0001140361-23-052626 | 10-Q | XBRL Viewer

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)

3 Months Ended

Sep. 30, 2023

SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]

Summary Financial Information by Reportable Segment

Summary financial information by reportable segment is as follows:

	Three Months Ended September 30, 2023
	Online Channels		Traditional		Total
Net sales
Finished jewelry	$	3,596,942	$	704,317	$	4,301,259
Loose jewels		319,744		332,020		651,764
Total	$	3,916,686	$	1,036,337	$	4,953,023

Product line cost of goods sold
Finished jewelry	$	1,575,600	$	383,567	$	1,959,167
Loose jewels		99,978		139,396		239,374
Total	$	1,675,578	$	522,963	$	2,198,541

Product line gross profit
Finished jewelry	$	2,021,342	$	320,750	$	2,342,092
Loose jewels		219,766		192,624		412,390
Total	$	2,241,108	$	513,374	$	2,754,482

Depreciation and amortization	$	48,758	$	129,533	$	178,291

Capital expenditures	$	120,145	$	96,907	$	217,052

	Three Months Ended September 30, 2022
	Online Channels		Traditional		Total
Net sales
Finished jewelry	$	4,403,589	$	1,136,817	$	5,540,406
Loose jewels		448,897		1,384,780		1,833,677
Total	$	4,852,486	$	2,521,597	$	7,374,083

Product line cost of goods sold
Finished jewelry	$	1,970,111	$	636,588	$	2,606,699
Loose jewels		162,699		662,924		825,623
Total	$	2,132,810	$	1,299,512	$	3,432,322

Product line gross profit
Finished jewelry	$	2,433,478	$	500,229	$	2,933,707
Loose jewels		286,198		721,856		1,008,054
Total	$	2,719,676	$	1,222,085	$	3,941,761

Depreciation and amortization	$	63,387	$	74,324	$	137,711

Capital expenditures	$	136,988	$	293,412	$	430,400

Reconciliation of Product Line Cost of Goods Sold

A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the condensed consolidated financial statements is as follows:

	Three Months Ended September 30,
	2023		2022
Product line cost of goods sold	$	2,198,541	$	3,432,322
Non-capitalized manufacturing and production control expenses		597,885		377,053
Freight out		204,216		275,737
Inventory write-downs		-		119,000
Other inventory adjustments		7,865		(118,102	)
Cost of goods sold	$	3,008,507	$	4,086,010

Reconciliation of Product Line Gross Profit

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

	Three Months Ended September 30,
	2023			2022
Product line gross profit	$	2,754,482		$	3,941,761
Non-allocated cost of goods sold		(809,966	)		(653,688	)
Sales and marketing		(2,721,965	)		(3,107,946	)
General and administrative		(1,854,268	)		(1,413,476	)
Total other income		92,260			40,201
Loss before income taxes	$	(2,539,457	)	$	(1,193,148	)

Net Sales by Geographic Area

The following presents net sales data by geographic area:

	Three Months Ended September 30,
	2023		2022
Net sales:
United States	$	4,768,910	$	7,095,373
International		184,113		278,710
Total	$	4,953,023	$	7,374,083

INCOME TAXES

3 Months Ended

Sep. 30, 2023

INCOME TAXES [Abstract]

INCOME TAXES

8.	INCOME TAXES

For the three months ended September 30, 2023, the Company’s statutory tax rate was 22.94% and consisted of the federal income tax rate of 21.00% and a blended state income tax rate of 1.94%, net of the federal benefit. For the three months ended September 30, 2022, the Company’s statutory tax rate was 22.98% and consisted of the federal income tax rate of 21.00% and a blended state income tax rate of 1.98%, net of the federal benefit. For the three months ended September 30, 2023, the Company’s effective tax rate was zero. The Company’s effective income tax rate reflects the effect of federal and state income taxes on earnings and the impact of differences in book and tax accounting arising primarily from the permanent tax benefits associated with stock-based compensation transactions during the accounting period then ended.

The Company recognized zero net income tax benefit for the quarter ended September 30, 2023, compared with a net income benefit of approximately $303,000 for the quarter ended September 30, 2022.

As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets. As of September 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.

- 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
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

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

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

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

+ Details

ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]
Deferred revenue	$ 304,399	$ 566,896
Accrued compensation and related benefits	241,124	382,630
Accrued sales tax and franchise tax	144,434	202,091
Accrued cooperative advertising	235,427	243,861
Other accrued expenses	1	1
Total accrued expenses and other liabilities	$ 925,385	$ 1,395,479

ACCRUED EXPENSES AND OTHER LIABILITIES

3 Months Ended

Sep. 30, 2023

ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]

ACCRUED EXPENSES AND OTHER LIABILITIES

7.	ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities, current, consist of the following as of the dates presented:

	September 30, 2023		June 30, 2023
Deferred revenue	$	304,399	$	566,896
Accrued compensation and related benefits		241,124		382,630
Accrued sales taxes and franchise tax		144,434		202,091
Accrued cooperative advertising		235,427		243,861
Other accrued expenses		1		1
Total accrued expenses and other liabilities	$	925,385	$	1,395,479

DESCRIPTION OF BUSINESS

3 Months Ended

Sep. 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 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.

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

3 Months Ended

Sep. 30, 2023

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION [Abstract]

SHAREHOLDERS' EQUITY

11.	SHAREHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Repurchases of Common Stock

Pursuant to authority granted by the Company’s Board of Directors on April 29, 2022, the Company can repurchase up to approximately $5.00 million in shares outstanding of the Company’s common stock over the three-year period ending April 29, 2025. Pursuant to the terms of the repurchase authorization, the common stock share repurchases are generally at the discretion of the Company’s management. As the Company repurchases its common shares, which have no par value, the Company reports such shares held as treasury stock in the accompanying condensed consolidated balance sheets with the purchase price recorded within treasury stock.

The Company repurchased no shares of its common stock during the three-month period ended September 30, 2023. During the three-month period ended September 30, 2022, the Company repurchased 358,116 shares of the Company’s common stock for an aggregate price of $451,815 pursuant to the repurchase authorization.

Dividends

The Company has paid no cash dividends during the current fiscal year through September 30, 2023.

STOCK-BASED COMPENSATION

Stock-Based Compensation

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

	Three Months Ended September 30,
	2023		2022
Employee stock options	$	51,444	$	72,498
Restricted stock awards		-		23,734
Totals	$	51,444	$	96,232

No stock-based compensation was capitalized as a cost of inventory during the three months ended September 30, 2023 or 2022.

Stock Options – The following is a summary of the stock option activity for the three months ended September 30, 2023:

	Shares			Weighted Average Exercise Price
Outstanding, June 30, 2023		1,817,665		$	1.24
Forfeited		(18,671	)	$	1.79
Expired		(30,829	)	$	1.41
Outstanding, September 30, 2023		1,768,165		$	1.23

The weighted average grant date fair value of stock options granted during the three months ended September 30, 2022 was approximately $1.32. No stock options were granted during the three months ended September 30, 2023. The total fair value of stock options that vested during the three months ended September 30, 2023 and 2022 was approximately $36,000 and $53,000, respectively.

The following table summarizes information about stock options outstanding at September 30, 2023:

Options Outstanding						Options Exercisable						Options Vested or Expected to Vest
Balance as of 9/30/2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Balance as of 9/30/2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Balance as of 9/30/2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
	1,768,165		5.99	$	1.23		1,433,192		5.32	$	1.22		1,750,395		5.96	$	1.23

As of September 30, 2023, the unrecognized stock-based compensation expense related to unvested stock options was approximately $102,238, which is expected to be recognized over a weighted average period of approximately 15 months.

The aggregate intrinsic value of stock options outstanding, exercisable, and vested or expected to vest at September 30, 2023 and 2022 was approximately $0 and $157,000, respectively. These amounts are before applicable income taxes and represents the closing market price of the Company’s common stock at September 30, 2023 less the grant price, multiplied by the number of stock options that had a grant price that is less than the closing market price. These values represent the amount that would have been received by the optionees had these stock options been exercised on that date. There were no stock options exercised during the three-month-periods ended September 30, 2023 and 2022.

Restricted Stock

During the three-month period ended September 30, 2023, there were no restricted stock shares awarded to plan participants. The unvested restricted shares as of September 30, 2023, total 178,750, with a weighted average grant date fair value of $0.97, are all performance-based restricted shares and were scheduled to vest in July 2023, subject to achievement of the underlying performance goals. None of these shares vested and subsequent to September 30, 2023, these shares were cancelled as the underlying performance goals were not met.

- Definition

The entire disclosure for equity.

+ References

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

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

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

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-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
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481004/946-505-50-6

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

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-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
-SubTopic 10
-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
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-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
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 16
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-16

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Gross Profit (Details) - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Reconciliation of Gross Profit [Abstract]
Non-allocated cost of goods sold	$ (3,008,507)	$ (4,086,010)
Sales and marketing	(2,721,965)	(3,107,946)
General and administrative	(1,854,268)	(1,413,476)
Total other income	92,260	40,201
Loss before income taxes	(2,539,457)	(1,193,148)
Product Line [Member]
Reconciliation of Gross Profit [Abstract]
Product line gross profit	2,754,482	3,941,761
Non-allocated cost of goods sold	(2,198,541)	(3,432,322)
Segment Reconciling Item [Member]
Reconciliation of Gross Profit [Abstract]
Non-allocated cost of goods sold	(809,966)	(653,688)
Sales and marketing	(2,721,965)	(3,107,946)
General and administrative	(1,854,268)	(1,413,476)
Total other income	$ 92,260	$ 40,201

- Definition

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

+ References

+ 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: 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 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-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 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

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

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479557/942-235-S99-1

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 25
-Paragraph 1
-SubTopic 20
-Topic 940
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481913/940-20-25-1

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

INVENTORIES

3 Months Ended

Sep. 30, 2023

INVENTORIES [Abstract]

INVENTORIES

5.	INVENTORIES

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

	September 30, 2023		June 30, 2023
Finished jewelry:
Raw materials	$	1,493,987	$	1,288,906
Work-in-process		1,147,154		1,223,670
Finished goods		13,546,994		12,772,611
Finished goods on consignment		2,199,128		2,039,506
Total finished jewelry	$	18,387,263	$	17,324,693
Loose jewels:
Raw materials	$	317,392	$	421,603
Work-in-process		5,712,141		6,131,853
Finished goods		2,338,373		2,294,270
Finished goods on consignment		260,998		254,323
Total loose jewels		8,628,904		9,102,049
Total supplies inventory		313,558		326,834
Total inventory	$	27,329,725	$	26,753,576

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

	September 30, 2023		June 30, 2023
Short-term portion	$	8,263,043	$	7,476,046
Long-term portion		19,066,682		19,277,530
Total	$	27,329,725	$	26,753,576

The Company’s work-in-process inventories include raw SiC crystals on which processing costs, such as labor and sawing, have been incurred; and components, such as metal castings and finished goods set with moissanite jewels, that have been issued to jobs in the manufacture of finished jewelry. The Company’s moissanite jewel manufacturing process involves the production of intermediary shapes, called “preforms,” that vary depending upon the expected size and shape of the finished jewel. To maximize manufacturing efficiencies, preforms may be made in advance of current finished inventory needs but remain in work-in-process inventories. As of September 30, 2023 and June 30, 2023, work-in-process inventories issued to active production jobs approximated $1.80 million and $1.99 million, respectively.

The Company’s moissanite and lab grown diamond jewels do not degrade in quality over time and inventory generally consists of the shapes and sizes most commonly used in the jewelry industry. Product obsolescence is closely monitored and reviewed by management as of and for each financial reporting period.

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

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

The Company’s inventories are stated at the lower of cost or net realizable value on an average cost basis. Each accounting period the Company evaluates the valuation and classification of inventories including the need for potential adjustments to inventory-related reserves, which include significant estimates by management, including the effect of market factors and sales trends. Changes to the Company’s inventory reserves and allowances are accounted for in the accounting period in which a change in such reserves and allowances is observed and deemed appropriate, including changes in management’s estimates used in the process to determine such reserves and valuation allowances.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,539,457)	$ (890,192)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	178,291	137,711
Stock-based compensation	51,444	96,232
Provision for uncollectible accounts	79,000	0
Recovery of sales returns	(81,000)	(36,000)
Inventory write-downs	0	119,000
Provision for accounts receivable discounts	9,996	3,250
Deferred income taxes	0	(302,956)
Changes in operating assets and liabilities:
Accounts receivable	(70,604)	695,165
Inventory	(576,149)	(3,174,668)
Prepaid expenses and other assets, net	86,410	(36,616)
Accounts payable	866,063	316,819
Accrued expenses and other liabilities	(669,377)	(598,883)
Net cash used in operating activities	(2,665,383)	(3,671,138)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(217,052)	(430,400)
Payments for intangible assets	(14,456)	(2,214)
Net cash used in investing activities	(231,508)	(432,614)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock	0	(451,815)
Net cash used in financing activities	0	(451,815)
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(2,896,891)	(4,555,567)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	15,568,911	21,179,340
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	12,672,020	16,623,773
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes	$ 0	$ 5,900

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)

3 Months Ended

Sep. 30, 2023

ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities, current, consist of the following as of the dates presented:

	September 30, 2023		June 30, 2023
Deferred revenue	$	304,399	$	566,896
Accrued compensation and related benefits		241,124		382,630
Accrued sales taxes and franchise tax		144,434		202,091
Accrued cooperative advertising		235,427		243,861
Other accrued expenses		1		1
Total accrued expenses and other liabilities	$	925,385	$	1,395,479

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Options Outstanding (Details) - Stock Options [Member] - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023
Stock Options Outstanding and Exercisable [Abstract]
Options outstanding, balance as of end of period (in shares)	1,768,165		1,817,665
Options outstanding, weighted average remaining contractual life	5 years 11 months 26 days
Options outstanding, weighted average exercise price (in dollars per share)	$ 1.23		$ 1.24
Options exercisable, balance as of end of period (in shares)	1,433,192
Options exercisable, weighted average remaining contractual life	5 years 3 months 25 days
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, balance as of end of period (in shares)	1,750,395
Options vested or expected to vest, weighted average remaining contractual life	5 years 11 months 15 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	$ 102,238
Unrecognized stock-based compensation expense, period for recognition	15 months
Options outstanding, aggregate intrinsic value	$ 0	$ 157,000
Options exercisable, aggregate intrinsic value	0	157,000
Options vested or expected to vest, aggregate intrinsic value	$ 0	$ 157,000
Exercised (in shares)	0	0

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Sep. 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

Basis of Presentation and Principles of Consolidation – The accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. However, certain information or footnote disclosures normally included in complete financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q include all normal and recurring adjustments necessary for the fair statement of the results for the interim periods presented. The results for the three months ended September 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024.

The condensed consolidated financial statements as of September 30, 2023 and for the three months ended September 30, 2023 and 2022 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of June 30, 2023 is derived from the audited financial statements as of that date. The accompanying statements should be read in conjunction with the audited financial statements and related notes contained in Item 8 of the Company’s Annual Report on Form 10-K (the “2023 Annual Report”) for the fiscal year ended June 30, 2023 or Fiscal 2023 filed with the SEC on October 12, 2023.

The accompanying condensed consolidated financial statements as of September 30, 2023 and June 30, 2023 and for the three months ended September 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 incorporated as of February 24, 2022; Charles & Colvard Direct, LLC; and Charles & Colvard (HK) Ltd., the Company’s Hong Kong subsidiary, which was entered into dormancy as of September 30, 2020 following its re-activation in December 2017. Charles & Colvard (HK) Ltd. previously became dormant in the second quarter of 2009 and has had no operating activity since 2008. Charles & Colvard Direct, LLC, had no operating activity during the three-month periods September 30, 2023 or 2022. All intercompany accounts have been eliminated.

Significant Accounting Policies – In the opinion of the Company’s management, the Company’s significant accounting policies used for the three months ended September 30, 2023, are consistent with those used for the fiscal year ended June 30, 2023. Accordingly, please refer to Note 2 to the Consolidated Financial Statements in the 2023 Annual Report for the Company’s significant accounting policies.

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.

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 expires by its terms on July 31, 2024, the Company is required to keep $5.1 million in a cash deposit account held by JPMorgan Chase. Such amount is held as security for the Company’s credit facility from JPMorgan Chase. Accordingly, this cash deposit held by JPMorgan Chase is classified as restricted cash for financial reporting purposes on the Company’s condensed consolidated balance sheets. For additional information regarding the Company’s cash collateralized credit facility, see Note 10, “Debt.”

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

	September 30, 2023		June 30, 2023
Cash and cash equivalents	$	7,592,698	$	10,446,532
Restricted cash		5,079,322		5,122,379
Total cash, cash equivalents, and restricted cash	$	12,672,020	$	15,568,911

NOTE RECEIVABLE (Details) - Convertible Promissory Note [Member] - USD ($)	Sep. 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

COMMITMENTS AND CONTINGENCIES, Purchase Commitments (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 30, 2023 USD ($) Option	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Jul. 28, 2023 USD ($)	Jun. 30, 2023 USD ($)
Breach of Contract for Purchase of SiC Materials [Member]
Purchase Commitments [Abstract]
Alleged unpaid purchases					$ 3,300
Alleged damages				$ 18,500
SiC Materials [Member]
Purchase Commitments [Abstract]
Percentage of materials committed to be purchased	100.00%
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
Purchases	0	$ 1,800	0
SiC Materials [Member] \| Minimum [Member]
Purchase Commitments [Abstract]
Minimum annual purchase commitments	4,000		4,000
SiC Materials [Member] \| Maximum [Member]
Purchase Commitments [Abstract]
Minimum annual purchase commitments	$ 10,000		$ 10,000

DEBT

3 Months Ended

Sep. 30, 2023

DEBT [Abstract]

DEBT

10.

DEBT

Line of Credit

Effective July 7, 2021, the Company obtained from JPMorgan Chase a $5.00 million cash collateralized line of credit facility (the “JPMorgan Chase Credit Facility”). The JPMorgan Chase Credit Facility may be used for general corporate and working capital purposes, including permitted acquisitions and certain additional indebtedness for borrowed money, installment obligations, and obligations under capital and operating leases. The JPMorgan Chase Credit Facility is secured by a cash deposit in the amount of $5.1 million held by JPMorgan Chase as collateral for the line of credit facility and was scheduled to mature on July 31, 2022. Effective July 28, 2022, the JPMorgan Chase Credit Facility was amended to, among other things, extend the maturity date to July 31, 2023, and append the Company’s obligations under the JPMorgan Chase Credit Facility to be guaranteed by the Company’s wholly-owned subsidiaries, Charles & Colvard Direct, LLC, charlesandcolvard.com, LLC, and moissaniteoutlet.com, LLC. Effective, June 21, 2023, the JPMorgan Chase Credit Facility was amended further to extend the maturity date to July 31, 2024.

Each advance under the JPMorgan Chase Credit Facility, as amended, accrues interest at a rate equal to the sum of JPMorgan Chase’s monthly secured overnight financing rate (“SOFR rate”) to which JPMorgan Chase is subject with respect to the adjusted SOFR rate as established by the U.S. Federal Reserve Board, plus a margin of 1.25% per annum and an unsecured to secured interest rate adjustment of 0.10% per annum. Interest is calculated monthly on an actual/360-day basis and payable monthly in arrears. Principal outstanding during an event of default, at JPMorgan Chase’s option, accrues interest at a rate of 3% per annum in excess of the above rate. Any advance may be prepaid in whole or in part without penalty at any time.

The JPMorgan Chase Credit Facility is evidenced by a credit agreement, as amended, between JPMorgan Chase and the Company (the “JPMorgan Chase Credit Agreement”), effective as of June 21, 2023, and customary ancillary documents, in the principal amount not to exceed $5.00 million at any one time outstanding and a line of credit note (the “JPMorgan Chase Line of Credit Note”) in which the Company promises to pay on or before July 31, 2024, the amount of $5.00 million or so much thereof as may be advanced and outstanding. In the event of default, JPMorgan Chase, at its option, may accelerate the maturity of advances outstanding under the JPMorgan Chase Credit Facility. The JPMorgan Chase Credit Agreement and ancillary documents contain customary covenants, representations, fees, debt, contingent obligations, liens, loans, leases, investments, mergers, acquisitions, divestitures, subsidiaries, affiliate transactions, changes in control, as well as indemnity, expense reimbursement, and confidentiality provisions.

In connection with the JPMorgan Chase Credit Facility, effective July 7, 2021, the Company incurred a non-refundable origination fee in the amount of $10,000 that was paid in full to JPMorgan Chase upon execution of the JPMorgan Chase Credit Facility on July 12, 2021. No origination fee was paid to JPMorgan Chase in connection with amending the JPMorgan Chase Credit Facility on July 28, 2022, and June 21, 2023. The Company also agreed to maintain its primary banking depository and disbursement relationship with JPMorgan Chase.

Events of default under the JPMorgan Chase Credit Facility include, without limitation, a default, event of default, or event that would constitute a default or event of default (pending giving notice or lapse of time or both), of any provision of the JPMorgan Chase Credit Agreement, the JPMorgan Chase Line of Credit Note, or any other instrument or document executed in connection with the JPMorgan Chase Credit Agreement or with any of the indebtedness, liabilities, and obligations of the Company to JPMorgan Chase or that would result from the extension of credit by JPMorgan Chase to the Company.

As of September 30, 2023, the Company had not borrowed against the JPMorgan Chase Credit Facility and had no outstanding debt as of the period then ended.

- 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
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

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(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock Option Activity (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Stock Option Activity [Roll Forward]
Outstanding, beginning balance (in shares)	1,817,665
Forfeited (in shares)	(18,671)
Expired (in shares)	(30,829)
Outstanding, ending balance (in shares)	1,768,165
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 1.24
Forfeited (in dollars per share)	1.79
Expired (in dollars per share)	1.41
Outstanding, ending balance (in dollars per share)	$ 1.23
Fair Value of Stock Options [Abstract]
Fair value of stock options (in dollars per share)		$ 1.32
Granted (in shares)	0
Fair value of stock options vested	$ 36	$ 53

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Tables)

3 Months Ended

Sep. 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:

	September 30, 2023			June 30, 2023
Customer A		22	%		24	%
Customer B		12	%		14	%
Customer C		*	%		14	%
Customer D		26	%		**	%

*	Customer C did not have a balance that represented 10% or more of total gross accounts receivable as of September 30, 2023.

**	Customer D did not have a balance that represented 10% or more of total gross accounts receivable as of June 30, 2023. A significant portion of sales is derived from certain customer relationships.

The following is a summary of customers that represent 10% or more of total net sales for the periods presented:

	Three Months Ended September 30,
	2023			2022
Customer A		14	%		17	%

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Total
Balance at Jun. 30, 2022	$ 57,242,211	$ 25,956,491	$ (38,164)	$ (23,602,771)	$ 59,557,767
Balance (in shares) at Jun. 30, 2022					30,747,759
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	96,232	0	0	$ 96,232
Cancellation of restricted stock	$ 0	0	0	0	0
Cancellation of restricted stock (in shares)	(44,688)
Repurchases of common stock	$ 0	0	$ (451,815)	0	$ (451,815)
Repurchases of common stock (in shares)			(358,116)		(358,116)
Net loss	0	0	$ 0	(890,192)	$ (890,192)
Balance at Sep. 30, 2022	57,242,211	26,052,723	(489,979)	(24,492,963)	$ 58,311,992
Balance (in shares) at Sep. 30, 2022					30,344,955
Balance at Jun. 30, 2023	57,242,211	26,205,919	(489,979)	(43,183,565)	$ 39,774,586
Balance (in shares) at Jun. 30, 2023					30,523,705
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	0	51,444	0	0	$ 51,444
Repurchases of common stock (in shares)					0
Net loss	0	0	0	(2,539,457)	$ (2,539,457)
Balance at Sep. 30, 2023	$ 57,242,211	$ 26,257,363	$ (489,979)	$ (45,723,022)	$ 37,286,573
Balance (in shares) at Sep. 30, 2023					30,523,705

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482765/220-10-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-8

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-9

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 13: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 830
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480167/946-830-55-10

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section 45
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483581/946-220-45-7

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 16: 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 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(9))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(1)(d))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 20: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

Reference 32: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483499/205-20-50-7

Reference 35: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 230
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 28
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482740/230-10-45-28

Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1A

Reference 37: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1B

Reference 38: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 39: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 852
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481372/852-10-55-10

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 830
-Name Accounting Standards Codification
-Section 55
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480167/946-830-55-12

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-04(19))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.6-05(4))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(4)(b))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(6))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(7))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(31))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(30))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 14: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 310
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 4.E)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480418/310-10-S99-2

+ Details

NET LOSS PER COMMON SHARE (Details) - USD ($)	3 Months Ended
NET LOSS PER COMMON SHARE (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Numerator [Abstract]
Net loss	$ (2,539,457)	$ (890,192)
Denominator [Abstract]
Weighted average common shares outstanding, Basic (in shares)	30,444,954	30,433,195
Effects of dilutive securities (in shares)	0	0
Weighted average common shares outstanding, Diluted (in shares)	30,444,954	30,433,195
Net Loss Per Common Share [Abstract]
Basic (in dollars per share)	$ (0.08)	$ (0.03)
Diluted (in dollars per share)	$ (0.08)	$ (0.03)
Stock Options [Member]
Net Loss per Common Share [Abstract]
Shares excluded from the computation of diluted net income per common share (in shares)	1,770,000	1,710,000
Restricted Stock [Member]
Net Loss per Common Share [Abstract]
Shares excluded from the computation of diluted net income per common share (in shares)	179,000

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Current assets:
Cash and cash equivalents	$ 7,592,698	$ 10,446,532
Restricted cash	5,079,322	5,122,379
Accounts receivable, net	442,693	380,085
Inventory, net	8,263,043	7,476,046
Note receivable	250,000	250,000
Prepaid expenses and other assets	969,440	901,354
Total current assets	22,597,196	24,576,396
Long-term assets:
Inventory, net	19,066,682	19,277,530
Property and equipment, net	2,534,713	2,491,569
Intangible assets, net	315,776	305,703
Operating lease right-of-use assets	2,028,736	2,183,232
Other assets	49,658	49,658
Total long-term assets	23,995,565	24,307,692
TOTAL ASSETS	46,592,761	48,884,088
Current liabilities:
Accounts payable	5,652,218	4,786,155
Operating lease liabilities, current portion	886,117	880,126
Accrued expenses and other liabilities	925,385	1,395,479
Total current liabilities	7,463,720	7,061,760
Long-term liabilities:
Noncurrent operating lease liabilities	1,842,468	2,047,742
Total long-term liabilities	1,842,468	2,047,742
Total liabilities	9,306,188	9,109,502
Commitments and contingencies (Note 9)
Shareholders' equity:
Common stock, no par value; 50,000,000 shares authorized; 30,912,108 shares issued and 30,523,705 shares outstanding at September 30, 2023 and 30,912,108 shares issued and 30,523,705 shares outstanding at June 30, 2023	57,242,211	57,242,211
Additional paid-in capital	26,257,363	26,205,919
Treasury stock, at cost, 388,403 shares at both September 30, 2023 and June 30, 2023	(489,979)	(489,979)
Accumulated deficit	(45,723,022)	(43,183,565)
Total shareholders' equity	37,286,573	39,774,586
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 46,592,761	$ 48,884,088

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

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Restricted Stock (Details) - Restricted Stock [Member] - $ / shares	1 Months Ended	3 Months Ended
	Nov. 09, 2023	Sep. 30, 2023
Restricted Stock [Abstract]
Shares awarded (in shares)		0
Unvested shares (in shares)		178,750
Weighted average grant date fair value of unvested shares (in dollars per share)		$ 0.97
Shared vested (in shares)		0
Subsequent Event [Member]
Restricted Stock [Abstract]
Shares cancelled (in shares)	178,750

SEGMENT INFORMATION AND GEOGRAPHIC DATA

3 Months Ended

Sep. 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” of this Quarterly Report on Form 10-Q and in the Notes to the Consolidated Financial Statements in the 2023 Annual Report.

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

Summary financial information by reportable segment is as follows:

	Three Months Ended September 30, 2023
	Online Channels		Traditional		Total
Net sales
Finished jewelry	$	3,596,942	$	704,317	$	4,301,259
Loose jewels		319,744		332,020		651,764
Total	$	3,916,686	$	1,036,337	$	4,953,023

Product line cost of goods sold
Finished jewelry	$	1,575,600	$	383,567	$	1,959,167
Loose jewels		99,978		139,396		239,374
Total	$	1,675,578	$	522,963	$	2,198,541

Product line gross profit
Finished jewelry	$	2,021,342	$	320,750	$	2,342,092
Loose jewels		219,766		192,624		412,390
Total	$	2,241,108	$	513,374	$	2,754,482

Depreciation and amortization	$	48,758	$	129,533	$	178,291

Capital expenditures	$	120,145	$	96,907	$	217,052

	Three Months Ended September 30, 2022
	Online Channels		Traditional		Total
Net sales
Finished jewelry	$	4,403,589	$	1,136,817	$	5,540,406
Loose jewels		448,897		1,384,780		1,833,677
Total	$	4,852,486	$	2,521,597	$	7,374,083

Product line cost of goods sold
Finished jewelry	$	1,970,111	$	636,588	$	2,606,699
Loose jewels		162,699		662,924		825,623
Total	$	2,132,810	$	1,299,512	$	3,432,322

Product line gross profit
Finished jewelry	$	2,433,478	$	500,229	$	2,933,707
Loose jewels		286,198		721,856		1,008,054
Total	$	2,719,676	$	1,222,085	$	3,941,761

Depreciation and amortization	$	63,387	$	74,324	$	137,711

Capital expenditures	$	136,988	$	293,412	$	430,400

The Company does not allocate any assets to the reportable segments, and, therefore, no asset information is reported to the chief operating decision maker or disclosed in the financial information for each segment.

A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the condensed consolidated financial statements is as follows:

	Three Months Ended September 30,
	2023		2022
Product line cost of goods sold	$	2,198,541	$	3,432,322
Non-capitalized manufacturing and production control expenses		597,885		377,053
Freight out		204,216		275,737
Inventory write-downs		-		119,000
Other inventory adjustments		7,865		(118,102	)
Cost of goods sold	$	3,008,507	$	4,086,010

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

	Three Months Ended September 30,
	2023			2022
Product line gross profit	$	2,754,482		$	3,941,761
Non-allocated cost of goods sold		(809,966	)		(653,688	)
Sales and marketing		(2,721,965	)		(3,107,946	)
General and administrative		(1,854,268	)		(1,413,476	)
Total other income		92,260			40,201
Loss before income taxes	$	(2,539,457	)	$	(1,193,148	)

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

The following presents net sales data by geographic area:

	Three Months Ended September 30,
	2023		2022
Net sales:
United States	$	4,768,910	$	7,095,373
International		184,113		278,710
Total	$	4,953,023	$	7,374,083

- 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
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

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

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: 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 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-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
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details)

3 Months Ended

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Jun. 30, 2023

Minimum [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Payment terms on trade receivables

30 days

Maximum [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Payment terms on trade receivables

90 days

Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

22.00%

24.00%

Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

12.00%

14.00%

Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

^[1]

14.00%

Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer D [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

26.00%

^[2]

Net Sales [Member] | Customer Concentration Risk [Member] | Customer A [Member]

Major Customers and Concentration of Credit Risk [Abstract]

Concentration risk, percentage

14.00%

17.00%

[1]	Customer C did not have a balance that represented 10% or more of total gross accounts receivable as of September 30, 2023.
[2]	Customer D did not have a balance that represented 10% or more of total gross accounts receivable as of June 30, 2023. A significant portion of sales is derived from certain customer relationships.

NOTE RECEIVABLE

3 Months Ended

Sep. 30, 2023

NOTE RECEIVABLE [Abstract]

NOTE RECEIVABLE

6.	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”).

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.

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)	3 Months Ended
	Sep. 30, 2023 USD ($) Segment	Sep. 30, 2022 USD ($)
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	$ 4,953,023	$ 7,374,083
Product line cost of goods sold	3,008,507	4,086,010
Depreciation and amortization	178,291	137,711
Capital expenditures	217,052	430,400
Product Line [Member]
Summary Information by Reportable Segment [Abstract]
Product line cost of goods sold	2,198,541	3,432,322
Product line gross profit	2,754,482	3,941,761
Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	4,301,259	5,540,406
Product line cost of goods sold	1,959,167	2,606,699
Product line gross profit	2,342,092	2,933,707
Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	651,764	1,833,677
Product line cost of goods sold	239,374	825,623
Product line gross profit	412,390	1,008,054
Operating and Reportable Segments [Member] \| Online Channels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	3,916,686	4,852,486
Product line cost of goods sold	1,675,578	2,132,810
Product line gross profit	2,241,108	2,719,676
Depreciation and amortization	48,758	63,387
Capital expenditures	120,145	136,988
Operating and Reportable Segments [Member] \| Online Channels [Member] \| Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	3,596,942	4,403,589
Product line cost of goods sold	1,575,600	1,970,111
Product line gross profit	2,021,342	2,433,478
Operating and Reportable Segments [Member] \| Online Channels [Member] \| Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	319,744	448,897
Product line cost of goods sold	99,978	162,699
Product line gross profit	219,766	286,198
Operating and Reportable Segments [Member] \| Traditional [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	1,036,337	2,521,597
Product line cost of goods sold	522,963	1,299,512
Product line gross profit	513,374	1,222,085
Depreciation and amortization	129,533	74,324
Capital expenditures	96,907	293,412
Operating and Reportable Segments [Member] \| Traditional [Member] \| Finished Jewelry [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	704,317	1,136,817
Product line cost of goods sold	383,567	636,588
Product line gross profit	320,750	500,229
Operating and Reportable Segments [Member] \| Traditional [Member] \| Loose Jewels [Member]
Summary Information by Reportable Segment [Abstract]
Net sales	332,020	1,384,780
Product line cost of goods sold	139,396	662,924
Product line gross profit	$ 192,624	$ 721,856

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

NET LOSS PER COMMON SHARE

3 Months Ended

Sep. 30, 2023

NET LOSS PER COMMON SHARE [Abstract]

NET LOSS PER COMMON SHARE

12.	NET LOSS PER COMMON SHARE

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods. Diluted net loss per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of stock options and unvested restricted shares that are computed using the treasury stock method. Anti-dilutive stock awards consist of stock options that would have been anti-dilutive in the application of the treasury stock method.

The following table reconciles the differences between the basic and diluted net loss per share presentations:

	Three Months Ended September 30,
	2023			2022
Numerator:
Net loss	$	(2,539,457	)	$	(890,192	)

Denominator:
Weighted average common shares outstanding:
Basic		30,444,954			30,433,195
Effects of dilutive securities		-			-
Diluted		30,444,954			30,433,195

Net loss per common share:
Basic	$	(0.08	)	$	(0.03	)
Diluted	$	(0.08	)	$	(0.03	)

For the three months ended September 30, 2023, stock options to purchase approximately 1.77 million shares were excluded from the computation of diluted net loss per common share because the effect of inclusion of such amounts would be anti-dilutive to net loss per common share. Approximately 179,000 shares of unvested restricted stock are excluded from the computation of diluted net loss per common share as of September 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.

For the three months ended September 30, 2022, stock options to purchase approximately 1.71 million shares were excluded from the computation of diluted net loss per common share. These shares are excluded from the computation of diluted net loss per common share because the exercise price of the stock options for the period presented herein 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 loss per common share.

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Reconciliation of Cost of Goods Sold (Details) - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	$ 3,008,507	$ 4,086,010
Inventory write-downs	0	119,000
Product Line [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	2,198,541	3,432,322
Segment Reconciling Item [Member]
Reconciliation of Cost of Goods Sold [Abstract]
Cost of goods sold	809,966	653,688
Non-capitalized manufacturing and production control expenses	597,885	377,053
Freight out	204,216	275,737
Inventory write-downs	0	119,000
Other inventory adjustments	$ 7,865	$ (118,102)

NET LOSS PER COMMON SHARE (Tables)

3 Months Ended

Sep. 30, 2023

NET LOSS PER COMMON SHARE [Abstract]

Basic and Diluted Net Loss per Share

The following table reconciles the differences between the basic and diluted net loss per share presentations:

	Three Months Ended September 30,
	2023			2022
Numerator:
Net loss	$	(2,539,457	)	$	(890,192	)

Denominator:
Weighted average common shares outstanding:
Basic		30,444,954			30,433,195
Effects of dilutive securities		-			-
Diluted		30,444,954			30,433,195

Net loss per common share:
Basic	$	(0.08	)	$	(0.03	)
Diluted	$	(0.08	)	$	(0.03	)

SEGMENT INFORMATION AND GEOGRAPHIC DATA, Net Sales by Geographic Area (Details) - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Net Sales by Geographic Area [Abstract]
Net sales	$ 4,953,023	$ 7,374,083
Reportable Geographical Component [Member] \| United States [Member]
Net Sales by Geographic Area [Abstract]
Net sales	4,768,910	7,095,373
Reportable Geographical Component [Member] \| International [Member]
Net Sales by Geographic Area [Abstract]
Net sales	$ 184,113	$ 278,710

- 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

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

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Sep. 30, 2023

COMMITMENTS AND CONTINGENCIES [Abstract]

Balance Sheet Classifications of Leases

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

Operating Leases:
Noncurrent operating lease ROU assets	$	2,028,736

Current operating lease liabilities	$	886,117
Noncurrent operating lease liabilities		1,842,468
Total operating lease liabilities	$	2,728,585

Remaining Future Payments Under Operating Leases

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

2024	$	674,267
2025		918,236
2026		943,487
2027		317,327
Total lease payments		2,853,317
Less: imputed interest		124,732
Present value of lease payments		2,728,585
Less: current lease obligations		886,117
Total long-term lease obligations	$	1,842,468

INVENTORIES (Details) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Inventories [Abstract]
Total supplies inventory	$ 313,558	$ 326,834
Total inventory	27,329,725	26,753,576
Short-term portion	8,263,043	7,476,046
Long-term portion	19,066,682	19,277,530
Work-in-process inventories issued to active production jobs	1,800,000	1,990,000
Finished Jewelry [Member]
Inventories [Abstract]
Raw materials	1,493,987	1,288,906
Work-in-process	1,147,154	1,223,670
Finished goods	13,546,994	12,772,611
Finished goods on consignment	2,199,128	2,039,506
Total	18,387,263	17,324,693
Loose Jewels [Member]
Inventories [Abstract]
Raw materials	317,392	421,603
Work-in-process	5,712,141	6,131,853
Finished goods	2,338,373	2,294,270
Finished goods on consignment	260,998	254,323
Total	$ 8,628,904	$ 9,102,049

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Sep. 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 Condensed Consolidated Statements of Cash Flows, consist of the following as of the dates presented:

	September 30, 2023		June 30, 2023
Cash and cash equivalents	$	7,592,698	$	10,446,532
Restricted cash		5,079,322		5,122,379
Total cash, cash equivalents, and restricted cash	$	12,672,020	$	15,568,911

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Dividends (Details)	3 Months Ended
	Sep. 30, 2023 USD ($)
Dividends [Abstract]
Cash dividends	$ 0

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Sep. 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:

	Three Months Ended September 30,
	2023		2022
Employee stock options	$	51,444	$	72,498
Restricted stock awards		-		23,734
Totals	$	51,444	$	96,232

Stock Option Activity

Stock Options – The following is a summary of the stock option activity for the three months ended September 30, 2023:

	Shares			Weighted Average Exercise Price
Outstanding, June 30, 2023		1,817,665		$	1.24
Forfeited		(18,671	)	$	1.79
Expired		(30,829	)	$	1.41
Outstanding, September 30, 2023		1,768,165		$	1.23

Stock Options Outstanding

The following table summarizes information about stock options outstanding at September 30, 2023:

Options Outstanding						Options Exercisable						Options Vested or Expected to Vest
Balance as of 9/30/2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Balance as of 9/30/2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Balance as of 9/30/2023		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
	1,768,165		5.99	$	1.23		1,433,192		5.32	$	1.22		1,750,395		5.96	$	1.23

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Sep. 30, 2023

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

9.	COMMITMENTS AND CONTINGENCIES

Lease Arrangements

On December 9, 2013, the Company entered into a Lease Agreement, as amended on December 23, 2013, April 15, 2014, and January 29, 2021 (the “Lease Agreement”), for its corporate headquarters, which occupies approximately 36,350 square feet of office, storage and light manufacturing space and is classified as an operating lease for financial reporting purposes. The expiration date of the base term of the Lease Agreement in effect as of September 30, 2023 is October 31, 2026 and the terms of the Lease Agreement contain no early termination provisions. Provided there is no outstanding uncured event of default under the Lease Agreement, the Company has an option to extend the lease term for a period of five years. The Company’s option to extend the term of the Lease Agreement must be exercised in writing on or before 270 days prior to expiration of the then-current term. If the option is exercised, the monthly minimum rent for each of the extended terms will be adjusted to the then prevailing fair market rate.

The Company took possession of the leased property on May 23, 2014, once certain improvements to the leased space were completed and did not have access to the property before this date. Upon execution of the third amendment to the Lease Agreement (the “Lease Amendment”) on January 29, 2021, the Lease Amendment included a rent abatement in the amount of approximately $214,000, which is reflected in the rent payments used in the calculation of the right-of-use (“ROU”) asset and lease liability once remeasured upon the execution of the Lease Amendment to extend the lease term. The Lease Amendment also included an allowance for leasehold improvements offered by the landlord in an amount not to exceed approximately $545,000. As of the quarter ended September 30, 2023, the Company has been reimbursed approximately $506,000 by the landlord for qualified leasehold improvements in accordance with the terms of the Lease Amendment. This reimbursement by the landlord reduced the remaining ROU asset by the same amount and is being recognized prospectively over the remaining term of the lease.

The Company has no other material operating leases and is not party to leases that would qualify for classification as a finance lease, variable lease, or short-term lease.

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

Operating Leases:
Noncurrent operating lease ROU assets	$	2,028,736

Current operating lease liabilities	$	886,117
Noncurrent operating lease liabilities		1,842,468
Total operating lease liabilities	$	2,728,585

The Company’s total operating lease cost for the three months ended September 30, 2023 and 2022 was approximately $175,000 for each period.

As of September 30, 2023, the Company’s estimated incremental borrowing rate used and assumed discount rate with respect to operating leases was 2.81% and the remaining operating lease term was 3.08 years.

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

2024	$	674,267
2025		918,236
2026		943,487
2027		317,327
Total lease payments		2,853,317
Less: imputed interest		124,732
Present value of lease payments		2,728,585
Less: current lease obligations		886,117
Total long-term lease obligations	$	1,842,468

The Company makes cash payments for amounts included in the measurement of its lease liabilities. During the three months ended September 30, 2023 and 2022, cash paid for operating leases was approximately $237,000 and $231,000, 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 September 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 three months ended September 30, 2023 the Company made no purchases of SiC crystals. For the three-month period ended September 30, 2022, the Company purchased approximately $1.80 million of SiC crystals from Wolfspeed pursuant to the terms of the Supply Agreement, as amended.

The Company has made no purchases of SiC crystals during the twelve-month period ended September 30, 2023. while engaged in discussions regarding the terms of the Supply Agreement.

On July 28, 2023, Wolfspeed initiated a confidential arbitration against the Company for breach of contract claiming damages, plus interest, costs, and attorneys’ fees. Wolfspeed has alleged that the Company failed to satisfy the purchase obligations provided in the Supply Agreement for Fiscal 2023 in the amount of $4.25 million and failed to pay for $3.30 million of SiC crystals Wolfspeed delivered to the Company. Wolfspeed further alleges that the Company intends to breach its remaining purchase obligations under the Supply Agreement, representing an additional $18.5 million in alleged damages.

While the Company is evaluating Wolfspeed’s claims, the Company disputes the amount sought, and intends to vigorously defend its position, including by asserting rights and defenses that the Company may have under the Supply Agreement at law and in equity. A hearing has been scheduled for September 30, 2024. The final determinations of liability arising from this matter will be made following comprehensive investigations, discovery and arbitration processes.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Sep. 30, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. However, certain information or footnote disclosures normally included in complete financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q include all normal and recurring adjustments necessary for the fair statement of the results for the interim periods presented. The results for the three months ended September 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024.

Principles of Consolidation

Use of Estimates

Restricted Cash

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

	September 30, 2023		June 30, 2023
Cash and cash equivalents	$	7,592,698	$	10,446,532
Restricted cash		5,079,322		5,122,379
Total cash, cash equivalents, and restricted cash	$	12,672,020	$	15,568,911

SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, Stock-Based Compensation (Details) - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Stock-Based Compensation [Abstract]
Employee stock options	$ 51,444	$ 72,498
Restricted stock awards	0	23,734
Totals	51,444	96,232
Stock-based compensation capitalized as cost of inventory	$ 0	$ 0

FAIR VALUE MEASUREMENTS

3 Months Ended

Sep. 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 management of the Company. The financial instruments identified as subject to fair value measurements on a recurring basis are cash and cash equivalents, notes receivable, trade accounts receivable, and trade accounts payable. All financial instruments are reflected in the condensed consolidated balance sheets at carrying value, which approximates fair value due to the nature of these financial instruments.

There were no assets measured at fair value on a non-recurring basis as of September 30, 2023 or June 30, 2023.

INCOME TAXES (Details) - USD ($)	3 Months Ended
INCOME TAXES (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
INCOME TAXES [Abstract]
Combined federal and state statutory tax rate	22.94%	22.98%
Federal income tax rate	21.00%	21.00%
Blended state income tax rate	1.94%	1.98%
Effective tax rate	0.00%
Income tax benefit	$ 0	$ (302,956)

- Definition

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

+ References + Details

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 30, 2023	Nov. 06, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Document Transition Report	false
Entity File Number	000-23329
Entity Registrant Name	Charles & Colvard, Ltd.
Entity Central Index Key	0001015155
Entity Incorporation, State or Country Code	NC
Entity Tax Identification Number	56-1928817
Entity Address, Address Line One	170 Southport Drive
Entity Address, City or Town	Morrisville
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27560
City Area Code	919
Local Phone Number	468-0399
Title of 12(b) Security	Common Stock, no par value per share
Trading Symbol	CTHR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,344,955

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2022	Jun. 30, 2022
Cash, Cash Equivalents and Restricted Cash [Abstract]
Cash and cash equivalents	$ 7,592,698	$ 10,446,532
Restricted cash	5,079,322	5,122,379
Total cash, cash equivalents, and restricted cash	12,672,020	$ 15,568,911	$ 16,623,773	$ 21,179,340
JPMorgan Chase Credit Facility [Member]
Restricted Cash [Abstract]
Borrowing capacity	5,000,000
Cash deposit	$ 5,100,000

COMMITMENTS AND CONTINGENCIES, Lease Arrangements (Details)		3 Months Ended
	Jan. 29, 2021 USD ($)	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)
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
Reimbursement for leasehold improvements		$ 506,000
Balance Sheet Classifications of Leases [Abstract]
Noncurrent operating lease ROU assets		2,028,736		$ 2,183,232
Operating Lease Liabilities [Abstract]
Current operating lease liabilities		886,117		880,126
Noncurrent operating lease liabilities		1,842,468		2,047,742
Total operating lease liabilities		2,728,585
Operating lease cost		$ 175,000	$ 175,000
Assumed discount rate		2.81%
Remaining operating lease term		3 years 29 days
Future Lease Payments Under Operating Leases [Abstract]
2024		$ 674,267
2025		918,236
2026		943,487
2027		317,327
Total lease payments		2,853,317
Less: imputed interest		124,732
Total operating lease liabilities		2,728,585
Less: current lease obligations		886,117		880,126
Total long-term lease obligations		1,842,468		$ 2,047,742
Cash paid for operating leases		$ 237,000	$ 231,000

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

3 Months Ended

Sep. 30, 2023

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK [Abstract]

MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

13.	MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash on deposit and cash equivalents held with banks and trade accounts receivable. The Company places cash deposits with federally insured financial institutions and maintains its cash at banks and financial institutions it considers to be of high credit quality. However, the Company’s cash deposits may at times exceed the Federal Deposit Insurance Corporation’s insurable limits. Accordingly, balances in excess of federally insured limitations may not be insured. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to significant risks on such accounts.

Trade receivables potentially subject the Company to credit risk. Payment terms on trade receivables for the Company’s Traditional segment customers are generally between 30 and 90 days, though it may offer extended terms with specific customers and on significant orders from time to time. The Company extends credit to its customers based upon a number of factors, including an evaluation of the customer’s financial condition and credit history that is verified through trade association reference services, the customer’s payment history with the Company, the customer’s reputation in the trade, and/or an evaluation of the Company’s opportunity to introduce its moissanite jewels or finished jewelry featuring moissanite and lab grown diamonds to new or expanded markets. Collateral is not generally required from customers. The need for an allowance for uncollectible accounts is determined based upon factors surrounding the credit risk of specific customers, historical trends, and other information.

At times, a portion of the Company’s accounts receivable will be due from customers that have individual balances of 10% or more of the Company’s total gross accounts receivable.

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

	September 30, 2023			June 30, 2023
Customer A		22	%		24	%
Customer B		12	%		14	%
Customer C		*	%		14	%
Customer D		26	%		**	%

*	Customer C did not have a balance that represented 10% or more of total gross accounts receivable as of September 30, 2023.

**	Customer D did not have a balance that represented 10% or more of total gross accounts receivable as of June 30, 2023. A significant portion of sales is derived from certain customer relationships.

The following is a summary of customers that represent 10% or more of total net sales for the periods presented:

	Three Months Ended September 30,
	2023			2022
Customer A		14	%		17	%

INVENTORIES (Tables)

3 Months Ended

Sep. 30, 2023

INVENTORIES [Abstract]

Inventories

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

	September 30, 2023		June 30, 2023
Finished jewelry:
Raw materials	$	1,493,987	$	1,288,906
Work-in-process		1,147,154		1,223,670
Finished goods		13,546,994		12,772,611
Finished goods on consignment		2,199,128		2,039,506
Total finished jewelry	$	18,387,263	$	17,324,693
Loose jewels:
Raw materials	$	317,392	$	421,603
Work-in-process		5,712,141		6,131,853
Finished goods		2,338,373		2,294,270
Finished goods on consignment		260,998		254,323
Total loose jewels		8,628,904		9,102,049
Total supplies inventory		313,558		326,834
Total inventory	$	27,329,725	$	26,753,576

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

	September 30, 2023		June 30, 2023
Short-term portion	$	8,263,043	$	7,476,046
Long-term portion		19,066,682		19,277,530
Total	$	27,329,725	$	26,753,576

DEBT (Details) - USD ($)				3 Months Ended
DEBT (Details) - USD ($)	Jun. 21, 2023	Jul. 28, 2022	Jul. 12, 2021	Sep. 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%

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 4,953,023	$ 7,374,083
Costs and expenses:
Cost of goods sold	3,008,507	4,086,010
Sales and marketing	2,721,965	3,107,946
General and administrative	1,854,268	1,413,476
Total costs and expenses	7,584,740	8,607,432
Loss from operations	(2,631,717)	(1,233,349)
Other income:
Interest income	92,260	40,201
Total other income	92,260	40,201
Loss before income taxes	(2,539,457)	(1,193,148)
Income tax benefit	0	(302,956)
Net loss	$ (2,539,457)	$ (890,192)
Net loss per common share:
Basic (in dollars per share)	$ (0.08)	$ (0.03)
Diluted (in dollars per share)	$ (0.08)	$ (0.03)
Weighted average number of shares used in computing net loss per common share:
Basic (in shares)	30,444,954	30,433,195
Diluted (in shares)	30,444,954	30,433,195