0001140361-23-048055 | 10-K | XBRL Viewer

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SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Gross Profit (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Reconciliation of Gross Profit [Abstract]
Non-allocated cost of goods sold	$ (25,212,383)	$ (22,845,702)
Sales and marketing	(13,686,049)	(12,421,138)
General and administrative	(5,023,822)	(4,948,980)
Total other income, net	297,262	19,243
(Loss) Income before income taxes	(13,678,758)	2,892,447
Product [Member]
Reconciliation of Gross Profit [Abstract]
Product line gross profit	14,804,166	22,986,534
Non-allocated cost of goods sold	(15,142,068)	(20,102,490)
Segment Reconciling Item [Member]
Reconciliation of Gross Profit [Abstract]
Non-allocated cost of goods sold	(10,070,315)	(2,743,212)
Sales and marketing	(13,686,049)	(12,421,138)
General and administrative	(5,023,822)	(4,948,980)
Total other income, net	$ 297,262	$ 19,243

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

+ References

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+ Details

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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+ Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	12 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Property and Equipment [Abstract]
Property and equipment	$ 8,800,895	$ 7,571,803
Less accumulated depreciation	(6,309,326)	(5,670,627)
Property and equipment, net	2,491,569	1,901,176
Depreciation expense	639,000	471,000
Computer Software [Member]
Property and Equipment [Abstract]
Property and equipment	2,865,994	2,392,465
Machinery and Equipment [Member]
Property and Equipment [Abstract]
Property and equipment	1,203,585	1,182,171
Computer Hardware [Member]
Property and Equipment [Abstract]
Property and equipment	1,841,972	1,621,198
Leasehold Improvements [Member]
Property and Equipment [Abstract]
Property and equipment	2,213,330	1,847,227
Furniture and Fixtures [Member]
Property and Equipment [Abstract]
Property and equipment	$ 676,014	$ 528,742

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Equity Compensation Plans (Details) - shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Stock Options [Member]
Equity Compensation Plans [Abstract]
Options outstanding (in shares)	1,817,665	1,658,803	2,235,286
2018 Equity Incentive Plan [Member]
Equity Compensation Plans [Abstract]
Number of shares authorized (in shares)	3,300,000
Options outstanding (in shares)	1,261,331	1,101,211
2018 Equity Incentive Plan [Member] \| Stock Options [Member] \| Employees [Member]
Equity Compensation Plans [Abstract]
Vesting period	4 years
2018 Equity Incentive Plan [Member] \| Stock Options [Member] \| Employees [Member] \| Maximum [Member]
Equity Compensation Plans [Abstract]
Term	10 years
2018 Equity Incentive Plan [Member] \| Stock Options [Member] \| Independent Contractors [Member] \| Maximum [Member]
Equity Compensation Plans [Abstract]
Term	10 years
2018 Equity Incentive Plan [Member] \| Stock Options [Member] \| Board of Directors [Member]
Equity Compensation Plans [Abstract]
Vesting period	1 year
2018 Equity Incentive Plan [Member] \| Restricted Stock [Member] \| Employees [Member] \| Maximum [Member]
Equity Compensation Plans [Abstract]
Vesting period	4 years
2018 Equity Incentive Plan [Member] \| Restricted Stock [Member] \| Independent Contractors [Member] \| Maximum [Member]
Equity Compensation Plans [Abstract]
Vesting period	4 years
2008 Stock Incentive Plan [Member]
Equity Compensation Plans [Abstract]
Number of shares authorized (in shares)	6,000,000
Options outstanding (in shares)	556,334	557,592
2008 Stock Incentive Plan [Member] \| Stock Options [Member] \| Employees [Member]
Equity Compensation Plans [Abstract]
Vesting period	4 years
2008 Stock Incentive Plan [Member] \| Stock Options [Member] \| Employees [Member] \| Maximum [Member]
Equity Compensation Plans [Abstract]
Term	10 years
2008 Stock Incentive Plan [Member] \| Stock Options [Member] \| Independent Contractors [Member] \| Maximum [Member]
Equity Compensation Plans [Abstract]
Term	10 years
2008 Stock Incentive Plan [Member] \| Stock Options [Member] \| Board of Directors [Member]
Equity Compensation Plans [Abstract]
Vesting period	1 year
2008 Stock Incentive Plan [Member] \| Restricted Stock [Member] \| Employees [Member] \| Maximum [Member]
Equity Compensation Plans [Abstract]
Vesting period	4 years
2008 Stock Incentive Plan [Member] \| Restricted Stock [Member] \| Independent Contractors [Member] \| Maximum [Member]
Equity Compensation Plans [Abstract]
Vesting period	4 years

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)

12 Months Ended

Jun. 30, 2023

SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]

Summary Financial Information by Reportable Segment

Summary financial information by reportable segment for the periods presented is as follows:

	Year Ended June 30, 2023
	Online Channels		Traditional		Total
Net sales
Finished jewelry	$	19,607,941	$	4,377,673	$	23,985,614
Loose jewels		1,884,939		4,075,681		5,960,620
Total	$	21,492,880	$	8,453,354	$	29,946,234

Product line cost of goods sold
Finished jewelry	$	9,214,749	$	3,182,342	$	12,397,091
Loose jewels		705,576		2,039,401		2,744,977
Total	$	9,920,325	$	5,221,743	$	15,142,068

Product line gross profit
Finished jewelry	$	10,393,192	$	1,195,331	$	11,588,523
Loose jewels		1,179,363		2,036,280		3,215,643
Total	$	11,572,555	$	3,231,611	$	14,804,166

Depreciation and amortization	$	215,978	$	437,179	$	653,157

Capital expenditures	$	423,150	$	806,421	$	1,229,571

	Year Ended June 30, 2022
	Online Channels		Traditional		Total
Net sales
Finished jewelry	$	23,539,347	$	6,172,883	$	29,712,230
Loose jewels		3,240,702		10,136,092		13,376,794
Total	$	26,780,049	$	16,308,975	$	43,089,024

Product line cost of goods sold
Finished jewelry	$	9,837,830	$	4,094,870	$	13,932,700
Loose jewels		1,209,832		4,959,958		6,169,790
Total	$	11,047,662	$	9,054,828	$	20,102,490

Product line gross profit
Finished jewelry	$	13,701,517	$	2,078,013	$	15,779,530
Loose jewels		2,030,870		5,176,134		7,207,004
Total	$	15,732,387	$	7,254,147	$	22,986,534

Depreciation and amortization	$	235,643	$	243,665	$	479,308

Capital expenditures	$	305,586	$	1,190,885	$	1,496,471

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 consolidated financial statements is as follows:

	Year Ended June 30,
	2023		2022
Product line cost of goods sold	$	15,142,068	$	20,102,490
Non-capitalized manufacturing and production control expenses		2,210,494		1,661,207
Freight out		1,068,437		1,195,062
Inventory write-downs		6,004,000		195,000
Other inventory adjustments		787,384		(308,057	)
Cost of goods sold	$	25,212,383	$	22,845,702

Reconciliation of Product Line Gross Profit

A reconciliation of the Company’s consolidated product line gross profit to the Company’s consolidated net (loss) income before income taxes is as follows:

	Year Ended June 30,
	2023			2022
Product line gross profit	$	14,804,166		$	22,986,534
Non-allocated cost of goods sold		(10,070,315	)		(2,743,212	)
Sales and marketing		(13,686,049	)		(12,421,138	)
General and administrative		(5,023,822	)		(4,948,980	)
Total other income, net		297,262			19,243
(Loss) Income before income taxes	$	(13,678,758	)	$	2,892,447

Net Sales by Geographic Area

The following presents net sales data by geographic area for the periods presented:

	Year Ended June 30,
	2023		2022
Net sales
United States	$	29,056,696	$	41,138,538
International		889,538		1,950,486
Total	$	29,946,234	$	43,089,024

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details) - Customer Concentration Risk [Member]

12 Months Ended

Jun. 30, 2023

Jun. 30, 2022

Accounts Receivable [Member] | Customer A [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

24.00%

^[1]

Accounts Receivable [Member] | Customer B [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

14.00%

^[1]

Accounts Receivable [Member] | Customer C [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

14.00%

^[1]

Accounts Receivable [Member] | Customer D [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

^[2]

29.00%

Accounts Receivable [Member] | Customer E [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

^[2]

20.00%

Accounts Receivable [Member] | Customer F [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

^[2]

13.00%

Net Sales [Member] | Customer E [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

14.00%

[1]	Customers A, B, and C did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2022.
[2]	Customers D, E, and F did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2023.

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Repurchases of Common Stock (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Apr. 29, 2022
Repurchases of Common Stock [Abstract]
Period over which common stock can be repurchased	3 years
Common stock, par value (in dollars per share)	$ 0	$ 0
Repurchases of common stock (in shares)	358,116	30,287
Repurchases of common stock	$ 451,815	$ 38,164
Maximum [Member]
Repurchases of Common Stock [Abstract]
Authorized amount of common stock that can be repurchased			$ 5,000,000

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Total
Balance at Jun. 30, 2021	$ 56,057,109	$ 25,608,593	$ 0	$ (25,976,686)	$ 55,689,016
Balance (in shares) at Jun. 30, 2021					29,913,095
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	774,341	0	0	$ 774,341
Issuance of restricted stock	$ 0	0	0	0	0
Issuance of restricted stock (in shares)	242,725
Stock option exercises	$ 1,185,102	(426,443)	0	0	758,659
Stock option exercises (in shares)	622,226
Repurchases of common stock	$ 0	0	$ (38,164)	0	$ (38,164)
Repurchases of common stock (in shares)			(30,287)		(30,287)
Net (loss) income	0	0	$ 0	2,373,915	$ 2,373,915
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	249,428	0	0	$ 249,428
Issuance of restricted stock	$ 0	0	0	0	0
Issuance of restricted stock (in shares)	178,750
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)		(358,116)
Net (loss) income	0	0	$ 0	(19,580,794)	$ (19,580,794)
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

NOTE RECEIVABLE (Details) - Convertible Promissory Note [Member] - USD ($)	Jun. 30, 2023	Mar. 05, 2021
Note Receivable [Abstract]
Note receivable		$ 250,000
Interest rate	0.14%
Interest rate during event of default	5.00%
Percentage of per unit price of units purchased by investors	80.00%
Value used to compute equity securities received upon conversion	$ 33,500,000

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment (Details)	Jun. 30, 2023
Machinery and Equipment [Member] \| Minimum [Member]
Property and Equipment [Abstract]
Estimated useful life	5 years
Machinery and Equipment [Member] \| Maximum [Member]
Property and Equipment [Abstract]
Estimated useful life	12 years
Computer Hardware [Member] \| Minimum [Member]
Property and Equipment [Abstract]
Estimated useful life	3 years
Computer Hardware [Member] \| Maximum [Member]
Property and Equipment [Abstract]
Estimated useful life	5 years
Computer Software [Member]
Property and Equipment [Abstract]
Estimated useful life	3 years
Furniture and Fixtures [Member] \| Minimum [Member]
Property and Equipment [Abstract]
Estimated useful life	5 years
Furniture and Fixtures [Member] \| Maximum [Member]
Property and Equipment [Abstract]
Estimated useful life	10 years
Leasehold Improvements [Member]
Property and Equipment [Abstract]
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration]	us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (19,580,794)	$ 2,373,915
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	653,157	479,308
Stock-based compensation	249,428	774,341
Provision for uncollectible accounts	98,000	14,000
Recovery of sales returns	(23,000)	(84,000)
Inventory write-downs	6,004,000	195,000
Recovery of accounts receivable discounts	(4,496)	(4,285)
Deferred income taxes	5,851,904	498,926
Changes in operating assets and liabilities:
Accounts receivable	1,770,227	(484,457)
Inventory	755,224	(4,535,080)
Prepaid expenses and other assets, net	892,845	926,780
Accounts payable	384,926	1,626,856
Accrued income taxes	0	(9,878)
Accrued expenses and other liabilities	(926,512)	(1,198,873)
Net cash (used in) provided by operating activities	(3,875,091)	572,553
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,229,571)	(1,496,471)
Payments for intangible assets	(53,952)	(64,188)
Net cash used in investing activities	(1,283,523)	(1,560,659)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock	(451,815)	(38,164)
Stock option exercises	0	758,659
Net cash (used in) provided by financing activities	(451,815)	720,495
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(5,610,429)	(267,611)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR	21,179,340	21,446,951
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR	15,568,911	21,179,340
Supplemental disclosure of cash flow information:
Cash paid during the year for income taxes	$ 5,900	$ 0

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	Jun. 30, 2023	Jun. 30, 2022
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 29,946,234	$ 43,089,024
Costs and expenses:
Cost of goods sold	25,212,383	22,845,702
Sales and marketing	13,686,049	12,421,138
General and administrative	5,023,822	4,948,980
Total costs and expenses	43,922,254	40,215,820
(Loss) Income from operations	(13,976,020)	2,873,204
Other income (expense):
Interest income	297,262	19,277
Loss on foreign currency exchange	0	(34)
Total other income, net	297,262	19,243
(Loss) Income before income taxes	(13,678,758)	2,892,447
Income tax expense	(5,902,036)	(518,532)
Net (loss) income	$ (19,580,794)	$ 2,373,915
Net (loss) income per common share:
Basic (in dollars per share)	$ (0.64)	$ 0.08
Diluted (in dollars per share)	$ (0.64)	$ 0.08
Weighted average number of shares used in computing net (loss) income per common share:
Basic (in shares)	30,376,745	30,363,076
Diluted (in shares)	30,376,745	31,316,028

DESCRIPTION OF BUSINESS

12 Months Ended

Jun. 30, 2023

DESCRIPTION OF BUSINESS [Abstract]

DESCRIPTION OF BUSINESS

1.	DESCRIPTION OF BUSINESS

Charles & Colvard, Ltd. (the “Company”), a North Carolina corporation, was founded in 1995. The Company manufactures, markets, and distributes Charles & Colvard Created Moissanite^® (hereinafter referred to as moissanite or moissanite jewels) and finished jewelry featuring moissanite, including Forever One^™, the Company’s premium moissanite gemstone brand, for sale in the worldwide fine jewelry market. The Company also markets and distributes Caydia^® lab grown diamonds and finished jewelry featuring lab grown diamonds for sale in the worldwide fine jewelry market.

The Company sells loose moissanite jewels, loose lab grown diamonds, and finished jewelry featuring both moissanite and lab grown diamonds at wholesale prices to distributors, manufacturers, retailers, and designers, including some of the largest distributors and jewelry manufacturers in the world. In addition, In May 2023, the Company launched charlesandcolvarddirect.com, a direct-to-wholesaler sales portal, which is a gemstone product disposition wholesale outlet. The Company’s finished jewelry and loose moissanite jewels and lab grown diamonds that are mounted into fine jewelry by other manufacturers are sold at retail outlets and via the Internet. The Company sells at retail prices to end-consumers through its own Charles & Colvard Signature Showroom, which opened in October 2022, and also through its wholly owned operating subsidiary, charlesandcolvard.com, LLC, third-party online marketplaces, drop-ship, and other pure-play, exclusively e-commerce outlets. The Company also sells at discount retail prices to end-consumers through moissaniteoutlet.com, LLC, a wholly owned operating subsidiary of charlesandcolvard.com, LLC, and third-party online marketplaces.

INCOME TAXES, Income Tax Net Expense (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Current [Abstract]
Federal	$ 0	$ 0
State	(50,132)	(19,606)
Total current (expense) benefit	(50,132)	(19,606)
Deferred [Abstract]
Federal	(5,568,311)	(493,910)
State	(283,593)	(5,016)
Total deferred (expense) benefit	(5,851,904)	(498,926)
Income tax net (expense) benefit	$ (5,902,036)	$ (518,532)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock-Based Compensation (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Stock-Based Compensation [Abstract]
Employee stock options	$ 225,694	$ 243,576
Restricted stock awards	23,734	530,765
Total	249,428	774,341
Stock-based compensation capitalized as a cost of inventory	$ 0	$ 0

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2023

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

10.	COMMITMENTS AND CONTINGENCIES

Lease Arrangements

On December 9, 2013, the Company entered into a Lease Agreement, as amended on December 23, 2013, April 15, 2014, and January 29, 2021 (the “Lease Agreement”), for its corporate headquarters, which occupies approximately 36,350 square feet of office, storage and light manufacturing space and is classified as an operating lease for financial reporting purposes. The expiration date of the base term of the Lease Agreement is October 31, 2026 and the terms of the Lease Agreement contain no early termination provisions. Provided there is no outstanding uncured event of default under the Lease Agreement, the Company has an option to extend the lease term for a period of five years. The Company’s option to extend the term of the Lease Agreement must be exercised in writing on or before 270 days prior to expiration of the then-current term. If the option is exercised, the monthly minimum rent for each of the extended terms will be adjusted to the then prevailing fair market rate.

The Company took possession of the leased property on May 23, 2014, once certain improvements to the leased space were completed and did not have access to the property before this date. Upon execution of the third amendment to the Lease Agreement (the “Lease Amendment”) on January 29, 2021, the Lease Amendment included a rent abatement in the amount of approximately $214,000, which is reflected in the rent payments used in the calculation of the right-of-use (“ROU”) asset and lease liability once remeasured upon the execution of the Lease Amendment to extend the lease term. The Lease Amendment also included an allowance for leasehold improvements offered by the landlord in an amount not to exceed approximately $545,000. 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 June 30, 2023, the Company’s balance sheet classifications of its leases are as follows:

Operating Leases:
Noncurrent operating lease ROU assets	$	2,183,232

Current operating lease liabilities	$	880,126
Noncurrent operating lease liabilities		2,047,742
Total operating lease liabilities	$	2,927,868

The Company’s total operating lease cost was approximately $698,000 and $596,000 for the fiscal years ended June 30, 2023 and 2022, respectively.

The Company’s estimated incremental borrowing rate used and assumed discount rate with respect to operating leases was 2.81% and the remaining operating lease term was 3.33 years.

As of June 30, 2023, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows:

2024	$	893,660
2025		918,236
2026		943,487
2027		317,327
Total lease payments		3,072,710
Less: imputed interest		144,842
Present value of lease payments		2,927,868
Less: current lease liability		880,126
Total long-term lease liability	$	2,047,742

The Company makes cash payments for amounts included in the measurement of its lease liabilities. During the fiscal years ended June 30, 2023 and 2022, cash paid for operating leases was approximately $916,000 and $550,000, 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 June 30, 2023. Over the life of the Supply Agreement, as amended, the Company’s future minimum annual purchase commitments of SiC crystals range from approximately $4.00 million to $10.00 million each year.

During the fiscal years ended June 30, 2023 and 2022, the Company purchased approximately $1.80 million and $6.29 million, respectively, of SiC crystals from Wolfspeed.

The Company has made no purchases of SiC crystals during the nine-month period ended June 30, 2023 while 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 not yet been scheduled. The final determinations of liability arising from this matter will only be made following comprehensive investigations, discovery and arbitration processes.

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Non-Recurring [Member]
Fair Value Measurements [Abstract]
Assets	$ 0	$ 0

INVENTORIES

12 Months Ended

Jun. 30, 2023

INVENTORIES [Abstract]

INVENTORIES

6.	INVENTORIES

The Company’s total inventories, net consisted of the following as of the dates presented:

	June 30,
	2023		2022
Finished jewelry:
Raw materials	$	1,288,906	$	1,697,361
Work-in-process		1,223,670		1,260,728
Finished goods		12,772,611		12,100,910
Finished goods on consignment		2,039,506		2,135,856
Total finished jewelry		17,324,693		17,194,855
Loose jewels:
Raw materials		421,603		1,985,355
Work-in-process		6,131,853		8,485,713
Finished goods		2,294,270		5,454,266
Finished goods on consignment		254,323		303,491
Total loose jewels		9,102,049		16,228,825
Total supplies inventory		326,834		89,120
Total inventory	$	26,753,576	$	33,512,800

As of the dates presented, the Company’s total inventories, are classified as follows:

	June 30,
	2023		2022
Short-term portion	$	7,476,046	$	11,024,276
Long-term portion		19,277,530		22,488,524
Total inventory	$	26,753,576	$	33,512,800

The Company’s work-in-process inventories include raw SiC crystals on which processing costs, such as labor and sawing, have been incurred; and components, such as metal castings and finished goods set with moissanite jewels, that have been issued to jobs in the manufacture of finished jewelry. The Company’s moissanite jewel manufacturing process involves the production of intermediary shapes, called “preforms,” that vary depending upon the expected size and shape of the finished jewel. To maximize manufacturing efficiencies, preforms may be made in advance of current finished inventory needs but remain in work-in-process inventories. As of June 30, 2023 and 2022, work-in-process inventories issued to active production jobs approximated $1.99 million and $2.76 million, respectively.

The Company’s moissanite and lab grown diamond jewels do not degrade in quality over time and inventory generally consists of the shapes and sizes most commonly used in the jewelry industry. In addition, approximately one-half of the Company’s jewel inventory is not mounted in finished jewelry settings and is therefore not subject to fashion trends. Product obsolescence is closely monitored and reviewed by management as of and for each financial reporting period.

The Company manufactures finished jewelry featuring moissanite and lab grown diamonds. Relative to loose moissanite jewels and lab grown diamonds, finished jewelry is more fashion-oriented and subject to styling trends that could render certain designs obsolete over time. The majority of the Company’s finished jewelry featuring moissanite and lab grown diamonds is held in inventory for resale and largely consists of such core designs as stud earrings, solitaire and three-stone rings, pendants, and bracelets that tend not to be subject to significant obsolescence risk due to their classic styling. In addition, the Company generally holds smaller quantities of designer-inspired and trend moissanite fashion jewelry that is available for resale through retail companies and through its Online Channels segment. The Company also carries a limited amount of inventory as part of its sample line that the Company uses in the selling process to its customers.

The Company’s continuing operating subsidiaries carry no net inventories, and inventory is transferred without intercompany markup from the parent entity as product line cost of goods sold when sold to the end consumer.

The Company’s inventories are stated at the lower of cost or net realizable value on an average cost basis. Each accounting period the Company evaluates the valuation and classification of inventories including the need for potential inventory write-downs, which also include significant estimates by management. As a result of the deterioration of marketability of certain of the Company’s loose jewels inventory, management determined that the inventory has lost certain of its revenue-generating ability and the net realizable value of this inventory has fallen below that of its historical carrying cost. The multiple grades of the Company’s Moissanite by Charles & Colvard® loose gemstones and lab-grown diamonds have seen a market deterioration which started in the quarterly period ended June 30, 2023 due to the recent downward pricing pressure on both mined and lab grown diamonds. These trends in the diamond market have now put considerable pricing pressure on moissanite – for rough and loose gemstones – and due to oversupply of rough and loose gems for lab grown diamonds the net realizable value of such inventory has decreased.

Included in cost of goods sold during the quarter and year ended June 30, 2023, is the write-down of approximately $5.9 million of a portion of the Company’s non-Forever One™ loose jewels inventory in response to pricing pressures and constrained consumer demand that has impacted the net realizable value of such inventory. The non-Forever One™ material inventory is comprised of raw materials, or boules, work-in-process gemstones, and loose finished gemstones.

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Jun. 30, 2023

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION [Abstract]

Stock-Based Compensation

The following table summarizes the components of the Company’s stock-based compensation included in net income for the periods presented:

	Year Ended June 30,
	2023		2022
Employee stock options	$	225,694	$	243,576
Restricted stock awards		23,734		530,765
Total	$	249,428	$	774,341

Stock Option Activity

The following is a summary of the stock option activity for the fiscal years ended June 30, 2023 and 2022:

	Shares			Weighted Average Exercise Price
Outstanding at June 30, 2021		2,235,286		$	1.24
Granted		289,793		$	2.47
Exercised		(622,226	)	$	1.15
Forfeited		(24,753	)	$	1.04
Expired		(219,297	)	$	2.57
Outstanding at June 30, 2022		1,658,803		$	1.32
Granted		270,787		$	1.02
Forfeited		(65,765	)	$	1.99
Expired		(46,160	)	$	1.76
Outstanding at June 30, 2023		1,817,665		$	1.24

Weighted Average Assumptions for Stock Options Granted

The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted average assumptions for stock options granted during the periods presented:

	Year Ended June 30,
	2023			2022
Dividend yield		0.0	%		0.0	%
Expected volatility		61.0	%		61.6	%
Risk-free interest rate		3.75	%		1.46	%
Expected lives (years)		5.4			4.5

Stock Options Outstanding

The following tables summarize information in connection with stock options outstanding at June 30, 2023:

Options Outstanding						Options Exercisable						Options Vested or Expected to Vest
Balance as of June 30, 2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Balance as of June 30, 2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Balance as of June 30, 2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
	1,817,665		6.27	$	1.24		1,405,916		5.50	$	1.22		1,789,617		6.23	$	1.23

Restricted Stock Activity

The following is a summary of the restricted stock activity for the fiscal years ended June 30, 2023 and 2022:

	Shares			Weighted Average Grant Date Fair Value
Unvested at June 30, 2021		178,750		$	0.72
Granted		242,725		$	2.75
Vested		(242,725	)	$	1.25
Unvested at June 30, 2022		178,750		$	2.75
Granted		178,750		$	0.97
Vested		(134,063	)	$	2.75
Cancelled		(44,687	)	$	2.75
Unvested at June 30, 2023		178,750		$	0.97

EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Thousands	12 Months Ended
EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022
EMPLOYEE BENEFIT PLAN [Abstract]
Company contributions to 401(k) Plan	$ 171	$ 76

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Cost of Goods Sold (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	$ 25,212,383	$ 22,845,702
Inventory write-downs	6,004,000	195,000
Product Line [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	15,142,068	20,102,490
Segment Reconciling Item [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	10,070,315	2,743,212
Non-capitalized manufacturing and production control expenses	2,210,494	1,661,207
Freight out	1,068,437	1,195,062
Inventory write-downs	6,004,000	195,000
Other inventory adjustments	$ 787,384	$ (308,057)

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Jun. 30, 2023	Oct. 06, 2023	Dec. 31, 2022
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Period End Date	Jun. 30, 2023
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 20,668,921
Entity Common Stock, Shares Outstanding		30,523,705
Auditor Firm ID	243
Auditor Name	BDO USA, P.C.
Auditor Location	Raleigh, North Carolina

INCOME TAXES, Noncurrent Deferred Tax Assets, Net (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Deferred Tax Assets [Abstract]
Reversals and accruals	$ 183,907	$ 487,333
Federal net operating loss ("NOL") carryforwards	5,198,460	3,471,594
State NOL carryforwards	743,287	532,300
Hong Kong NOL carryforwards	995,566	995,566
Section 263A adjustment	120,078	118,916
Stock-based compensation	107,842	155,139
Inventory valuation & obsolescence reserve	3,465,024	1,631,339
Operating lease liabilities	703,254	850,910
Noncurrent deferred tax assets	11,517,418	8,243,097
Valuation allowance	(10,562,696)	(1,442,213)
Noncurrent deferred tax assets, net	954,722	6,800,884
Deferred Tax Liabilities [Abstract]
Prepaid expenses	(15,770)	(52,792)
Depreciation	(414,555)	(255,734)
Operating lease right-of-use assets	(524,397)	(640,454)
Noncurrent deferred tax liabilities	(954,722)	(948,980)
Total noncurrent deferred tax assets, net	$ 0	$ 5,851,904

INTANGIBLE ASSETS (Details) - USD ($)	12 Months Ended
INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Intangible assets [Abstract]
Intangible assets	$ 1,320,019	$ 1,266,067
Less accumulated amortization	(1,014,316)	(1,000,337)
Intangible assets, net	305,703	265,730
Amortization Expense [Abstract]
Amortization expense	14,000	8,000
2024	28,000
2025	27,000
2026	27,000
2027	27,000
2028	26,000
Patents [Member]
Intangible assets [Abstract]
Intangible assets	$ 1,017,007	1,017,007
Weighted average remaining amortization period	11 years 7 months 6 days
Trademarks [Member]
Intangible assets [Abstract]
Intangible assets	$ 296,294	242,342
Weighted average remaining amortization period	9 years
License Rights [Member]
Intangible assets [Abstract]
Intangible assets	$ 6,718	$ 6,718

INVENTORIES (Details) - USD ($)	3 Months Ended	12 Months Ended
INVENTORIES (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022
Inventories [Abstract]
Total supplies inventory	$ 326,834	$ 326,834	$ 89,120
Total inventory	26,753,576	26,753,576	33,512,800
Short-term portion	7,476,046	7,476,046	11,024,276
Long-term portion	19,277,530	19,277,530	22,488,524
Work-in-process inventories issued to active production jobs	1,990,000	$ 1,990,000	2,760,000
Percentage of jewel inventory not mounted in finished jewelry settings		50.00%
Inventory write-down		$ 6,004,000	195,000
Finished Jewelry [Member]
Inventories [Abstract]
Raw materials	1,288,906	1,288,906	1,697,361
Work-in-process	1,223,670	1,223,670	1,260,728
Finished goods	12,772,611	12,772,611	12,100,910
Finished goods on consignment	2,039,506	2,039,506	2,135,856
Total	17,324,693	17,324,693	17,194,855
Loose Jewels [Member]
Inventories [Abstract]
Raw materials	421,603	421,603	1,985,355
Work-in-process	6,131,853	6,131,853	8,485,713
Finished goods	2,294,270	2,294,270	5,454,266
Finished goods on consignment	254,323	254,323	303,491
Total	9,102,049	9,102,049	$ 16,228,825
Non-Forever One Loose Jewels Inventory [Member]
Inventories [Abstract]
Inventory write-down	$ 5,900,000	$ 5,900,000

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)

12 Months Ended

Jun. 30, 2023

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]

Major Customers

The following is a summary of customers that represent 10% or more of total gross accounts receivable as of the dates presented:

	June 30,
	2023			2022
Customer A		24	%		*	%
Customer B		14	%		*	%
Customer C		14	%		*	%
Customer D		**	%		29	%
Customer E		**	%		20	%
Customer F		**	%		13	%

*	Customers A, B, and C did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2022.

**	Customers D, E, and F did not have individual balances 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 greater than or equal to 10% of total net sales for the periods presented:

	Year Ended June 30,
	2023			2022
Customer E		14	%		14	%

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Advertising Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Advertising Costs [Abstract]
Cooperative advertising expenses	$ 606	$ 792
Advertising expenses	$ 7,890	$ 7,380

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Revenue Recognition [Abstract]
Deferred revenue	$ 566,896	$ 452,866	$ 774,891
Accounts receivable, net	$ 380,085	$ 2,220,816	$ 1,662,074
Minimum [Member]
Revenue Recognition [Abstract]
Customer payment terms	30 days
Maximum [Member]
Revenue Recognition [Abstract]
Customer payment terms	90 days
Traditional [Member] \| Minimum [Member]
Revenue Recognition [Abstract]
Customer payment terms	30 days
Absolute right of return period	6 months
Customer payment terms on consignment shipments	30 days
Traditional [Member] \| Maximum [Member]
Revenue Recognition [Abstract]
Customer payment terms	90 days
Return period for credit	30 days
Absolute right of return period	1 year
Customer payment terms on consignment shipments	60 days
Online Channels [Member] \| Minimum [Member]
Revenue Recognition [Abstract]
Customer payment terms on consignment shipments	30 days
Online Channels [Member] \| Maximum [Member]
Revenue Recognition [Abstract]
Customer payment terms on consignment shipments	60 days
charlesandcolvard.com [Member] \| Maximum [Member]
Revenue Recognition [Abstract]
Return period for credit	30 days
moissaniteoutlet.com [Member] \| Maximum [Member]
Revenue Recognition [Abstract]
Return period for credit	30 days

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Jun. 30, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation – The accompanying consolidated financial statements as of and for the fiscal years ended June 30, 2023 and 2022, include the accounts of the Company and its wholly owned subsidiaries charlesandcolvard.com, LLC; including its wholly-owned subsidiary, moissaniteoulet.com, LLC, which was formed and organized 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 2009 and has had no operating activity since 2008. Charles & Colvard Direct, LLC, had no operating activity during the fiscal years ended June 30, 2023 or 2022. All intercompany accounts have been eliminated.

Use of Estimates

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. As future events and their effects cannot be fully determined with precision, actual results of operations, cash flow, and financial position could differ significantly from estimates. The most significant estimates impacting the Company’s consolidated financial statements relate to valuation and classification of inventories, accounts receivable reserves, stock-based compensation, and revenue recognition. Changes in estimates are reflected in the consolidated financial statements in the period in which the change in estimate occurs.

Reclassification

Reclassification – Certain amounts in the Company’s consolidated financial statements for the fiscal year ended June 30, 2022 have been reclassified to conform to current presentation, principally amounts presented in Note 9, “Accrued Expenses and Other Liabilities”, relating to the combination of accrued sales tax and accrued franchise taxes, which had previously been presented separately. These reclassifications had no impact on the Company’s consolidated financial position or consolidated results of operations as of or for the fiscal years ended June 30, 2023 and 2022.

Cash and Cash Equivalents

Cash and Cash Equivalents – All highly liquid investments with an original maturity of three months or less from the date of purchase are considered to be cash equivalents. The Company’s cash and cash equivalents include cash on deposit and a money market fund.

Restricted Cash

Restricted Cash – In accordance with the terms of the Company’s cash collateralized $5.00 million credit facility from JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), which the Company entered into on July 12, 2021, as amended July 28, 2022 and amended further effective June 21, 2023, the Company is required to keep $5.1 million in a cash deposit account held by JPMorgan Chase. Such amount was held as security for the Company’s credit facility from JPMorgan Chase. Accordingly, during the term of the JPMorgan Chase credit facility, the cash deposit held by JPMorgan Chase is classified as restricted cash for financial reporting purposes on the Company’s Consolidated Balance Sheets.

For additional information regarding the Company’s cash collateralized credit facility with JPMorgan Chase, see Note 11, “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 repurchases 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 June 30, 2023 and 2022, cash in the amount of approximately $30 and $461,000, respectively, was held by Oppenheimer. Such cash amount held by Oppenheimer was classified as restricted cash for financial reporting purposes on the Company’s Consolidated Balance Sheets.

For additional information regarding the Company’s stock repurchase program, see Note 12, “Shareholders’ Equity and Stock-Based Compensation.”

The reconciliation of cash, cash equivalents, and restricted cash, as presented on the Consolidated Statements of Cash Flows, consists of the following as of the dates presented:

	June 30,
	2023		2022
Cash and cash equivalents	$	10,446,532	$	15,668,361
Restricted cash		5,122,379		5,510,979
Total cash, cash equivalents, and restricted cash	$	15,568,911	$	21,179,340

Concentration of Credit Risk

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 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.

See Note 14, “Major Customers and Concentration of Credit Risk”, for further discussion of credit risk within trade accounts receivable.

Accounts Receivable Reserves

Accounts Receivable Reserves – Estimates are used to determine the amount of two reserves against trade accounts receivable. The first reserve is an allowance for sales returns. At the time revenue is recognized, the Company estimates future returns using a historical return rate that is reviewed quarterly with consideration of any contractual return privileges granted to customers and it reduces sales and trade accounts receivable by this estimated amount. The Company’s allowance for sales returns was $568,000 and $591,000 at June 30, 2023 and 2022, respectively.

The following are reconciliations of the allowance for sales returns balances for the periods presented:

	Year Ended June 30,
	2023			2022
Balance, beginning of year	$	591,000		$	675,000
Additions charged to operations		5,405,613			6,012,069
Sales returns		(5,428,613	)		(6,096,069	)
Balance, end of year	$	568,000		$	591,000

The second reserve is an allowance for uncollectible accounts for the measurement of estimated credit losses resulting from the failure of the Company’s customers to make required payments. This allowance reduces trade accounts receivable to an amount expected to be collected. The Company uses a current expected credit losses model whereby management estimates credit losses expected over the life of its pool of exposures based on historical percentages of uncollectible accounts, changes in payment history, and facts and circumstances, including any current extenuating economic conditions, regarding specific accounts that become known to, or forecasted by, management to be uncollectible when evaluating the adequacy of the allowance for uncollectible accounts. The Company determines a credit loss percentage based on the age of the receivable that it deems uncollectible related to potential credit losses. The Company records an allowance for such credit losses, which includes a provision for expected losses based on historical write-offs, adjusted for current conditions as deemed necessary, reasonable and supportable forecasts about future conditions, and a specific reserve for accounts deemed at risk. The allowance is the Company’s estimate for accounts receivable as of the balance sheet date that ultimately will not be collected. Any changes in the allowance are reflected in the results of operations in the period in which the change occurs. The Company writes-off accounts receivable and the related allowance recorded previously when it becomes probable, based upon customer facts and circumstances, that such amounts will not be collected. The Company generally uses internal collection efforts, which may include its sales personnel as it deems appropriate. After all internal collection efforts have been exhausted, the Company generally writes-off the underlying account receivable.

Any accounts with significant balances are reviewed separately to determine an appropriate allowance based on the facts and circumstances of the specific underlying customer account. During its review for the fiscal years ended June 30, 2023 and 2022, the Company determined no additional reserves were necessary for specific accounts. Based on these criteria, management determined that allowances for uncollectible accounts receivable of $183,000 and $85,000 at June 30, 2023 and 2022, respectively, were required.

The following are reconciliations of the allowance for uncollectible accounts balances as of the periods presented:

	Year Ended June 30,
	2023		2022
Balance, beginning of year	$	85,000	$	71,000
Additions charged to operations		98,000		14,000
Balance, end of year	$	183,000	$	85,000

Although the Company believes that its reserves are adequate, if the financial condition of its customers deteriorates, resulting in an impairment of their ability to make payments, or if it underestimates the allowances required, additional allowances may be necessary, which would result in increased expense in the period in which such determination is made.

Inventories

Inventories - Inventories are stated on an average cost basis at the lower of cost or net realizable value. Inventory costs include direct material and labor, inbound freight, purchasing and receiving costs, inspection costs, and warehousing costs. Any inventory on hand at the measurement date in excess of the Company’s current requirements based on historical and anticipated levels of sales is classified as long-term on the Company’s Consolidated Balance Sheets. The Company’s classification of its inventory as either current or long-term inventory requires it to estimate the portion of on-hand inventory that is expected to be realized over the next 12 months and does not include precious metal, labor, and other inventory purchases expected to be both purchased and realized in cost of sales over the next 12 months.

Each accounting period, the Company evaluates the valuation and classification of inventories including the need for potential inventory write-downs, which also include significant estimates by management. The Company’s inventory-related valuation allowances are recorded in the aggregate rather than an individual item approach for each obsolescence, rework, and shrinkage valuation allowance.

Property and Equipment

Property and Equipment – Property and equipment are stated at cost and are depreciated over their estimated useful lives using the straight-line method as follows:

Machinery and equipment	5 to 12 years
Computer hardware	3 to 5 years
Computer software	3 years
Furniture and fixtures	5 to 10 years
Leasehold improvements	Shorter of the estimated useful life or lease term

Intangible Assets

Intangible Assets – The Company capitalizes costs associated with obtaining or defending patents issued or pending for inventions and license rights related to the manufacturing of moissanite gemstones and fine jewelry set with moissanite and lab grown diamond jewels. Such costs are amortized over the life of the patent, generally 15 years. The Company also capitalizes licenses it obtains for the use of certain advertising images and external costs incurred for trademarks. Such costs are amortized over the period of the license or estimated useful life of the trademark, respectively.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets – The Company evaluates the recoverability of its long-lived assets by reviewing them for possible impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. The recoverability of assets to be held and used is measured by comparing the carrying value of the asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying value exceeds the fair value and such amount is recognized as an operating expense in the period in which the determination is made. As of June 30, 2023, the Company did not identify any indicators of long-lived asset impairment.

In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of its long-lived assets. Any reduction in the useful-life assumption would result in increased depreciation and amortization expense in the current period in which such determination is made, as well as in subsequent periods.

Revenue Recognition

Revenue Recognition – Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this principle, the Company performs the following five steps: (i) identification of a contract with a customer; (ii) identification of any separate performance obligations; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when the Company has satisfied the underlying performance obligations. The Company recognizes substantially all of its revenue at a point in time when control of the Company’s goods has passed to the customer with the exception of consigned goods. The Company considers its sole performance obligation related to the shipment of goods satisfied at the time this control is transferred which is typically upon shipment but may be upon delivery depending on the contractual arrangement with the customer. Customer payment terms for these shipments typically range between 30- and 90-days. Customers purchasing items through the Company’s websites pay amounts in advance of the Company transferring control of the goods. Amounts received in advance of the transfer of control are included in deferred revenue within accrued expenses and other liabilities on the consolidated balance sheets until the time of the transfer of control of the goods. The amounts included in deferred revenue of $452,866 and $774,891 at June 30, 2022 and June 30, 2021, respectively, were recorded in net sales during the fiscal years ended June 30, 2023 and June 30, 2022, respectively. The opening accounts receivable, net balance as of July 1, 2021 was $1,662,074. The Company has elected to treat shipping and handling performed after control has transferred to customers as a fulfillment activity, and additionally, has elected the practical expedient to report sales taxes on a net basis. The Company records shipping and handling expense related to product sales as cost of sales.

The Company has a variable consideration element related to most of its contracts in the form of product return rights. At the time revenue is recognized, an allowance for estimated returns is established and any change in the allowance for returns is charged against net sales in the current period. For the Company’s Traditional segment customers, the returns policy generally allows for the return of jewels and finished jewelry with a valid reason for credit within 30 days of shipment. Online Channels segment customers in both of the Company’s transactional websites, charlesandcolvard.com and moissaniteoutlet.com, may also generally return purchases within 30 days of the shipment date in accordance with the Company’s returns policies as disclosed on its charlesandcolvard.com and moissaniteoutlet.com websites.

Periodically, the Company ships loose jewel goods and finished goods to Traditional segment customers on consignment terms. Under these consignment terms, the customer assumes the risk of loss and has an absolute right of return for a specified period that typically ranges from six months to one year. The Company’s Online Channels segment and Traditional segment customers are generally required to make payments on consignment shipments within 30 to 60 days upon the customer informing the Company that it will keep the inventory. Accordingly, the Company does not recognize revenue on these consignment transactions until the earlier of (i) the customer informing the Company that it will keep the inventory; (ii) the expiration of the right of return period; or (iii) the customer informing the Company that the inventory has been sold to the end consumer.

The Company presents disaggregated net sales by its Online Channels segment and its Traditional segment for both finished jewelry and loose jewels product lines. The Company also presents disaggregated net sales by geographic area between the United States and international locations. For financial reporting purposes, disaggregated net sales amounts are presented in Note 3, “Segment Information and Geographic Data.”

Returns Asset and Refund Liabilities

The Company maintains a returns asset account and a refund liabilities account to record the effects of its estimated product returns and sales returns allowance. The Company’s returns asset and refund liabilities are updated at the end of each financial reporting period and the effect of such changes are accounted for in the period in which such changes occur.

The Company estimates anticipated product returns in the form of a refund liability based on historical return percentages and current period sales levels. The Company also accrues a related returns asset for goods expected to be returned in salable condition, less any expected costs to recover such goods, including return shipping costs that the Company may incur. As of June 30, 2023 and 2022, the Company’s refund liabilities balances were $568,000 and $591,000, respectively, and are included as allowances for sales returns within accounts receivable, net, in the accompanying consolidated balance sheets. As of June 30, 2023 and 2022, the Company’s returns asset balances were $290,000 and $260,000, respectively, and are included within prepaid expenses and other assets in the accompanying consolidated balance sheets.

Cost of Goods Sold

Cost of Goods Sold – Cost of goods sold is primarily composed of inventory sold during the period; inventory written-down during the period due to ongoing quality and obsolescence reviews; salaries and payroll-related expenses for personnel involved in preparing and shipping product to customers; an allocation of shared expenses such as rent, utilities, communication expenses, and depreciation related to preparing and shipping product to customers; and outbound freight charges.

Advertising Costs

Advertising Costs – Advertising production costs are expensed as incurred. Media placement costs are expensed the first time the underlying advertising appears.

The Company also offers a cooperative advertising program to certain of its distributor and retail partners that reimburses, via a credit towards future purchases, a portion of their marketing costs based on the customers’ net purchases from the Company and is subject to the customer providing documentation of all advertising performed that includes the Company’s products. For the fiscal years ended June 30, 2023 and 2022, these approximate amounts were $606,000 and $792,000, respectively, and are included as a component of sales and marketing expenses. Because the Company receives a distinct good or service in exchange for consideration and the fair value of the benefit can be reasonably estimated, these transactions are reflected as sales and marketing expenses.

Advertising expenses, inclusive of the cooperative advertising program, for the fiscal years ended June 30, 2023 and 2022, were approximately $7.89 million and $7.38 million, respectively.

Sales and Marketing

Sales and Marketing – Sales and marketing costs are expensed as incurred. These costs include all expenses of promoting and selling the Company’s products and include such items as the salaries, payroll-related expenses, and travel of sales and marketing personnel; digital marketing; advertising; trade shows; market research; sales commissions; and an allocation of overhead expenses attributable to these activities. Except for an allocation to general and administrative expenses, these costs also include the operating expenses of charlesandcolvard.com, LLC, the Company’s wholly owned operating subsidiary, which include the operating expenses of its wholly owned subsidiary, moissaniteoutlet.com, LLC.

General and Administrative

General and Administrative – General and administrative costs are expensed as incurred. These costs include the salaries and payroll-related expenses of executive, finance, information technology, and administrative personnel; legal, investor relations, and professional fees; general office and administrative expenses; Board of Directors fees; rent; bad debts; and insurance.

Stock-Based Compensation

Stock-Based Compensation – The Company recognizes compensation expense for stock-based awards based on estimated fair values on the date of grant. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The fair value of restricted stock awards is determined by the market price of the Company’s common stock on the date of grant. The expense associated with stock-based compensation is recognized on a straight-line basis over the requisite service period of each award.

Fair value of stock options using the Black-Scholes-Merton option pricing model is estimated on the date of grant utilizing certain assumptions for dividend yield, expected volatility, risk-free interest rate, and expected lives of the awards, as follows:

Dividend Yield. Although the Company issued dividends in prior years, a dividend yield of zero is used due to the lack of recent dividend payments and the uncertainty of future dividend payments;

Expected Volatility. Volatility is a measure of the amount by which a financial variable such as share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company estimates expected volatility giving primary consideration to the historical volatility of its common stock;

Risk-Free Interest Rate. The risk-free interest rate is based on the published yield available on U.S. Treasury issues with an equivalent term remaining equal to the expected life of the stock option; and

Expected Lives. The expected lives of the issued stock options represent the estimated period of time until exercise or forfeiture and are based on the simplified method of using the mid-point between the vesting term and the original contractual term. The simplified method is used because historically the Company has not had sufficient option exercise experience.

The assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rates of stock-based awards and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rates, the Company analyzes its historical forfeiture rates. If the Company’s actual forfeiture rates are materially different from its estimates, or if the Company re-evaluates the forfeiture rates in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period.

Income Taxes

Income Taxes – Deferred income taxes are recognized for the income tax consequences of “temporary” differences by applying enacted statutory income tax rates applicable to future years to differences between the financial statement carrying amounts and the income tax bases of existing assets and liabilities. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount that is more likely than not to be realized.

Net (Loss) Income per Common Share

Net (Loss) Income per Common Share – Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the periods. Diluted net (loss) income per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of stock options and unvested restricted shares that are computed using the treasury stock method.

As of the dates presented, the following table reconciles the differences between the basic and diluted net (loss) income per share presentations:

	Year Ended June 30,
	2023			2022
Numerator:
Net (loss) income	$	(19,580,794	)	$	2,373,915

Denominator:
Weighted average common shares outstanding:
Basic		30,376,745			30,363,076
Effect of dilutive securities		-			952,952
Diluted		30,376,745			31,316,028

Net (loss) income per common share:
Basic	$	(0.64	)	$	0.08
Diluted	$	(0.64	)	$	0.08

For the fiscal year ended June 30, 2023, stock options to purchase approximately 1.82 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 fiscal year ended June 30, 2022, stock options to purchase approximately 758,000 were excluded from the computation of diluted net income per common share because the exercise price of the stock options was greater than the average market price of the common shares or the effect of inclusion of such amounts would be anti-dilutive to net income per common share. Approximately 179,000 shares of unvested restricted stock are excluded from the computation of diluted net loss per common share as of June 30, 2023 because the shares are performance-based, and the underlying conditions have not been met as of the period presented and the effects of the inclusion of such shares would be anti-dilutive to net loss per common share. Approximately 45,000 shares of unvested restricted stock were excluded from the computation of diluted net income per common share as of June 30, 2022 because the shares were performance-based, and the underlying conditions had not been met as of June 30, 2022.

INVENTORIES (Tables)

12 Months Ended

Jun. 30, 2023

INVENTORIES [Abstract]

Inventories

The Company’s total inventories, net consisted of the following as of the dates presented:

	June 30,
	2023		2022
Finished jewelry:
Raw materials	$	1,288,906	$	1,697,361
Work-in-process		1,223,670		1,260,728
Finished goods		12,772,611		12,100,910
Finished goods on consignment		2,039,506		2,135,856
Total finished jewelry		17,324,693		17,194,855
Loose jewels:
Raw materials		421,603		1,985,355
Work-in-process		6,131,853		8,485,713
Finished goods		2,294,270		5,454,266
Finished goods on consignment		254,323		303,491
Total loose jewels		9,102,049		16,228,825
Total supplies inventory		326,834		89,120
Total inventory	$	26,753,576	$	33,512,800

As of the dates presented, the Company’s total inventories, are classified as follows:

	June 30,
	2023		2022
Short-term portion	$	7,476,046	$	11,024,276
Long-term portion		19,277,530		22,488,524
Total inventory	$	26,753,576	$	33,512,800

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Weighted Average Assumptions for Stock Options Granted (Details) - Stock Options [Member]	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Weighted Average Assumptions for Stock Options Granted [Abstract]
Dividend yield	0.00%	0.00%
Expected volatility	61.00%	61.60%
Risk-free interest rate	3.75%	1.46%
Expected lives	5 years 4 months 24 days	4 years 6 months

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Jun. 30, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

2.	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

For additional information regarding the Company’s cash collateralized credit facility with JPMorgan Chase, see Note 11, “Debt”.

For additional information regarding the Company’s stock repurchase program, see Note 12, “Shareholders’ Equity and Stock-Based Compensation.”

The reconciliation of cash, cash equivalents, and restricted cash, as presented on the Consolidated Statements of Cash Flows, consists of the following as of the dates presented:

	June 30,
	2023		2022
Cash and cash equivalents	$	10,446,532	$	15,668,361
Restricted cash		5,122,379		5,510,979
Total cash, cash equivalents, and restricted cash	$	15,568,911	$	21,179,340

See Note 14, “Major Customers and Concentration of Credit Risk”, for further discussion of credit risk within trade accounts receivable.

The following are reconciliations of the allowance for sales returns balances for the periods presented:

	Year Ended June 30,
	2023			2022
Balance, beginning of year	$	591,000		$	675,000
Additions charged to operations		5,405,613			6,012,069
Sales returns		(5,428,613	)		(6,096,069	)
Balance, end of year	$	568,000		$	591,000

The following are reconciliations of the allowance for uncollectible accounts balances as of the periods presented:

	Year Ended June 30,
	2023		2022
Balance, beginning of year	$	85,000	$	71,000
Additions charged to operations		98,000		14,000
Balance, end of year	$	183,000	$	85,000

Property and Equipment – Property and equipment are stated at cost and are depreciated over their estimated useful lives using the straight-line method as follows:

Machinery and equipment	5 to 12 years
Computer hardware	3 to 5 years
Computer software	3 years
Furniture and fixtures	5 to 10 years
Leasehold improvements	Shorter of the estimated useful life or lease term

Returns Asset and Refund Liabilities

Advertising Costs – Advertising production costs are expensed as incurred. Media placement costs are expensed the first time the underlying advertising appears.

Advertising expenses, inclusive of the cooperative advertising program, for the fiscal years ended June 30, 2023 and 2022, were approximately $7.89 million and $7.38 million, respectively.

Dividend Yield. Although the Company issued dividends in prior years, a dividend yield of zero is used due to the lack of recent dividend payments and the uncertainty of future dividend payments;

As of the dates presented, the following table reconciles the differences between the basic and diluted net (loss) income per share presentations:

	Year Ended June 30,
	2023			2022
Numerator:
Net (loss) income	$	(19,580,794	)	$	2,373,915

Denominator:
Weighted average common shares outstanding:
Basic		30,376,745			30,363,076
Effect of dilutive securities		-			952,952
Diluted		30,376,745			31,316,028

Net (loss) income per common share:
Basic	$	(0.64	)	$	0.08
Diluted	$	(0.64	)	$	0.08

ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Deferred revenue	$ 566,896	$ 452,866	$ 774,891
Accrued compensation and related benefits	382,630	614,443
Accrued cooperative advertising	243,861	137,467
Accrued sales tax and franchise taxes	202,091	341,706
Other accrued expenses	1	1
Accrued expenses and other liabilities	$ 1,395,479	$ 1,546,483

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Restricted Cash (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Restricted Cash [Abstract]
Funded liquid margin account	$ 30	$ 461,000
Cash, Cash Equivalents and Restricted Cash [Abstract]
Cash and cash equivalents	10,446,532	15,668,361
Restricted cash	5,122,379	5,510,979
Total cash, cash equivalents, and restricted cash	15,568,911	$ 21,179,340	$ 21,446,951
JPMorgan Chase Credit Facility [Member]
Restricted Cash [Abstract]
Borrowing capacity	5,000,000
Cash deposit	$ 5,100,000

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Returns Asset and Refund Liabilities (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Refund liabilities	$ 568,000	$ 591,000
Asset returns	$ 290,000	$ 260,000

INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2023

INCOME TAXES [Abstract]

Income Tax Net Expense

The Company’s income tax net expense for the periods presented comprises the following:

	Year Ended June 30,
	2023			2022
Current:
Federal	$	-		$	-
State		(50,132	)		(19,606	)
Total current (expense) benefit		(50,132	)		(19,606	)

Deferred:
Federal		(5,568,311	)		(493,910	)
State		(283,593	)		(5,016	)
Total deferred (expense) benefit		(5,851,904	)		(498,926	)
Income tax net (expense) benefit	$	(5,902,036	)	$	(518,532	)

Noncurrent Deferred Tax Assets, Net

Significant components of the Company’s noncurrent deferred tax assets, net, as of the dates presented are as follows:

	June 30,
	2023			2022
Deferred tax assets:
Reversals and accruals	$	183,907		$	487,333
Federal net operating loss (“NOL”) carryforwards		5,198,460			3,471,594
State NOL carryforwards		743,287			532,300
Hong Kong NOL carryforwards		995,566			995,566
Section 263A adjustment		120,078			118,916
Stock-based compensation		107,842			155,139
Inventory valuation & obsolescence reserve		3,465,024			1,631,339
Operating lease liabilities		703,254			850,910
Noncurrent deferred tax assets		11,517,418			8,243,097
Valuation allowance		(10,562,696	)		(1,442,213	)
Noncurrent deferred tax assets, net		954,722			6,800,884
Deferred tax liabilities:
Prepaid expenses		(15,770	)		(52,792	)
Depreciation		(414,555	)		(255,734	)
Operating lease right-of-use assets		(524,397	)		(640,454	)
Noncurrent deferred tax liabilities		(954,722	)		(948,980	)
Total noncurrent deferred tax assets, net	$	-		$	5,851,904

Effective Income Tax Rate Reconciliation

The following are reconciliations between expected income taxes, computed at the applicable statutory federal income tax rate applied to pretax accounting income, and the income tax net expense for the periods presented:

	Year Ended June 30,
	2023			2022
Anticipated income tax benefit (expense) at the statutory rate	$	2,872,539		$	(607,414	)
State income tax benefit (expense), net of federal tax effect		430,355			(36,928	)
Income tax effect of uncertain tax positions		-			7,804
Return to provision adjustments		-			405
Stock-based compensation		(67,627	)		131,898
Other changes in deferred income tax assets, net		(16,820	)		(24,380	)
(Increase) Decrease in valuation allowance		(9,120,483	)		10,083
Income tax net (expense) benefit	$	(5,902,036	)	$	(518,532	)

COMMITMENTS AND CONTINGENCIES, Lease Arrangements (Details)		12 Months Ended
	Jan. 29, 2021 USD ($)	Jun. 30, 2023 USD ($) ft²	Jun. 30, 2022 USD ($)
COMMITMENTS AND CONTINGENCIES [Abstract]
Area leased under operating lease \| ft²		36,350
Period of extension on option		5 years
Minimum notice period for extension of lease term		270 days
Rent abatement	$ 214,000
Allowance for leasehold improvements	$ 545,000
Reimbursed leasehold improvements		$ 506,000
Balance Sheet Classifications of Leases [Abstract]
Noncurrent operating lease ROU assets		2,183,232	$ 2,787,419
Operating Lease Liabilities [Abstract]
Current operating lease liabilities		880,126	856,571
Noncurrent operating lease liabilities		2,047,742	2,846,805
Total operating lease liabilities		2,927,868
Operating lease cost		$ 698,000	596,000
Assumed discount rate		2.81%
Remaining operating lease term		3 years 3 months 29 days
Future Lease Payments Under Operating Leases [Abstract]
2024		$ 893,660
2025		918,236
2026		943,487
2027		317,327
Total lease payments		3,072,710
Less: imputed interest		144,842
Total operating lease liabilities		2,927,868
Less: current lease obligations		880,126	856,571
Total long-term lease obligations		2,047,742	2,846,805
Cash paid for operating leases		$ 916,000	$ 550,000

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Jun. 30, 2023

PROPERTY AND EQUIPMENT [Abstract]

Property and Equipment, Net

Property and equipment, net, consists of the following as of the dates presented:

	June 30,
	2023			2022
Computer software	$	2,865,994		$	2,392,465
Machinery and equipment		1,203,585			1,182,171
Computer hardware		1,841,972			1,621,198
Leasehold improvements		2,213,330			1,847,227
Furniture and fixtures		676,014			528,742
Total		8,800,895			7,571,803
Less accumulated depreciation		(6,309,326	)		(5,670,627	)
Property and equipment, net	$	2,491,569		$	1,901,176

INCOME TAXES

12 Months Ended

Jun. 30, 2023

INCOME TAXES [Abstract]

INCOME TAXES

13.	INCOME TAXES

The Company accounts for income taxes under the asset and liability method. Under the asset and liability method, deferred income taxes are recognized for the income tax consequences of “temporary differences” by applying enacted statutory income tax rates applicable to future years to differences between the financial statement carrying amounts and the income tax bases of existing assets and liabilities.

The Company’s income tax net expense for the periods presented comprises the following:

	Year Ended June 30,
	2023			2022
Current:
Federal	$	-		$	-
State		(50,132	)		(19,606	)
Total current (expense) benefit		(50,132	)		(19,606	)

Deferred:
Federal		(5,568,311	)		(493,910	)
State		(283,593	)		(5,016	)
Total deferred (expense) benefit		(5,851,904	)		(498,926	)
Income tax net (expense) benefit	$	(5,902,036	)	$	(518,532	)

Significant components of the Company’s noncurrent deferred tax assets, net, as of the dates presented are as follows:

	June 30,
	2023			2022
Deferred tax assets:
Reversals and accruals	$	183,907		$	487,333
Federal net operating loss (“NOL”) carryforwards		5,198,460			3,471,594
State NOL carryforwards		743,287			532,300
Hong Kong NOL carryforwards		995,566			995,566
Section 263A adjustment		120,078			118,916
Stock-based compensation		107,842			155,139
Inventory valuation & obsolescence reserve		3,465,024			1,631,339
Operating lease liabilities		703,254			850,910
Noncurrent deferred tax assets		11,517,418			8,243,097
Valuation allowance		(10,562,696	)		(1,442,213	)
Noncurrent deferred tax assets, net		954,722			6,800,884
Deferred tax liabilities:
Prepaid expenses		(15,770	)		(52,792	)
Depreciation		(414,555	)		(255,734	)
Operating lease right-of-use assets		(524,397	)		(640,454	)
Noncurrent deferred tax liabilities		(954,722	)		(948,980	)
Total noncurrent deferred tax assets, net	$	-		$	5,851,904

	Year Ended June 30,
	2023			2022
Anticipated income tax benefit (expense) at the statutory rate	$	2,872,539		$	(607,414	)
State income tax benefit (expense), net of federal tax effect		430,355			(36,928	)
Income tax effect of uncertain tax positions		-			7,804
Return to provision adjustments		-			405
Stock-based compensation		(67,627	)		131,898
Other changes in deferred income tax assets, net		(16,820	)		(24,380	)
(Increase) Decrease in valuation allowance		(9,120,483	)		10,083
Income tax net (expense) benefit	$	(5,902,036	)	$	(518,532	)

The Company’s statutory tax rate as of June 30, 2023 is 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. The Company’s statutory tax rate as of the fiscal year ended June 30, 2022 was 22.45% and consisted of the federal income tax rate of 21.00% and a blended state income tax rate of 1.45%, net of the federal benefit. The Company’s effective income tax rate reflects the effect of federal and state income taxes on earnings and the impact of differences in book and tax accounting arising primarily from the permanent tax benefits associated with stock-based compensation transactions during the accounting period then ended. Driven by the establishment of the valuation allowance during the year ended June 30, 2023, the Company’s effective tax rate for the fiscal year ended June 30, 2023 was a negative 43.15%. For the fiscal year ended June 30, 2022, the Company’s effective income tax rate was 17.93%.

As of each reporting date, management considers new evidence, both positive and negative, that could impact the Company’s view with regard to future realization of deferred tax assets. During the three months ended March 31, 2023, management determined that due to the worsening global macro-economic conditions and heightened levels of inflation, including fears of recession, coupled with the effects from worldwide political unrest and the ongoing economic impact from the COVID pandemic, the risks associated with these conditions led management to conclude that it was not more likely than not the Company would have sufficient future taxable income to utilize its deferred tax assets. Additionally, the Company’s management determined that the positive evidence was no longer sufficient to offset available negative evidence, primarily as a result of the pre-tax operating losses incurred during the three- and nine-month periods ended March 31, 2023. Consequently, management established a full valuation allowance against the Company’s deferred tax assets. As of June 30, 2023, the Company’s management determined that sufficient negative evidence continued to exist to conclude it was uncertain that the Company would have sufficient future taxable income to utilize its deferred tax assets, and therefore, the Company maintained a full valuation allowance against its deferred tax assets.

Conversely, as of June 30, 2022, the Company’s management determined at that time its expectations of future taxable income in upcoming tax years, including estimated growth rates applied to future expected taxable income that included significant management estimates and assumptions, would continue to be sufficient to result in full utilization of the Company’s remaining federal net operating loss carryforwards and certain of the deferred tax assets prior to any statutory expiration. As a result, the Company’s management determined that sufficient positive evidence existed as of June 30, 2022, to conclude that it was more likely than not deferred tax assets of approximately $5.85 million remained realizable. However, the Company’s management further determined that sufficient negative evidence continued to exist to conclude it was uncertain that the Company would have sufficient future taxable income to utilize certain of its deferred tax assets. Therefore, the Company continued to maintain a valuation allowance against the deferred tax assets relating to certain state net operating loss carryforwards from the Company’s e-commerce subsidiary due to the timing uncertainty of when it would generate positive taxable income to utilize the associated deferred tax assets. In addition, a valuation allowance remained against certain deferred tax assets relating to operating loss carryforwards relating to the Company’s dormant subsidiary located in Hong Kong.

As of June 30, 2023 and 2022, the Company had federal tax net operating loss carryforwards of approximately $24.76 million and $16.53 million, respectively, expiring between 2034 and 2037, or that have no expiration, which can be used to offset against future federal taxable income; North Carolina tax net operating loss carryforwards of approximately $20.01 million and $19.77 million, respectively, expiring between 2023 and 2035; and various other state tax net operating loss carryforwards expiring between 2027 and 2040, which can be used to offset against future state taxable income.

As of each of June 30, 2023 and 2022, there was approximately $6.03 million in net operating loss carryforwards in Hong Kong. In accordance with the Hong Kong tax code, these amounts can be carried forward indefinitely to offset future taxable income in Hong Kong. The Company’s deferred tax assets in Hong Kong were fully reserved with a valuation allowance of $996,000 as of each of June 30, 2023 and 2022, and had been fully reserved in all prior fiscal periods due to the uncertainty of future taxable income in this jurisdiction to utilize the deferred tax assets. Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary, 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. If the Company uses any portion of its deferred tax assets in future periods, the valuation allowance would need to be reversed and may impact the Company’s future operating results.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 2
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
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-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

12 Months Ended

Jun. 30, 2023

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

14.	MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

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:

	June 30,
	2023			2022
Customer A		24	%		*	%
Customer B		14	%		*	%
Customer C		14	%		*	%
Customer D		**	%		29	%
Customer E		**	%		20	%
Customer F		**	%		13	%

*	Customers A, B, and C did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2022.

**	Customers D, E, and F did not have individual balances that represented 10% or more of total gross accounts receivable as of June 30, 2023.

	Year Ended June 30,
	2023			2022
Customer E		14	%		14	%

The customer above is included in the Company’s Traditional segment. The Company records its sales returns allowance at the corporate level based on several factors including historical sales return activity and specific allowances for known customer returns.

DEBT (Details) - USD ($)				12 Months Ended
DEBT (Details) - USD ($)	Jun. 21, 2023	Jul. 28, 2022	Jul. 12, 2021	Jun. 30, 2023
Line of Credit [Abstract]
Long-term debt				$ 0
JPMorgan Chase Credit Facility [Member]
Line of Credit [Abstract]
Borrowing capacity				5,000,000
Cash deposit				$ 5,100,000
Interest rate premium in excess of rate otherwise applicable charged during an event of default				3.00%
Non-refundable origination fee	$ 0	$ 0	$ 10,000
Credit facility outstanding				$ 0
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%
JPMorgan Chase Credit Facility [Member] \| LIBOR [Member]
Line of Credit [Abstract]
Basis spread on variable rate				1.25%

SEGMENT INFORMATION AND GEOGRAPHIC DATA

12 Months Ended

Jun. 30, 2023

SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]

SEGMENT INFORMATION AND GEOGRAPHIC DATA

3.	SEGMENT INFORMATION AND GEOGRAPHIC DATA

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making operating decisions and assessing performance as the source of the Company’s operating and reportable segments.

The Company manages its business through two operating and reportable segments based on its distribution channels to sell its product lines, loose jewels and finished jewelry: its “Online Channels” segment, which consists of e-commerce outlets including charlesandcolvard.com, moissaniteoutlet.com, third-party online marketplaces, drop-ship retail, and other pure-play, exclusively e-commerce outlets; and its “Traditional” segment, which consists of wholesale and retail customers, including its own Charles & Colvard Signature Showroom and charlesandcolvarddirect.com. The accounting policies of the Online Channels segment and Traditional segment are the same as those described in Note 2, “Basis of Presentation and Significant Accounting Policies.”

The Company evaluates the financial performance of its segments based on net sales and product line gross profit, or the excess of product line sales over product line cost of goods sold. The Company’s product line cost of goods sold is defined as product cost of goods sold, excluding non-capitalized expenses from the Company’s manufacturing and production control departments, comprising personnel costs, depreciation, leases, utilities, and corporate overhead allocations; freight out; inventory write-downs; and other inventory adjustments, comprising costs of quality issues, and damaged goods.

Summary financial information by reportable segment for the periods presented is as follows:

	Year Ended June 30, 2023
	Online Channels		Traditional		Total
Net sales
Finished jewelry	$	19,607,941	$	4,377,673	$	23,985,614
Loose jewels		1,884,939		4,075,681		5,960,620
Total	$	21,492,880	$	8,453,354	$	29,946,234

Product line cost of goods sold
Finished jewelry	$	9,214,749	$	3,182,342	$	12,397,091
Loose jewels		705,576		2,039,401		2,744,977
Total	$	9,920,325	$	5,221,743	$	15,142,068

Product line gross profit
Finished jewelry	$	10,393,192	$	1,195,331	$	11,588,523
Loose jewels		1,179,363		2,036,280		3,215,643
Total	$	11,572,555	$	3,231,611	$	14,804,166

Depreciation and amortization	$	215,978	$	437,179	$	653,157

Capital expenditures	$	423,150	$	806,421	$	1,229,571

	Year Ended June 30, 2022
	Online Channels		Traditional		Total
Net sales
Finished jewelry	$	23,539,347	$	6,172,883	$	29,712,230
Loose jewels		3,240,702		10,136,092		13,376,794
Total	$	26,780,049	$	16,308,975	$	43,089,024

Product line cost of goods sold
Finished jewelry	$	9,837,830	$	4,094,870	$	13,932,700
Loose jewels		1,209,832		4,959,958		6,169,790
Total	$	11,047,662	$	9,054,828	$	20,102,490

Product line gross profit
Finished jewelry	$	13,701,517	$	2,078,013	$	15,779,530
Loose jewels		2,030,870		5,176,134		7,207,004
Total	$	15,732,387	$	7,254,147	$	22,986,534

Depreciation and amortization	$	235,643	$	243,665	$	479,308

Capital expenditures	$	305,586	$	1,190,885	$	1,496,471

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 consolidated financial statements is as follows:

	Year Ended June 30,
	2023		2022
Product line cost of goods sold	$	15,142,068	$	20,102,490
Non-capitalized manufacturing and production control expenses		2,210,494		1,661,207
Freight out		1,068,437		1,195,062
Inventory write-downs		6,004,000		195,000
Other inventory adjustments		787,384		(308,057	)
Cost of goods sold	$	25,212,383	$	22,845,702

A reconciliation of the Company’s consolidated product line gross profit to the Company’s consolidated net (loss) income before income taxes is as follows:

	Year Ended June 30,
	2023			2022
Product line gross profit	$	14,804,166		$	22,986,534
Non-allocated cost of goods sold		(10,070,315	)		(2,743,212	)
Sales and marketing		(13,686,049	)		(12,421,138	)
General and administrative		(5,023,822	)		(4,948,980	)
Total other income, net		297,262			19,243
(Loss) Income before income taxes	$	(13,678,758	)	$	2,892,447

The Company recognizes sales by geographic area based on the country in which the customer is based. Sales to international end consumers made through the Company’s transactional websites, charlesandcolvard.com, charlesandcolvarddirect.com, and moissaniteoutlet.com, are included in international sales for financial reporting purposes. A portion of the Company’s Traditional segment sales made to international wholesale distributors represents products sold internationally that may be re-imported to U.S. retailers.

All intangible assets, as well as property and equipment, as of June 30, 2023 and 2022, are held and located in the United States.

The following presents net sales data by geographic area for the periods presented:

	Year Ended June 30,
	2023		2022
Net sales
United States	$	29,056,696	$	41,138,538
International		889,538		1,950,486
Total	$	29,946,234	$	43,089,024

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Option Activity (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Stock Option Activity [Roll Forward]
Outstanding, beginning balance (in shares)	1,658,803	2,235,286
Granted (in shares)	270,787	289,793
Exercised (in shares)	0	(622,226)
Forfeited (in shares)	(65,765)	(24,753)
Expired (in shares)	(46,160)	(219,297)
Outstanding, ending balance (in shares)	1,817,665	1,658,803
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 1.32	$ 1.24
Granted (in dollars per share)	1.02	2.47
Exercised (in dollars per share)		1.15
Forfeited (in dollars per share)	1.99	1.04
Expired (in dollars per share)	1.76	2.57
Outstanding, ending balance (in dollars per share)	1.24	1.32
Fair Value of Stock Options [Abstract]
Fair value of stock options (in dollars per share)	$ 0.59	$ 1.27
Fair value of stock options vested	$ 229	$ 222

ACCRUED EXPENSES AND OTHER LIABILITIES

12 Months Ended

Jun. 30, 2023

ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]

ACCRUED EXPENSES AND OTHER LIABILITIES

9.	ACCRUED EXPENSES AND OTHER LIABILITIES

Total accrued expenses and other liabilities consist of the following as of the dates presented:

	June 30,
	2023		2022
Deferred revenue	$	566,896	$	452,866
Accrued compensation and related benefits		382,630		614,443
Accrued cooperative advertising		243,861		137,467
Accrued sales tax and franchise taxes		202,091		341,706
Other accrued expenses		1		1
Accrued expenses and other liabilities	$	1,395,479	$	1,546,483

INCOME TAXES, Effective Income Tax Rate Reconciliation (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Effective Income Tax Rate Reconciliation [Abstract]
Anticipated income tax benefit (expense) at the statutory rate	$ 2,872,539	$ (607,414)
State income tax benefit (expense), net of federal tax effect	430,355	(36,928)
Income tax effect of uncertain tax positions	0	7,804
Return to provision adjustments	0	405
Stock-based compensation	(67,627)	131,898
Other changes in deferred income tax assets, net	(16,820)	(24,380)
(Increase) Decrease in valuation allowance	(9,120,483)	10,083
Income tax net (expense) benefit	$ (5,902,036)	$ (518,532)
Combined federal and state statutory tax rate	22.94%	22.45%
Federal income tax rate	21.00%	21.00%
Blended state income tax rate	1.94%	1.45%
Effective tax rate	(43.15%)	17.93%

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

12 Months Ended

Jun. 30, 2023

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION [Abstract]

SHAREHOLDERS' EQUITY

12.	SHAREHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Common Stock

The Company is authorized to issue 50,000,000 shares of common stock, no par value. As of June 30, 2023 and 2022, it had 30,523,705 and 30,747,759 shares of common stock outstanding, respectively. Holders of the Company’s common stock are entitled to one vote for each share held.

Preferred Stock

The Board of Directors is authorized, without further shareholder approval, to issue up to 10,000,000 shares of preferred stock, no par value. The preferred stock may be issued from time to time in one or more series. No shares of preferred stock had been issued as of June 30, 2023.

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 on the accompanying consolidated balance sheets as of June 30, 2023 and 2022, with the purchase price recorded within treasury stock.

During the fiscal years ended June 30, 2023 and 2022, the Company repurchased 358,116 shares and 30,287 shares, respectively, of the Company’s common stock for an aggregate price of $451,815 and $38,164, respectively, pursuant to the repurchase authorization.

Dividends

The Company paid no cash dividends during the fiscal years ended June 30, 2023 and 2022.

Shelf Registration Statement

The Company has an effective shelf registration statement on Form S-3 on file with the U.S. Securities and Exchange Commission (the “SEC”) which allows it to periodically offer and sell, individually or in any combination, shares of common stock, shares of preferred stock, warrants to purchase shares of common stock or preferred stock, and units consisting of any combination of the foregoing types of securities, up to a total of $25.00 million, of which all is available. However, the Company may offer and sell no more than one-third of its public float (which is the aggregate market value of the Company’s outstanding common stock held by non-affiliates) in any 12-month period. The Company’s ability to issue equity securities under its effective shelf registration statement is subject to market conditions.

STOCK-BASED COMPENSATION

Equity Compensation Plans

2018 Equity Incentive Plan

On November 21, 2018, the shareholders of the Company approved the adoption of the Charles & Colvard, Ltd. 2018 Equity Incentive Plan, (the “2018 Plan”). The 2018 Plan will expire by its terms on September 20, 2028.

The 2018 Plan provides for the grant of equity-based awards to selected employees, directors, and consultants of the Company and its affiliates. The aggregate number of shares of the Company’s common stock that could be issued pursuant to awards granted under the 2018 Plan are not to exceed the sum of 3,300,000 plus the number of shares of common stock underlying any award granted under any stock incentive plan maintained by the Company prior to the 2018 Plan (each, a “2018 Prior Plan”) that expires, terminates or is canceled or forfeited under the terms of the 2018 Prior Plans. Stock options granted to employees under the 2018 Plan generally vest over four years and have terms of up to 10 years. The vesting schedules and terms of stock options granted to independent contractors vary depending on the specific grant, but the terms are no longer than 10 years. Stock option awards granted to members of the Board of Directors generally vest at the end of one year from the date of the grant. The vesting schedules of restricted stock awards granted to employees or independent contractors vary depending on the specific grant but are generally four years or less. Only stock options and restricted stock have been granted under the 2018 Plan. As of June 30, 2023 and 2022, there were 1,261,331 and 1,101,211 stock options outstanding under the 2018 Plan, respectively.

2008 Stock Incentive Plan

In May 2008, the shareholders of the Company approved the adoption of the Charles & Colvard, Ltd. 2008 Stock Incentive Plan, as amended on March 31, 2015 and approved by the shareholders of the Company on May 20, 2015 and further amended on March 15, 2016 and approved by the shareholders of the Company on May 18, 2016 (the “2008 Plan”). The 2008 Plan expired (with respect to future grants) on May 26, 2018.

The 2008 Plan authorized the Company to grant stock options, stock appreciation rights, restricted stock, and other equity awards to selected employees, directors, and independent contractors. The aggregate number of shares of the Company’s common stock that could be issued pursuant to awards granted under the 2008 Plan were not to exceed the sum of 6,000,000 plus any shares of common stock subject to an award granted under any stock incentive plan maintained by the Company prior to the 2008 Plan (each, a “2008 Prior Plan”) that is forfeited, cancelled, terminated, expires, or lapses for any reason without the issuance of shares pursuant to the award, or shares subject to an award granted under a 2008 Prior Plan which shares are forfeited to, or repurchased or reacquired by, the Company. Stock options granted to employees under the 2008 Plan generally vest over four years and have terms of up to 10 years. The vesting schedules and terms of stock options granted to independent contractors vary depending on the specific grant, but the terms are no longer than 10 years. Stock option awards granted to members of the Board of Directors generally vest at the end of one year from the date of the grant. The vesting schedules of restricted stock awards granted to employees or independent contractors vary depending on the specific grant but are generally four years or less. Only stock options and restricted stock had been granted under the 2008 Plan. As of June 30, 2023 and 2022, there were 556,334 and 557,592 stock options outstanding under the 2008 Plan, respectively.

Stock-Based Compensation

The following table summarizes the components of the Company’s stock-based compensation included in net income for the periods presented:

	Year Ended June 30,
	2023		2022
Employee stock options	$	225,694	$	243,576
Restricted stock awards		23,734		530,765
Total	$	249,428	$	774,341

No stock-based compensation was capitalized as a cost of inventory during the fiscal years ended June 30, 2023 and 2022.

Stock Options

The following is a summary of the stock option activity for the fiscal years ended June 30, 2023 and 2022:

	Shares			Weighted Average Exercise Price
Outstanding at June 30, 2021		2,235,286		$	1.24
Granted		289,793		$	2.47
Exercised		(622,226	)	$	1.15
Forfeited		(24,753	)	$	1.04
Expired		(219,297	)	$	2.57
Outstanding at June 30, 2022		1,658,803		$	1.32
Granted		270,787		$	1.02
Forfeited		(65,765	)	$	1.99
Expired		(46,160	)	$	1.76
Outstanding at June 30, 2023		1,817,665		$	1.24

The weighted average grant date fair value of stock options granted during the fiscal years ended June 30, 2023 and 2022 was $0.59 and $1.27, respectively. The total fair value of stock options that vested during the fiscal years ended June 30, 2023 and 2022 was approximately $229,000 and $222,000, respectively.

	Year Ended June 30,
	2023			2022
Dividend yield		0.0	%		0.0	%
Expected volatility		61.0	%		61.6	%
Risk-free interest rate		3.75	%		1.46	%
Expected lives (years)		5.4			4.5

The following tables summarize information in connection with stock options outstanding at June 30, 2023:

Options Outstanding						Options Exercisable						Options Vested or Expected to Vest
Balance as of June 30, 2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Balance as of June 30, 2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Balance as of June 30, 2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
	1,817,665		6.27	$	1.24		1,405,916		5.50	$	1.22		1,789,617		6.23	$	1.23

As of June 30, 2023, the unrecognized stock-based compensation expense related to unvested stock options was approximately $171,000, which is expected to be recognized over a weighted average period of approximately 15 months.

The aggregate intrinsic value of stock options outstanding and vested or expected to vest at June 30, 2023 and 2022 was approximately $127,000 and $410,000, respectively. These amounts are before applicable income taxes and represent the closing market price of the Company’s common stock at June 30, 2023 and 2022, respectively, 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 amounts represent the amounts that would have been received by the optionees had these stock options been exercised on those dates. The aggregate intrinsic value of stock options exercised during the fiscal year ended June 30, 2022 was approximately $886,000. During the fiscal year ended June 30, 2022, the total estimated tax benefit associated with certain stock options that were exercised during each period was approximately $89,000. There were no stock options exercised during the fiscal year ended June 30, 2023.

Restricted Stock

The following is a summary of the restricted stock activity for the fiscal years ended June 30, 2023 and 2022:

	Shares			Weighted Average Grant Date Fair Value
Unvested at June 30, 2021		178,750		$	0.72
Granted		242,725		$	2.75
Vested		(242,725	)	$	1.25
Unvested at June 30, 2022		178,750		$	2.75
Granted		178,750		$	0.97
Vested		(134,063	)	$	2.75
Cancelled		(44,687	)	$	2.75
Unvested at June 30, 2023		178,750		$	0.97

The unvested restricted shares as of June 30, 2023 are all performance-based restricted shares and were scheduled to vest, subject to achievement of the underlying performance goals, in July 2023. None of the restricted shares are expected to vest; therefore, no stock-based compensation expense was recorded on these shares during the year ended June 30, 2023. As of June 30, 2023, the estimated unrecognized stock-based compensation expense related to unvested restricted shares subject to achievement of performance goals was approximately $173,000, none of which is expected to be recognized. The performance-based restricted shares expired, as the performance conditions were not met.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 14
-Subparagraph (b)
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 235
-Name Accounting Standards Codification
-Section 50
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-Subparagraph (a)
-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
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-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)

12 Months Ended

Jun. 30, 2023

ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]

Accrued Expenses and Other Liabilities

Total accrued expenses and other liabilities consist of the following as of the dates presented:

	June 30,
	2023		2022
Deferred revenue	$	566,896	$	452,866
Accrued compensation and related benefits		382,630		614,443
Accrued cooperative advertising		243,861		137,467
Accrued sales tax and franchise taxes		202,091		341,706
Other accrued expenses		1		1
Accrued expenses and other liabilities	$	1,395,479	$	1,546,483

COMMITMENTS AND CONTINGENCIES, Purchase Commitments (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($) Option	Jun. 30, 2022 USD ($)	Jul. 28, 2023 USD ($)
Breach of Contract for Purchase of SiC Materials [Member]
Purchase Commitments [Abstract]
Alleged unpaid purchases	$ 3,300	$ 3,300
Breach of Contract for Purchase of SiC Materials [Member] \| Subsequent Event [Member]
Purchase Commitments [Abstract]
Alleged damages				$ 18,500
SiC Materials [Member]
Purchase Commitments [Abstract]
Percentage of materials committed to be purchased		100.00%
Number of options to extend term of exclusive supply agreement \| Option		1
Extension period of exclusive supply agreement		2 years
Total purchase commitment	52,950	$ 52,950
Remaining purchase commitment	24,750	24,750
Minimum annual purchase commitments	4,250	4,250
Purchases	0	1,800	$ 6,290
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

PROPERTY AND EQUIPMENT

12 Months Ended

Jun. 30, 2023

PROPERTY AND EQUIPMENT [Abstract]

PROPERTY AND EQUIPMENT

7.	PROPERTY AND EQUIPMENT

Property and equipment, net, consists of the following as of the dates presented:

	June 30,
	2023			2022
Computer software	$	2,865,994		$	2,392,465
Machinery and equipment		1,203,585			1,182,171
Computer hardware		1,841,972			1,621,198
Leasehold improvements		2,213,330			1,847,227
Furniture and fixtures		676,014			528,742
Total		8,800,895			7,571,803
Less accumulated depreciation		(6,309,326	)		(5,670,627	)
Property and equipment, net	$	2,491,569		$	1,901,176

Depreciation expense for the fiscal years ended June 30, 2023 and 2022 was approximately $639,000 and $471,000, respectively.

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Current assets:
Cash and cash equivalents	$ 10,446,532	$ 15,668,361
Restricted cash	5,122,379	5,510,979
Accounts receivable, net	380,085	2,220,816
Inventory, net	7,476,046	11,024,276
Note receivable	250,000	250,000
Prepaid expenses and other assets	901,354	1,190,012
Total current assets	24,576,396	35,864,444
Long-term assets:
Inventory, net	19,277,530	22,488,524
Property and equipment, net	2,491,569	1,901,176
Intangible assets, net	305,703	265,730
Operating lease right-of-use assets	2,183,232	2,787,419
Deferred income taxes, net	0	5,851,904
Other assets	49,658	49,658
Total long-term assets	24,307,692	33,344,411
TOTAL ASSETS	48,884,088	69,208,855
Current liabilities:
Accounts payable	4,786,155	4,401,229
Operating lease liabilities, current portion	880,126	856,571
Accrued expenses and other liabilities	1,395,479	1,546,483
Total current liabilities	7,061,760	6,804,283
Long-term liabilities:
Noncurrent operating lease liabilities	2,047,742	2,846,805
Total long-term liabilities	2,047,742	2,846,805
Total liabilities	9,109,502	9,651,088
Commitments and contingencies (Note 10)
Shareholders' equity:
Common stock, no par value; 50,000,000 shares authorized; 30,912,108 shares issued and 30,523,705 shares outstanding at June 30, 2023 and 30,778,046 shares issued and 30,747,759 shares outstanding at June 30, 2022	57,242,211	57,242,211
Additional paid-in capital	26,205,919	25,956,491
Treasury stock, at cost, 388,403 shares and 30,287 shares at June 30, 2023 and 2022, respectively	(489,979)	(38,164)
Accumulated deficit	(43,183,565)	(23,602,771)
Total shareholders' equity	39,774,586	59,557,767
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 48,884,088	$ 69,208,855

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Jun. 30, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Cash, Cash Equivalents and Restricted Cash

The reconciliation of cash, cash equivalents, and restricted cash, as presented on the Consolidated Statements of Cash Flows, consists of the following as of the dates presented:

	June 30,
	2023		2022
Cash and cash equivalents	$	10,446,532	$	15,668,361
Restricted cash		5,122,379		5,510,979
Total cash, cash equivalents, and restricted cash	$	15,568,911	$	21,179,340

Reconciliation of Allowance for Sales Returns

The following are reconciliations of the allowance for sales returns balances for the periods presented:

	Year Ended June 30,
	2023			2022
Balance, beginning of year	$	591,000		$	675,000
Additions charged to operations		5,405,613			6,012,069
Sales returns		(5,428,613	)		(6,096,069	)
Balance, end of year	$	568,000		$	591,000

Reconciliation of Allowance for Uncollectible Accounts

The following are reconciliations of the allowance for uncollectible accounts balances as of the periods presented:

	Year Ended June 30,
	2023		2022
Balance, beginning of year	$	85,000	$	71,000
Additions charged to operations		98,000		14,000
Balance, end of year	$	183,000	$	85,000

Estimated Useful Lives of Property and Equipment

Property and equipment are stated at cost and are depreciated over their estimated useful lives using the straight-line method as follows:

Machinery and equipment	5 to 12 years
Computer hardware	3 to 5 years
Computer software	3 years
Furniture and fixtures	5 to 10 years
Leasehold improvements	Shorter of the estimated useful life or lease term

Basic and Diluted Net (Loss) Income per Share

As of the dates presented, the following table reconciles the differences between the basic and diluted net (loss) income per share presentations:

	Year Ended June 30,
	2023			2022
Numerator:
Net (loss) income	$	(19,580,794	)	$	2,373,915

Denominator:
Weighted average common shares outstanding:
Basic		30,376,745			30,363,076
Effect of dilutive securities		-			952,952
Diluted		30,376,745			31,316,028

Net (loss) income per common share:
Basic	$	(0.64	)	$	0.08
Diluted	$	(0.64	)	$	0.08

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Accounts Receivable Reserves (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Allowance for Sales Returns [Member]
Accounts Receivable Reserves [Roll Forward]
Balance, beginning of year	$ 591,000	$ 675,000
Additions charged to operations	5,405,613	6,012,069
Sales returns	(5,428,613)	(6,096,069)
Balance, end of year	568,000	591,000
Allowance for Uncollectible Accounts [Member]
Accounts Receivable Reserves [Roll Forward]
Balance, beginning of year	85,000	71,000
Additions charged to operations	98,000	14,000
Balance, end of year	$ 183,000	$ 85,000

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Intangible Assets (Details)	Jun. 30, 2023
Patent [Member]
Intangible Assets [Abstract]
Useful life	15 years

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Net (Loss) Income per Common Share (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Numerator [Abstract]
Net (loss) income	$ (19,580,794)	$ 2,373,915
Denominator [Abstract]
Weighted average common shares outstanding, Basic (in shares)	30,376,745	30,363,076
Effect of dilutive securities (in shares)	0	952,952
Weighted average common shares outstanding, Diluted (in shares)	30,376,745	31,316,028
Net (Loss) Income per Common Share [Abstract]
Basic (in dollars per share)	$ (0.64)	$ 0.08
Diluted (in dollars per share)	$ (0.64)	$ 0.08
Stock Options [Member]
Net (Loss) Income per Common Share [Abstract]
Shares excluded from the computation of diluted net income per common share (in shares)	1,820,000	758,000
Restricted Stock [Member]
Net (Loss) Income per Common Share [Abstract]
Shares excluded from the computation of diluted net income per common share (in shares)	179,000	45,000

FAIR VALUE MEASUREMENTS

12 Months Ended

Jun. 30, 2023

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

4.	FAIR VALUE MEASUREMENTS

Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party would use in pricing an asset or liability.

The fair value hierarchy consists of three levels based on the reliability of inputs, as follows:

Level 1. Quoted prices in active markets for identical assets and liabilities;

Level 2. Inputs other than Level 1 quoted prices that are directly or indirectly observable; and

Level 3. Unobservable inputs that are not corroborated by market data.

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 Company’s management. The financial instruments identified as subject to fair value measurements on a recurring basis are cash, cash equivalents, and restricted cash, notes receivable, trade accounts receivable, and trade accounts payable. All financial instruments are reflected in the 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 June 30, 2023 or 2022.

INTANGIBLE ASSETS

12 Months Ended

Jun. 30, 2023

INTANGIBLE ASSETS [Abstract]

INTANGIBLE ASSETS

8.	INTANGIBLE ASSETS

Intangible assets, net, consist of the following as of the dates presented:

							Weighted Average
							Remaining
	June 30,						Amortization Period
	2023			2022			(in Years)
Patents	$	1,017,007		$	1,017,007			11.6
Trademarks		296,294			242,342			9.0
License rights		6,718			6,718			-
Total		1,320,019			1,266,067
Less accumulated amortization		(1,014,316	)		(1,000,337	)
Intangible assets, net	$	305,703		$	265,730

Amortization expense for the fiscal years ended June 30, 2023 and 2022 was approximately $14,000 and $8,000, respectively. Amortization expense on existing intangible assets is estimated to be approximately $28,000 for the fiscal year ending June 30, 2024, approximately $27,000 for each of the fiscal years ending June 30, 2025, 2026, and 2027, and approximately $26,000 for the fiscal year ending June 30, 2028. The amortization expense for the remaining unamortized balance of the total intangible assets, net, will be recognized in fiscal years ending after June 30, 2028.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, Concentration of Credit Risk (Details)	12 Months Ended
	Jun. 30, 2023
Minimum [Member]
Concentration of Credit Risk [Abstract]
Customer payment terms	30 days
Maximum [Member]
Concentration of Credit Risk [Abstract]
Customer payment terms	90 days
Traditional [Member] \| Minimum [Member]
Concentration of Credit Risk [Abstract]
Customer payment terms	30 days
Traditional [Member] \| Maximum [Member]
Concentration of Credit Risk [Abstract]
Customer payment terms	90 days

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Shelf Registration Statement (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Shelf Registration Statement [Abstract]
Shelf registration statement	$ 25,000

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Jun. 30, 2023

COMMITMENTS AND CONTINGENCIES [Abstract]

Balance Sheet Classifications of Leases

As of June 30, 2023, the Company’s balance sheet classifications of its leases are as follows:

Operating Leases:
Noncurrent operating lease ROU assets	$	2,183,232

Current operating lease liabilities	$	880,126
Noncurrent operating lease liabilities		2,047,742
Total operating lease liabilities	$	2,927,868

Remaining Future Payments Under Operating Leases

As of June 30, 2023, the Company’s remaining future payments under operating leases for each fiscal year ending June 30 are as follows:

2024	$	893,660
2025		918,236
2026		943,487
2027		317,327
Total lease payments		3,072,710
Less: imputed interest		144,842
Present value of lease payments		2,927,868
Less: current lease liability		880,126
Total long-term lease liability	$	2,047,742

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Options Outstanding (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Stock Options Outstanding and Exercisable [Abstract]
Options outstanding (in shares)	1,817,665	1,658,803	2,235,286
Options outstanding, weighted average remaining contractual life	6 years 3 months 7 days
Options outstanding, weighted average exercise price (in dollars per share)	$ 1.24	$ 1.32	$ 1.24
Options exercisable (in shares)	1,405,916
Options exercisable, weighted average remaining contractual life	5 years 6 months
Options exercisable, weighted average exercise price (in dollars per share)	$ 1.22
Options Vested or Expected to Vest [Abstract]
Options vested or expected to vest (in shares)	1,789,617
Options vested or expected to vest, weighted average remaining contractual life	6 years 2 months 23 days
Options vested or expected to vest, weighted average exercise price (in dollars per share)	$ 1.23
Unrecognized Stock-Based Compensation Expense [Abstract]
Unrecognized stock-based compensation expense	$ 171
Unrecognized stock-based compensation expense, period for recognition	15 months
Options outstanding, aggregate intrinsic value	$ 127	$ 410
Options vested or expected to vest, aggregate intrinsic value	$ 127	410
Options exercised, aggregate intrinsic value		886
Tax benefit associated with stock options exercised		$ 89
Stock option exercises (in shares)	0	622,226

INTANGIBLE ASSETS (Tables)

12 Months Ended

Jun. 30, 2023

INTANGIBLE ASSETS [Abstract]

Intangible Assets, Net

Intangible assets, net, consist of the following as of the dates presented:

							Weighted Average
							Remaining
	June 30,						Amortization Period
	2023			2022			(in Years)
Patents	$	1,017,007		$	1,017,007			11.6
Trademarks		296,294			242,342			9.0
License rights		6,718			6,718			-
Total		1,320,019			1,266,067
Less accumulated amortization		(1,014,316	)		(1,000,337	)
Intangible assets, net	$	305,703		$	265,730

NOTE RECEIVABLE

12 Months Ended

Jun. 30, 2023

NOTE RECEIVABLE [Abstract]

NOTE RECEIVABLE

5.	NOTE RECEIVABLE

On March 5, 2021, the Company entered into a $250,000 convertible promissory note agreement (the “ Convertible Promissory Note”), with an unrelated third-party strategic marketing partner. The Convertible Promissory Note is unsecured and was scheduled originally to mature on March 5, 2022. In February 2022, the Company entered into an amendment to the Convertible Promissory Note that was effective as of December 9, 2021 and changed the maturity date to September 30, 2022. Effective September 26, 2022, the Company further amended the Convertible Promissory Note (the “September 2022 Amendment”) and changed the maturity date to June 20, 2024 (the “Maturity Date”). In accordance with the terms of the September 2022 Amendment, the note receivable is classified as a current note receivable within the accompanying consolidated financial statements as of June 30, 2023.

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. Principal outstanding during an event of default accrues interest at the rate of 5% per annum. In accordance with the terms of the September 2022 Amendment, accrued and unpaid interest on the Convertible Promissory Note is classified as a current asset and included in other current assets in the accompanying consolidated financial statements as of June 30, 2023.

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) become due and payable to the Company, or (ii) convert into equity units at the specified conversion price in accordance with the terms of the Convertible Promissory Note.

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Summary Financial Information by Reportable Segment (Details)	12 Months Ended
	Jun. 30, 2023 USD ($) Segment	Jun. 30, 2022 USD ($)
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]
Number of operating segments \| Segment	2
Number of reportable segments \| Segment	2
Summary Information by Reportable Segment [Abstract]
Net sales	$ 29,946,234	$ 43,089,024
Product line cost of goods sold	25,212,383	22,845,702
Depreciation and amortization	653,157	479,308
Capital expenditures	1,229,571	1,496,471
Product Line [Member]
Summary Information by Reportable Segment [Abstract]
Product line cost of goods sold	15,142,068	20,102,490
Product line gross profit	14,804,166	22,986,534
Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	23,985,614	29,712,230
Product line cost of goods sold	12,397,091	13,932,700
Product line gross profit	11,588,523	15,779,530
Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	5,960,620	13,376,794
Product line cost of goods sold	2,744,977	6,169,790
Product line gross profit	3,215,643	7,207,004
Operating and Reportable Segments [Member] \| Online Channels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	21,492,880	26,780,049
Product line cost of goods sold	9,920,325	11,047,662
Product line gross profit	11,572,555	15,732,387
Depreciation and amortization	215,978	235,643
Capital expenditures	423,150	305,586
Operating and Reportable Segments [Member] \| Online Channels [Member] \| Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	19,607,941	23,539,347
Product line cost of goods sold	9,214,749	9,837,830
Product line gross profit	10,393,192	13,701,517
Operating and Reportable Segments [Member] \| Online Channels [Member] \| Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,884,939	3,240,702
Product line cost of goods sold	705,576	1,209,832
Product line gross profit	1,179,363	2,030,870
Operating and Reportable Segments [Member] \| Traditional [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	8,453,354	16,308,975
Product line cost of goods sold	5,221,743	9,054,828
Product line gross profit	3,231,611	7,254,147
Depreciation and amortization	437,179	243,665
Capital expenditures	806,421	1,190,885
Operating and Reportable Segments [Member] \| Traditional [Member] \| Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	4,377,673	6,172,883
Product line cost of goods sold	3,182,342	4,094,870
Product line gross profit	1,195,331	2,078,013
Operating and Reportable Segments [Member] \| Traditional [Member] \| Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	4,075,681	10,136,092
Product line cost of goods sold	2,039,401	4,959,958
Product line gross profit	$ 2,036,280	$ 5,176,134

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Common and Preferred Stock (Details)	12 Months Ended
	Jun. 30, 2023 shares $ / shares	Jun. 30, 2022 $ / shares shares
Common Stock [Abstract]
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0	$ 0
Common stock, shares outstanding (in shares)	30,523,705	30,747,759
Common stock, votes per share	1
Preferred Stock [Abstract]
Preferred stock, shares authorized (in shares)	10,000,000
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0
Preferred stock, shares issued (in shares)	0

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Jun. 30, 2022
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	30,912,108	30,778,046
Common stock, shares outstanding (in shares)	30,523,705	30,747,759
Treasury stock (in shares)	388,403	30,287

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Net Sales by Geographic Area (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Net Sales by Geographic Area [Abstract]
Net sales	$ 29,946,234	$ 43,089,024
Reportable Geographical Component [Member] \| United States [Member]
Net Sales by Geographic Area [Abstract]
Net sales	29,056,696	41,138,538
Reportable Geographical Component [Member] \| International [Member]
Net Sales by Geographic Area [Abstract]
Net sales	$ 889,538	$ 1,950,486

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Dividends (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Dividends [Abstract]
Cash dividends	$ 0	$ 0

EMPLOYEE BENEFIT PLAN

12 Months Ended

Jun. 30, 2023

EMPLOYEE BENEFIT PLAN [Abstract]

EMPLOYEE BENEFIT PLAN

15.	EMPLOYEE BENEFIT PLAN

All full-time employees who meet certain length of service requirements are eligible to participate in and receive benefits from the Company’s 401(k) Plan. This plan provides for matching contributions by the Company in such amounts as the Board of Directors may annually determine, as well as a 401(k) option under which eligible participants may defer a portion of their salaries. The Company contributed a total of approximately $171,000 and $76,000 to its employee benefit defined contribution plan during the fiscal years ended June 30, 2023 and 2022, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (q)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (l)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (o)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (p)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Restricted Stock (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Unrecognized Stock-Based Compensation Expense [Abstract]
Stock-based compensation expense	$ 249,428	$ 774,341
Restricted Stock [Member]
Restricted Stock Activity [Roll Forward]
Unvested, beginning balance (in shares)	178,750	178,750
Shares awarded (in shares)	178,750	242,725
Vested (in shares)	(134,063)	(242,725)
Canceled (in shares)	(44,687)
Unvested, ending balance (in shares)	178,750	178,750
Weighted Average Grant Date Fair Value [Roll Forward]
Unvested, beginning balance (in dollars per share)	$ 2.75	$ 0.72
Granted (in dollars per share)	0.97	2.75
Vested (in dollars per share)	2.75	1.25
Canceled (in dollars per share)	2.75
Unvested, ending balance (in dollars per share)	$ 0.97	$ 2.75
Unrecognized Stock-Based Compensation Expense [Abstract]
Shares expected to vest (in shares)	0
Stock-based compensation expense	$ 0
Unrecognized stock-based compensation expense	$ 173,000

INCOME TAXES, Tax Credits and Net Operating Loss Carryforwards (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Income Taxes [Abstract]
Deferred tax assets	$ 0	$ 5,851,904
Valuation allowance	10,562,696	1,442,213
Federal [Member]
Income Taxes [Abstract]
Net operating loss carryforwards	24,760,000	16,530,000
North Carolina [Member]
Income Taxes [Abstract]
Net operating loss carryforwards	20,010,000.00	19,770,000
Hong Kong [Member]
Income Taxes [Abstract]
Net operating loss carryforwards	6,030,000.00	6,030,000.00
Valuation allowance	$ 996,000	$ 996,000

DEBT

12 Months Ended

Jun. 30, 2023

DEBT [Abstract]

DEBT

11.

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. Prior to the July 31, 2022 amendment, each advance under the JPMorgan Chase Credit Facility would have accrued interest at a rate equal to JPMorgan Chase’s monthly LIBOR rate multiplied by a statutory reserve rate for eurocurrency funding to which JPMorgan Chase is subject with respect to the adjusted LIBOR rate as established by the U.S. Federal Reserve Board, plus a margin of 1.25% per annum. Interest is calculated monthly on an actual/360-day basis and payable monthly in arrears. Principal outstanding during an event of default, at JPMorgan Chase’s option, accrues interest at a rate of 3% per annum in excess of the above rate. Any advance may be prepaid in whole or in part without penalty at any time.

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 June 30, 2023, the Company had not borrowed against the JPMorgan Chase Credit Facility.

The Company had no outstanding debt during the fiscal year ended June 30, 2023.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details