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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
Charles & Colvard, Ltd.
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(Name of Issuer)
Issuer Common Stock
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(Title of Class of Securities)
159765106
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(CUSIP Number)
February 16, 2001
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(Date of Event which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this Schedule
is filed:
|_| Rule 13d-1(b)
|X| Rule 13d-1(c)
|_| Rule 13d-1(d)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Potential persons who respond to the collection of information contained in this
form are not required to respond unless the form displays a currently valid OMB
control number.
Page 1 of 6
13G
CUSIP No. 159765106 Page 2 of 6 pages
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1 NAME OF REPORTING PERSON
Paulson Capital Corp.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
93-05898534
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) | |
(b) | |
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3 SEC USE ONLY
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4 CITIZENSHIP OR PLACE OF ORGANIZATION
Paulson Capital Corp. is an Oregon corporation.
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5 SOLE VOTING POWER
2,070,992
NUMBER OF ---------------------------------------------------------
SHARES 6 SHARED VOTING POWER
BENEFICIALLY OWNED BY
EACH REPORTING PERSON --
WITH ---------------------------------------------------------
7 SOLE DISPOSITIVE POWER
2,070,992
---------------------------------------------------------
8 SHARED DISPOSITIVE POWER
--
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9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,070,992
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10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
[ ]
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11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
15.4%
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12 TYPE OF REPORTING PERSON*
CO
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Page 2 of 6 pages
Item 1. Issuer
(a) The name of the Issuer is Charles & Colvard, Ltd.
(b) The Issuer's Principal Executive Offices are located at 3800 Gateway
Boulevard, Suite 311, Morrisville, NC 27560
Item 2. Reporting Person and Security
(a) This Statement is filed by Paulson Capital Corp. ("PCC"), an Oregon
corporation.
(b) PCC's Principal Business Office is located at 811 SW Naito Parkway,
Suite 200, Portland, OR 97204.
(c) PCC is organized in the United States of America.
(d) This Statement relates to shares of Common Stock of Charles & Colvard,
Ltd.
(e) The CUSIP Number assigned to the Common Stock of the Issuer is
159765106.
Item 3. If this statement is filed pursuant to Rule 13d-l(b), or 13d-2(b), check
whether the person filing is a: (Not applicable.)
(a) |_| Broker or Dealer registered under Section 15 of the Act
(b) |_| Bank as defined in section 3(a)(6) of the Act
(c) |_| Insurance Company as defined in section 3(a)(19) of the Act
(d) |_| Investment Company registered under section 8 of the Investment
Company Act of 1940
(e) |_| Investment Adviser registered under section 203 of the Investment
Advisers Act of 1940
(f) |_| Employee Benefit Plan, Pension Fund which is subject to the
provisions of the Employee Retirement Income Security Act of 1974 or
Endowment Fund; see ss.240.13d-l(b)(1)(ii)(F)
(g) |_| Parent Holding Company, in accordance with ss.240.13d-l(b)(ii)(G)
(Note: See Item 7)
(h) |_| Savings Association as defined in Section 3(b) of the Federal
Deposit Insurance Act
(i) |_| Church Plan that is excluded from definition of an investment
company under Section 3(c)(14) of the Investment Company Act of 1940
(j) |_| Group, in accordance with ss.240.13d-l(b)(1)(ii)(J)
Page 3 of 6 pages
Item 4. Ownership
(a) Under the rules and regulations of the Securities and Exchange
Commission, PCC may be deemed to be the beneficial owner of a total of 2,070,992
shares of Issuer Common Stock.
(b) Of the 13,447,714 shares of the Issuer's Common Stock outstanding as of
February 21, 2001, PCC's beneficial ownership represented approximately 15.4%.
(c) Paulson Investment Company, Inc. ("PIC") is the wholly owned subsidiary
of PCC. PIC is the record holder of the common stock and warrants over which PCC
has the power to vote or direct the vote and to dispose or to direct the
disposition of the total amount of shares that it beneficially owns. The shares
beneficially owned by PCC include 2,070,992 shares of common stock owned by PIC
comprised of the following (for purposes of the discussion of beneficial
ownership, "Warrant" shall refer to a warrant entitling the holder to purchase
one share of the issuer's common stock): a warrant to purchase 214,592 shares of
Common Stock; and; 1,856,400 Shares of Common Stock held in PIC's trading
account.
Item 5. Ownership of Five Percent or Less of a Class
Not applicable.
Item 6. Ownership of More than Five Percent on Behalf of Another Person.
Not applicable.
Item 7. Identification and Classification of the Subsidiary Which Acquired the
Security Being Reported on By the Parent Holding Company
PCC has filed this schedule pursuant to Rule 13d-1(c). See attached Exhibit A
identifying the relevant subsidiary.
Item 8. Identification and Classification of Members of the Group
Not applicable.
Item 9. Notice of Dissolution of Group
Not applicable.
Item 10. Certification
By signing below I certify that, to the best of my knowledge and belief, the
securities referred to above were acquired in the ordinary course of business
and were not acquired for the purpose of and do not have the effect of changing
or influencing the control of the issuer of such securities and were not
acquired in connection with or as a participant in any transaction having such
purposes or effect.
Page 4 of 6 pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated March 6, 2000
PAULSON CAPITAL CORP.
CHESTER L.F. PAULSON
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Signature
Chester L.F. Paulson
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Chairman [Name/Title]
Page 5 of 6 pages
EXHIBIT A
Exhibit to Item 7
Paulson Investment Company, Inc. is the subsidiary of Paulson Capital
Corp. which acquired the security being reported on by the parent holding
company. Paulson Investment Company, Inc. is located at 811 SW Naito Parkway,
Ste. 200, Portland, OR 97204.
Page 6 of 6 pages