FORM 3



(Print or Type Responses)		   UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF
BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(f) of the Investment Company Act of 1940		  






1.   Name and Address of Reporting Person*   2.   Date of Event Requiring Statement
(Month/Day/Year)		   4.   Issuer Name and Ticker or Trading Symbol
Paulson                        Capital                         Corp.
   5/14/2001
   Charles & Colvard, Ltd.        CTHR
    (Last)   (First)   (Middle)   3.   IRS Identification Number of Reporting Person, if an entity (voluntary)   5.   Relationship of Reporting Person(s) to Issuer (Check all applicable)   6.   If Amendment, Date of Original
(Month/Day/Year)
                          X(1)   Director     X   10% Owner        
811 SW Naito Parkway, Suite 200
(Street)		   N/A
                  Officer
              (give title below)		                  Other
              (specify below)		   2/16/2001
                                    7.   Individual or Joint/Group Filing
Portland                        OR                         97204
          
      (Check Applicable Line)
    (City)   (State)   (Zip)                                          Form filed by One Reporting Person
    X     Form filed by More than One Reporting Person(2)

Table I — Non-Derivative Securities Beneficially Owned

1.   Title of Security
(Instr. 4)		   2.   Amount of Securities
Beneficially Owned
(Instr. 4)		   3.   Ownership Form:
Direct (D) or Indirect (I)
(Instr. 5)		   4.   Nature of Indirect
Beneficial Ownership
(Instr. 5)
    Common Stock       184,400 (3)       I       (4)
    Common Stock       1,581,400 (3)       I       (5)
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.   (Over)
* If the form is filed by more than one reporting person, see Instruction 5(b)(v).   SEC 1473 (1/3/02)

POTENTIAL PERSONS WHO ARE TO 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.

FORM 3 (Continued)   Table II — Derivative Securities Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1.   Title of Derivative Security
(Instr. 4)		   2.   Date Exercisable and Expiration Date
(Month/Day/Year)		   3.   Title and Amount of Securities Underlying Derivative Security
(Instr. 4)		   4.   Conversion or Exercise Price of Derivative Security   5.   Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 5)		   6.   Nature of Indirect Beneficial Ownership
(Instr. 5)
                                 
       
                       
            Date
Exercisable		   Expiration
Date		       Title   Amount or Number of Shares                        
    Options (right
to buy)		       5/14/2001   5/13/2006       Common
Stock		   5,000 (3)       $1.33       I       owned by
Mr. Paulson
    Options (right
to buy)		       5/14/2002   5/13/2006       Common
Stock		   2,500 (3)       $1.33       I       owned by
Mr. Paulson
    Warrant (right
to buy)		       11/14/1998   11/14/2002       Common
Stock		   214,592 (3)       $18.00       I       (5)
    Warrant (right
to buy)		       11/14/1998   11/14/2002       Common
Stock		   25,200 (3)       $18.00       I       owned by
Mr. Paulson
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     

Explanation of Responses:

        (1)    Mr. Paulson became a director on 5/14/2001.

        (2)    In addition to Paulson Capital Corp. ("PLCC"), the reporting parties are: Chester L.F. Paulson, Jacqueline M. Paulson, Paulson Family LLC ("LLC"), and Paulson Investment Company, Inc. ("PIC"). The address for each of these parties is the same as that given for Mr. Paulson.

        (3)    As of 3/31/02.

        (4)    Mr. and Mrs. Paulson may be deemed to be the beneficial owners of the securities pursuant to the rules and regulations of the Securities and Exchange Commission. Mr. and Mrs. Paulson are both controlling managers of LLC. The securities are held in the name of LLC.

        (5)    Mr. and Mrs. Paulson are both controlling managers of LLC, which is a controlling shareholder of PLCC, which is the parent company of PIC. The securities are held in the name of PIC. Mr. and Mrs. Paulson and LLC expressly disclaim beneficial ownership of the securities of which PIC is the record owner.

    /s/ Chester L.F. Paulson, Individually   April 30, 2002
**Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).  
**Signature of Reporting Person		  
Date
    /s/ Jacqueline M. Paulson, Individually
    
    /s/ Paulson Family LLC
By: Chester L.F. Paulson, Manager		    
    /s/ Paulson Capital Corp.
By: Chester L.F. Paulson, Chairman of the Board		    
    /s/ Paulson Investment Company
By: Chester L.F. Paulson, Chairman of the Board		    
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.        
         
To view the actual filing form and general Instructions go to: http://www.sec.gov/divisions/corpfin/forms/form3.htm
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SEC 1473 (1/3/02)