Item 1.
	(a)	Name of Issuer   Charles & Colvard, LTD.
	(b)	Address of Issuer's Principal Executive Offices   300 Perimeter Park Drive, Suite A Morrisville, NC 27560
Item 2.
	(a)	Name of Person Filing   This statement is being filed jointly by each of the following persons pursuant to Rule 13d-1(k) promulgated by the Securities and Exchange Commission under Section 13 of the Securities Exchange Act of 1934, as amended: (i) Chester L.F. Paulson and Jacqueline M. Paulson, as joint tenants and each individually (together, the "Paulsons") who control and are the managing partners of the Paulson Family, LLC. ("LLC"); and (ii) Paulson Capital Corporation, an Oregon corporation ("PLCC"), which directly wholly owns Paulson Investment Company, Inc., an Oregon corporation ("PICI"). The Paulsons and PLCC are collectively referred to as the "Reporting Persons". The Reporting Persons schedule 13G Joint Filing Agreement is attached as Exhibit 1.   Information with respect to the Reporting Persons is given solely by such Reporting Persons, and no Reporting Person assumes responsibility for the accuracy or completeness of the information by another Reporting Person, except as otherwise provided in Rule 13d-1(k). By their signature on this statement, each of the Reporting Persons agree that this statement is filed on behalf of such Reporting Persons.
	(b)	Address of Principal Business Office or, if none, Residence   The Paulsons, PLCC's, and PICI's principal business address is:   811 S.W. Naito Parkway, Suite 200 Portland, Oregon 97204
	(c)	Citizenship   The Paulsons are citizens of the United States of America, and PLCC and PICI are organized under the laws of the United States of America.
	(d)	Title of Class of Securities   Common Stock for Charles & Colvard, LTD.
	(e)	CUSIP Number   159765106
Item 3.		If this statement is filed pursuant to §§240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is a:
	(a)	T	Broker or dealer registered under section 15 of the Act (15 U.S.C. 78o).
	(b)	£	Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c).
	(c)	£	Insurance company as defined in section 3(a)(19) of the Act (15 U.S.C. 78c).
	(d)	£	Investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C 80a-8).
	(e)	£	An investment adviser in accordance with §240.13d-1(b)(1)(ii)(E);
	(f)	£	An employee benefit plan or endowment fund in accordance with §240.13d-1(b)(1)(ii)(F);
	(g)	£	A parent holding company or control person in accordance with § 240.13d-1(b)(1)(ii)(G);
	(h)	£	A savings associations as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);
	(i)	£	A church plan that is excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3);
	(j)	£	Group, in accordance with §240.13d-1(b)(1)(ii)(J).

 

Item 4.		Ownership.
	(a)	Amount beneficially owned:   The Paulsons may be deemed to be the beneficial owners of a total of 1,247,500 shares of Issuer Common Stock. The precise owners of these shares is described more specifically in this paragraph. The Paulsons may be deemed to control Paulson Capital Corp. ("PLCC"), which wholly owns Paulson Investment Company, Inc. ("PICI"). The Paulsons control and are the managing partners of the Paulson Family, LLC. ("LLC"). Through the LLC, the Paulsons indirectly own 252,500 shares of Issuer Common Stock. The Paulsons collectively directly own 32,500 shares of Issuer Common Stock. Chester Paulson directly owns 0 shares of Issuer Common Stock. Jacqueline Paulson directly owns 0 shares of Issuer Common Stock. The Paulsons may be deemed to indirectly own 995,000 shares of Issuer Common Stock through PICI. Pursuant to SEC Rule 13d-4, the Paulsons expressly disclaim beneficial ownership of the 995,000 shares of Issuer Common Stock of which PICI is the record owner.
	(b)	Percent of class:   As of October 31, 2007, the Issuer had 18,106,526 shares of Issuer Common Stock issued and outstanding, as reported in the Issuer's Form 10-Q filed with the SEC on November 8, 2007 (the "Issuer Outstanding Shares"). The Paulsons actual and deemed beneficial ownership of Issuer Common Stock represented approximately 7.0693% of the Issuer Outstanding Shares. PLCC's indirect beneficial ownership of Issuer Common Stock represented approximately 5.4953% of the Issuer Outstanding Shares.
	(c)	Number of shares as to which the person has:
		(i)	Sole power to vote or to direct the vote   The Paulsons have sole power to vote or direct the vote of 32,500 shares. PLCC has sole power to vote or direct the vote of 0 shares.
		(ii)	Shared power to vote or to direct the vote   The Paulson have shared power to vote or direct the vote of 1,247,500 shares. PLCC has the shared power to vote or direct the vote of 995,000 shares.
		(iii)	Sole power to dispose or to direct the disposition of   The Paulsons have sole power to dispose or direct the disposition of 32,500 shares. PLCC has sole power to dispose or direct the disposition of 0 shares.
		(iv)	Shared power to dispose or to direct the disposition of   The Paulsons have shared power to dispose or direct the disposition of 1,247,500 shares. PLCC has shared power to dispose or direct the disposition of 995,000 shares.

Item 5.	Ownership of Five Percent or Less of a Class
	If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following £.
Instruction: Dissolution of a group requires a response to this item.                                    N/A
Item 6.	Ownership of More than Five Percent on Behalf of Another Person
	N/A
Item 7.	Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on By the Parent Holding Company or Control Person
	See Item 4(a)
Item 8.	Identification and Classification of Members of the Group
	N/A
Item 9.	Notice of Dissolution of Group
Item 10.	Certifications