long-term lease obligations $ 1,417,478 |
SHAREHOLDERS' EQUITY AND STOC_2
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
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, 2024 2023 2024 2023 Employee stock options $ 70,343 $ 63,383 $ 188,961 $ 185,585 Restricted stock awards - (28,789 ) - 23,734 Totals $ 70,343 $ 34,594 $ 188,961 $ 209,319 |
Stock Option Activity | Stock Options – The following is a summary of the stock option activity for the nine months ended March 31, 2024: Shares Weighted Average Exercise Price Outstanding, June 30, 2023 1,817,665 $ 1.24 Granted 1,178,612 $ 0.35 Forfeited (36,500 ) $ 1.47 Expired (100,000 ) $ 2.05 Outstanding, March 31, 2024 2,859,777 $ 0.84 |
Stock Options Outstanding | The following table summarizes information about stock options outstanding at March 31, 2024: Options Outstanding Options Exercisable Options Vested or Expected to Vest Balance as of 03/31/2024 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 03/31/2024 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 03/31/2024 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,859,777 7.27 $ 0.84 1,793,488 5.90 $ 1.07 2,780,376 7.21 $ 0.85 |
MAJOR CUSTOMERS AND CONCENTRA_2
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract] | |
Reconciliation of Allowance for Uncollectible Accounts | The following are reconciliations of the allowance for uncollectible accounts balances as of the periods presented: Nine Months Ended March 31, 2024 2023 Balance, beginning of period $ 183,000 $ 85,000 (Recoveries) Additions charged to operations 107,000 (18,000 ) Balance, end of period $ 290,000 $ 67,000 |
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, 2024 June 30, 2023 Customer A 24 % ** % Customer B 23 % 24 % Customer C 13 % ** % Customer D * % 14 % Customer E * % 14 % * Customers D and E did not have a balance that represented 10% or more of total gross accounts receivable as of March 31, 2024. ** Customers A and C 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 March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Customer C 13 % 13 % 13 % 14 % |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||
Net loss | $ (3,632,707) | $ (2,865,905) | $ (2,539,457) | $ (8,396,008) | $ (1,041,781) | $ (890,192) | $ (9,038,069) | $ (10,327,981) | ||
Net cash used in operating activities | (6,056,759) | (3,827,470) | ||||||||
Inventory, net | 25,307,687 | 25,307,687 | $ 26,753,576 | |||||||
Restricted Cash [Abstract] | ||||||||||
Funded liquid margin account | 250,000 | 250,000 | 30 | |||||||
Cash held in securities account for bank card program | 250,000 | 250,000 | ||||||||
Credit limit under bank card program | 500,000 | 500,000 | ||||||||
Cash, Cash Equivalents and Restricted Cash [Abstract] | ||||||||||
Cash and cash equivalents | 3,685,729 | 3,685,729 | 10,446,532 | |||||||
Restricted cash | 5,553,873 | 5,553,873 | 5,122,379 | |||||||
Total cash, cash equivalents, and restricted cash | 9,239,602 | $ 15,970,628 | 9,239,602 | $ 15,970,628 | $ 15,568,911 | $ 21,179,340 | ||||
JPMorgan Chase Credit Facility [Member] | ||||||||||
Restricted Cash [Abstract] | ||||||||||
Borrowing capacity | $ 5,000,000 | $ 5,000,000 |
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, 2024 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) Segment | Mar. 31, 2023 USD ($) | |
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 | $ 5,261,966 | $ 6,641,799 | $ 18,120,629 | $ 24,382,003 |
Product line cost of goods sold | 4,076,081 | 4,493,125 | 12,134,535 | 14,650,910 |
Depreciation and amortization | 173,142 | 168,385 | 530,161 | 477,285 |
Capital expenditures | 227,954 | 266,747 | 723,256 | 884,030 |
Product Line [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Product line cost of goods sold | 2,869,923 | 3,485,580 | 9,187,974 | 11,974,485 |
Product line gross profit | 2,392,043 | 3,156,219 | 8,932,655 | 12,407,518 |
Finished Jewelry [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 4,884,498 | 5,321,301 | 16,577,110 | 19,297,915 |
Product line cost of goods sold | 2,718,053 | 2,840,321 | 8,595,736 | 9,632,352 |
Product line gross profit | 2,166,445 | 2,480,980 | 7,981,374 | 9,665,563 |
Loose Jewels [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 377,468 | 1,320,498 | 1,543,519 | 5,084,088 |
Product line cost of goods sold | 151,870 | 645,259 | 592,238 | 2,342,133 |
Product line gross profit | 225,598 | 675,239 | 951,281 | 2,741,955 |
Operating and Reportable Segments [Member] | Online Channels [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 4,060,210 | 4,616,398 | 14,631,114 | 17,314,712 |
Product line cost of goods sold | 2,055,339 | 2,077,649 | 7,220,080 | 7,919,941 |
Product line gross profit | 2,004,871 | 2,538,749 | 7,411,034 | 9,394,771 |
Depreciation and amortization | 41,260 | 47,876 | 135,411 | 167,769 |
Capital expenditures | 142,756 | 14,202 | 442,460 | 173,810 |
Operating and Reportable Segments [Member] | Online Channels [Member] | Finished Jewelry [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 3,840,382 | 4,130,314 | 13,780,906 | 15,657,343 |
Product line cost of goods sold | 1,980,096 | 1,880,504 | 6,948,411 | 7,296,812 |
Product line gross profit | 1,860,286 | 2,249,810 | 6,832,495 | 8,360,531 |
Operating and Reportable Segments [Member] | Online Channels [Member] | Loose Jewels [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 219,828 | 486,084 | 850,208 | 1,657,369 |
Product line cost of goods sold | 75,243 | 197,145 | 271,669 | 623,129 |
Product line gross profit | 144,585 | 288,939 | 578,539 | 1,034,240 |
Operating and Reportable Segments [Member] | Traditional [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 1,201,756 | 2,025,401 | 3,489,515 | 7,067,291 |
Product line cost of goods sold | 814,584 | 1,407,931 | 1,967,894 | 4,054,544 |
Product line gross profit | 387,172 | 617,470 | 1,521,621 | 3,012,747 |
Depreciation and amortization | 131,882 | 120,509 | 394,750 | 309,516 |
Capital expenditures | 85,198 | 252,545 | 280,796 | 710,220 |
Operating and Reportable Segments [Member] | Traditional [Member] | Finished Jewelry [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 1,044,116 | 1,190,987 | 2,796,204 | 3,640,572 |
Product line cost of goods sold | 737,957 | 959,817 | 1,647,325 | 2,335,540 |
Product line gross profit | 306,159 | 231,170 | 1,148,879 | 1,305,032 |
Operating and Reportable Segments [Member] | Traditional [Member] | Loose Jewels [Member] | ||||
Summary Information by Reportable Segment [Abstract] | ||||
Net sales | 157,640 | 834,414 | 693,311 | 3,426,719 |
Product line cost of goods sold | 76,627 | 448,114 | 320,569 | 1,719,004 |
Product line gross profit | $ 81,013 | $ 386,300 | $ 372,742 | $ 1,707,715 |
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, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Reconciliation of Cost of Goods Sold [Abstract] | ||||
Cost of goods sold | $ 4,076,081 | $ 4,493,125 | $ 12,134,535 | $ 14,650,910 |
Inventory write-downs | 0 | 119,000 | ||
Product Line [Member] | ||||
Reconciliation of Cost of Goods Sold [Abstract] | ||||
Cost of goods sold | 2,869,923 | 3,485,580 | 9,187,974 | 11,974,485 |
Segment Reconciling Item [Member] | ||||
Reconciliation of Cost of Goods Sold [Abstract] | ||||
Other indirect manufacturing and production control expenses and period costs | 672,373 | 596,344 | 1,934,837 | 1,660,231 |
Freight out | 286,526 | 216,817 | 828,990 | 851,171 |
Inventory write-downs | 0 | 0 | 0 | 119,000 |
Other inventory adjustments | $ 247,259 | $ 194,384 | $ 182,734 | $ 46,023 |
SEGMENT INFORMATION AND GEOGR_5
SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Gross Profit (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Reconciliation of Gross Profit [Abstract] | ||||
Sales and marketing | $ (3,684,506) | $ (3,267,436) | $ (10,702,796) | $ (10,715,066) |
General and administrative | (1,199,511) | (1,053,357) | (4,550,841) | (3,654,788) |
Other income (expense) net | 65,425 | 69,159 | 229,474 | 168,935 |
Loss before income taxes | (3,632,707) | (2,102,960) | (9,038,069) | (4,469,826) |
Product Line [Member] | ||||
Reconciliation of Gross Profit [Abstract] | ||||
Product line gross profit | 2,392,043 | 3,156,219 | 8,932,655 | 12,407,518 |
Segment Reconciling Item [Member] | ||||
Reconciliation of Gross Profit [Abstract] | ||||
Other indirect manufacturing and production control expenses and period cost | (1,206,158) | (1,007,545) | (2,946,561) | (2,676,425) |
Sales and marketing | (3,684,506) | (3,267,436) | (10,702,796) | (10,715,066) |
General and administrative | (1,199,511) | (1,053,357) | (4,550,841) | (3,654,788) |
Other income (expense) net | $ 65,425 | $ 69,159 | $ 229,474 | $ 168,935 |
SEGMENT INFORMATION AND GEOGR_6
SEGMENT INFORMATION AND GEOGRAPHIC DATA, Net Sales by Geographic Area (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Net Sales by Geographic Area [Abstract] | ||||
Net sales | $ 5,261,966 | $ 6,641,799 | $ 18,120,629 | $ 24,382,003 |
Reportable Geographical Component [Member] | United States [Member] | ||||
Net Sales by Geographic Area [Abstract] | ||||
Net sales | 5,188,939 | 6,545,336 | 17,700,626 | 23,630,410 |
Reportable Geographical Component [Member] | International [Member] | ||||
Net Sales by Geographic Area [Abstract] | ||||
Net sales | $ 73,027 | $ 96,463 | $ 420,003 | $ 751,593 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Mar. 31, 2024 | Jun. 30, 2023 |
Non-Recurring [Member] | ||
Fair Value Measurements [Abstract] | ||
Assets | $ 0 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 31, 2024 | Jun. 30, 2023 |
Inventories [Abstract] | ||
Total supplies inventory | $ 247,589 | $ 326,834 |
Total inventory | 25,307,687 | 26,753,576 |
Short-term portion | 10,439,754 | 7,476,046 |
Long-term portion | 14,867,933 | 19,277,530 |
Work-in-process inventories issued to active production jobs | 1,430,000 | 1,990,000 |
Finished Jewelry [Member] | ||
Inventories [Abstract] | ||
Raw materials | 1,413,161 | 1,288,906 |
Work-in-process | 976,263 | 1,223,670 |
Finished goods | 12,426,496 | 12,772,611 |
Finished goods on consignment | 2,070,210 | 2,039,506 |
Total | 16,886,130 | 17,324,693 |
Loose Jewels [Member] | ||
Inventories [Abstract] | ||
Raw materials | 109,876 | 421,603 |
Work-in-process | 5,149,485 | 6,131,853 |
Finished goods | 2,715,318 | 2,294,270 |
Finished goods on consignment | 199,289 | 254,323 |
Total | $ 8,173,968 | $ 9,102,049 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - Convertible Promissory Note [Member] - USD ($) | Mar. 31, 2024 | 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, 2024 | Jun. 30, 2023 |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ||
Deferred revenue | $ 470,075 | $ 566,896 |
Accrued compensation and related benefits | 372,223 | 382,630 |
Accrued sales taxes and franchise tax | 204,806 | 202,091 |
Accrued cooperative advertising | 306,174 | 243,861 |
Other accrued expenses | 2,986 | 1 |
Total accrued expenses and other liabilities | $ 1,356,264 | $ 1,395,479 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
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% | (131.06%) | 0% | (131.06%) |
Income tax expense | $ 0 | $ (6,293,048) | $ 0 | $ (5,858,155) |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, Lease Arrangements (Details) | 3 Months Ended | 9 Months Ended | ||||
Jan. 29, 2021 USD ($) | Mar. 31, 2024 USD ($) ft² | Mar. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) ft² | Mar. 31, 2023 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 | 1,715,475 | 1,715,475 | $ 2,183,232 | |||
Operating Lease Liabilities [Abstract] | ||||||
Current operating lease liabilities | 898,217 | 898,217 | 880,126 | |||
Noncurrent operating lease liabilities | 1,417,478 | 1,417,478 | 2,047,742 | |||
Total operating lease liabilities | 2,315,695 | 2,315,695 | ||||
Operating lease cost | $ 175,000 | $ 175,000 | $ 524,000 | $ 524,000 | ||
Assumed discount rate | 2.81% | 2.81% | ||||
Remaining operating lease term | 2 years 6 months 29 days | 2 years 6 months 29 days | ||||
Future Lease Payments Under Operating Leases [Abstract] | ||||||
2024 | $ 225,426 | $ 225,426 | ||||
2025 | 918,236 | 918,236 | ||||
2026 | 943,487 | 943,487 | ||||
2027 | 317,327 | 317,327 | ||||
Total lease payments | 2,404,476 | 2,404,476 | ||||
Less: imputed interest | (88,781) | (88,781) | ||||
Total operating lease liabilities | 2,315,695 | 2,315,695 | ||||
Less: current lease obligations | 898,217 | 898,217 | 880,126 | |||
Total long-term lease obligations | 1,417,478 | 1,417,478 | $ 2,047,742 | |||
Cash paid for operating leases | $ 251,000 | $ 237,000 | $ 730,000 | $ 704,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES, Purchase Commitments (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2024 USD ($) Option | Mar. 31, 2023 USD ($) | Mar. 31, 2024 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 ($) | 9 Months Ended | ||||
Jun. 21, 2023 | Jul. 28, 2022 | Jul. 12, 2021 | Mar. 31, 2024 | Jun. 30, 2023 | |
Line of Credit [Abstract] | |||||
Short-term outstanding debt under line of credit | $ 500,000 | $ 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 | 9 Months Ended | |||
Sep. 30, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | 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) | 9 Months Ended |
Mar. 31, 2024 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, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Stock-Based Compensation [Abstract] | ||||
Employee stock options | $ 70,343 | $ 63,383 | $ 188,961 | $ 185,585 |
Restricted stock awards | 0 | (28,789) | 0 | 23,734 |
Totals | 70,343 | 34,594 | 188,961 | 209,319 |
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 | 9 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Stock Option Activity [Roll Forward] | ||
Outstanding, beginning balance (in shares) | 1,817,665 | |
Granted (in shares) | 1,178,612 | |
Forfeited (in shares) | (36,500) | |
Expired (in shares) | (100,000) | |
Outstanding, ending balance (in shares) | 2,859,777 | |
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) | 1.47 | |
Expired (in dollars per share) | 2.05 | |
Outstanding, ending balance (in dollars per share) | 0.84 | |
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 | $ 224 | $ 225 |
SHAREHOLDERS' EQUITY AND STOC_7
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Options Outstanding (Details) - Stock Options [Member] - USD ($) | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Jun. 30, 2023 | |
Stock Options Outstanding and Exercisable [Abstract] | |||
Options outstanding, balance as of end of period (in shares) | 2,859,777 | 1,817,665 | |
Options outstanding, weighted average remaining contractual life | 7 years 3 months 7 days | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 0.84 | $ 1.24 | |
Options exercisable, balance as of end of period (in shares) | 1,793,488 | ||
Options exercisable, weighted average remaining contractual life | 5 years 10 months 24 days | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 1.07 | ||
Options Vested or Expected to Vest [Abstract] | |||
Options vested or expected to vest, balance as of end of period (in shares) | 2,780,376 | ||
Options vested or expected to vest, weighted average remaining contractual life | 7 years 2 months 15 days | ||
Options vested or expected to vest, weighted average exercise price (in dollars per share) | $ 0.85 | ||
Unrecognized Stock-Based Compensation Expense [Abstract] | |||
Unrecognized stock-based compensation expense | $ 200,390 | ||
Unrecognized stock-based compensation expense, period for recognition | 15 months | ||
Options outstanding, aggregate intrinsic value | $ 22,126,000 | $ 101,000 | |
Options exercisable, aggregate intrinsic value | 22,126,000 | 101,000 | |
Options vested or expected to vest, aggregate intrinsic value | $ 22,126,000 | $ 101,000 | |
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 | 9 Months Ended | |
Dec. 31, 2023 | Mar. 31, 2024 | Sep. 30, 2023 | |
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 | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
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 | 1,900,000 | 2,750,000 | 1,900,000 |
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) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | 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 | ||||||
Allowance for Uncollectible Accounts [Member] | |||||||
Accounts Receivable Reserves [Roll Forward] | |||||||
Balance, beginning of period | $ 183,000 | $ 85,000 | $ 85,000 | ||||
(Recoveries) Additions charged to operations | 107,000 | (18,000) | |||||
Balance, end of period | $ 290,000 | $ 67,000 | $ 290,000 | $ 67,000 | $ 183,000 | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||||
Major Customers and Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 24% | [1] | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||||
Major Customers and Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 23% | 24% | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||||
Major Customers and Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 13% | [1] | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||||||
Major Customers and Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | [2] | 14% | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer E [Member] | |||||||
Major Customers and Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | [2] | 14% | |||||
Net Sales [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||||
Major Customers and Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 13% | 13% | 13% | 14% | |||
[1]Customers A and C did not have a balance that represented 10% or more of total gross accounts receivable as of June 30, 2023.[2]Customers D and E did not have a balance that represented 10% or more of total gross accounts receivable as of March 31, 2024. |