10-Q

A UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13l OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended July 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from _______ to ________.

Commission File Number: 000-51791

INNOVATIVE DESIGNS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	03-0465528
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

124 Cherry Street

Pittsburgh, Pennsylvania 15223

(Address of Principal Executive Offices, Zip Code)

(412) 799-0350

(Issuer’s Phone Number Including Area Code)

N/A

(Former Name or Former Address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting Company” in Rule 12b-2 of the Exchange Act.

(Check One)

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-accelerated Filer ☐	Smaller reporting company ☒

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of September 23, 2021, there were 32,741,560 shares of the Registrant’s common stock, par value $.0001 per share, outstanding.

Transitional Small Business Disclosure Format: YES ☐ NO ☒

Innovative Designs, Inc.

Index

Form 10-Q for the Quarter Ended July 31, 2021

	Part I -- Financial Information	Page No.
Item 1.	Condensed Financial Statements (Unaudited)
	Condensed Balance Sheets as of July 31, 2021 (Unaudited) And October 31, 2020	1
	Condensed Statements of Operations for the Nine Month Periods Ended July 31, 2021 and 2020 (Unaudited)	3
	Condensed Statements of Changes in Stockholders’ Equity as of July 31, 2021 (Unaudited) and October 31, 2020	4
	Condensed Statements of Cash Flows for the Nine Month Periods Ended July 31, 2021 and 2020 (Unaudited)	5
	Notes to the Condensed Financial Statements	6 - 11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12 - 13
	Part II -- Other Information
Items 1, 2, 3, 4, 4T and 5.		15 - 16
Item 6.	Exhibits	17

INNOVATIVE DESIGNS, INC.

CONDENSED BALANCE SHEETS

JULY 31, 2021 (UNAUDITED) AND OCTOBER 31, 2020

	July 31, 2021		October 31, 2020
ASSETS
CURRENT ASSETS
Cash	$	326,932	$	48,009
Accounts receivable - net of allowance for doubtful accounts of $5,860		3,056		19,900
Inventory - net of obsolete inventory reserve of $75,468		550,964		576,785
Current portion of right of use asset		40,404		38,775
Total current assets		921,356		683,469
PROPERTY AND EQUIPMENT - NET		40,206		65,187
OTHER ASSETS
Inventory on consignment		1,625		1,625
Deposits on inventory		57,330		57,330
Advance to employees		8,200		8,200
Right of use asset, net of current portion		10,452		40,962
Deposits on equipment		600,000		600,000
Total other assets		677,607		708,117
TOTAL ASSETS	$	1,639,169	$	1,456,773

The accompanying notes are an integral part of these condensed financial statements.

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INNOVATIVE DESIGNS, INC.

CONDENSED BALANCE SHEETS

JULY 31, 2021 (UNAUDITED) AND OCTOBER 31, 2020

	July 31, 2021			October 31, 2020
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	202,257		$	270,792
Current portion of notes payable		18,628			18,628
Unearned revenue		2,000			—
Current portion of lease liability		40,404			38,775
Accrued interest expense		4,327			15,747
Due to shareholders		352,200			102,200
Accrued expenses		14,553			14,553
Total current liabilities		634,369			460,695
LONG-TERM LIABILITIES
Long-term portion of notes payable		71,722			107,193
Lease liability, net of current portion		10,452			40,962
Total long-term liabilities		82,174			148,155
TOTAL LIABILITIES		716,543			608,850
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value, 25,000,000 shares authorized					—
Common stock, $0.0001 par value, 100,800,000 shares authorized, and 32,341,560 and 31,211,560 issued and outstanding		3,236			3,123
Common stock to be issued
Additional paid-in capital		10,795,715			10,574,828
Accumulated deficit		(9,876,325	)		(9,730,028	)
Total stockholders’ equity		922,626			847,923
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,639,169		$	1,456,773

The accompanying notes are an integral part of these condensed financial statements.

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INNOVATIVE DESIGNS, INC.

CONDENSED STATEMENTS OF OPERATIONS

THREE AND NINE MONTHS ENDED JULY 31, 2021 AND 2020 (UNAUDITED)

	Three Months Ended July 31,						Nine Months Ended July 31,
	2021			2020			2021			2020
REVENUES - NET	$	110,475		$	90,814		$	176,388		$	174,048
OPERATING EXPENSES:
Cost of sales		50,712			42,965			78,352			78,664
Selling, general and administrative expenses		66,845			99,681			275,998			271,838
Total Operating Expenses		117,557			142,646			354,350			350,502
LOSS FROM OPERATIONS		(7,082	)		(51,832	)		(177,962	)		(176,454	)
OTHER INCOME (EXPENSE)
Miscellaneous income (expense)		33,652			—			62,475			833
Interest expense		(13,417	)		(2,173	)		(30,810	)		(9,668	)
Total other income (expense)		20,235			(2,173	)		31,665			(8,835	)
NET INCOME (LOSS)	$	13,153		$	(54,005	)	$	(146,297	)	$	(185,289	)
PER SHARE INFORMATION-UNDILUTED
Net Income (Loss) Per Common Share	$	0.000		$	(0.002	)	$	(0.005	)	$	(0.006	)
Weighted Average Number of Common Shares Outstanding		32,216,560			31,054,060			31,776,560			30,686,451
PER SHARE INFORMATION-FULLY DILUTED
Net Income (Loss) Per Common Share	$	0.000		$	(0.002	)	$	(0.005	)	$	(0.006	)
Weighted Average Number of Common Shares Outstanding		32,229,060			31,054,060			31,789,060			30,686,451

The accompanying notes are an integral part of these condensed financial statements.

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INNOVATIVE DESIGNS, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THREE AND NINE MONTHS ENDED JULY 31, 2021 AND 2020 (UNAUDITED)

	Common Stock				Common Stock			Additional Paid-in		Accumulated
	Shares		Amount		To be Issued			Capital		Deficit			Total
Balance at October 31, 2020		31,211,560	$	3,123		—		$	10,574,828	$	(9,730,028	)	$	847,923
Sale of stock		100,000		10		—			24,990		—			25,000
Net loss		—		—		—			—		(35,965	)		(35,965	)
Balance at January 31, 2021		31,311,560		3,133		—			10,599,818		(9,765,993	)		836,958
Sale of stock		780,000		78					133,922					134,000
Net loss		—		—		—			—		(123,485	)		(123,485	)
Balance at April 30, 2021		32,091,560		3,211		—			10,733,740		(9,889,478	)		847,473
Sale of stock		250,000		25					61,975					62,000
Net income		—		—		—			—		13,153			13,153
Balance at July 31, 2021		32,341,560	$	3,236	$	—		$	10,795,715	$	(9,876,325	)	$	922,626
Balance at October 31, 2019		30,116,560	$	3,013	$	—		$	10,404,438	$	(9,568,706	)	$	838,745
Sale of stock		300,000		30		—			48,970		—			49,000
Net loss		—		—		—			—		(68,890	)		(68,890	)
Balance at January 31, 2020		30,416,560		3,043		—			10,453,408		(9,637,596	)		818,855
Sale of stock		450,000		45		10,000			72,455		—			82,500
Net loss		—		—		—			—		(62,394	)		(62,394	)
Balance at April 30, 2020		30,866,560		3,088		10,000			10,525,863		(9,699,990	)		838,961
Sale of stock		250,000		25		(10,000	)		36,975		—			27,000
Net loss		—		—		—			—		(54,005	)		(54,005	)
Balance at July 31, 2020		31,116,560		3,113		—			10,562,838		(9,753,995	)		811,956

The accompanying notes are an integral part of these condensed financial statements.

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INNOVATIVE DESIGNS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

THREE AND NINE MONTHS ENDED JULY 31, 2021 AND 2020 (UNAUDITED)

	Nine Months Ended July 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(146,297	)	$	(185,289	)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts		—			(4,549	)
Common stock issued for services		66,000			—
Depreciation		24,981			24,981
Amortization of right of use asset		28,881			26,841
(Increase) decrease from changes in:
Accounts receivable		16,844			5,780
Inventory		25,821			15,493
Increase (decrease) from changes in:
Accounts payable		(68,534	)		(30,094	)
Unearned revenue		2,000			—
Accrued interest expense		(11,420	)		(3,490	)
Accrued expenses		—			3,637
Net cash used in operating activities		(61,724	)		(146,690	)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities		—			—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock		155,000			158,500
Proceeds (forgivness) from loans		(33,652	)		33,652
Proceeds from shareholder advances		250,000			57,984
Payments on lease liability		(28,881	)		(30,843	)
Payments on notes payable		(1,820	)		(7,456	)
Net cash provided by financing activities		340,647			211,837
Net increase in cash		278,923			65,147
CASH, BEGINNING OF YEAR		48,009			34,525
CASH, END OF THE PERIOD	$	326,932		$	99,672
Supplemental disclosure of cash flow information:
Cash paid for interest	$	39,100		$	9,668
Cash paid for taxes	$	—		$	—

The accompanying notes are an integral part of these condensed financial statements.

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and Nine Month Periods Ended July 31, 2021 and 2020 (Unaudited)

NOTE 1. BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly Innovative Designs, Inc.’s financial position as of July 31, 2021, the changes therein for the three and nine month periods then ended and the results of operations for the three and nine month periods ended July 31, 2021 and 2020.

The financial statements included in the Form 10-Q are presented in accordance with the requirements of the Form and do not include all of the disclosures required by accounting principles generally accepted in the United States of America. For additional information, reference is made to the Innovative Designs, Inc.’s annual report on Form 10-K for the fiscal year ended October 31, 2020. The results of operations for the three and nine month periods ended July 31, 2021 and 2020 are not necessarily indicative of operating results for the full year.

NOTE 2. RIGHT OF USE ASSETS AND LEASE LIABILITIES

During the quarter ended April 30, 2019, the Company implemented Accounting Standards Update 2016-02, Leases. Under the new guidance, a lessee must be recorded a liability for lease payments (referred to as the lease liability) and an asset for the right to use the leased asset during the lease term (referred to at the right of use asset) for all leases, regardless of whether they are designated as finance or operating leases. This election requires the lessee to recognize lease expense on a straight-line basis over the lease term. The right of use assets and corresponding right of use liabilities have been recorded using the present value of the leases. See Notes 11 and 12 within the financial statement for additional disclosure on leases

NOTE 3. GOING CONCERN

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company had a net loss of ($146,297) and a negative cash flow from operations of ($61,724) for the nine month period ended July 31, 2021. In addition, the Company has an accumulated deficit of ($9,876,325). Management’s plans include cash receipts through sales, sales of Company stock, and borrowings from private parties. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4. ACCOUNTS RECEIVABLE

Management evaluates its receivables on a quarterly basis to assess the validity of remaining receivables. Management has determined that there is significant doubt regarding the receivable balance over 90 days of $5,860 as of the July 31, 2021 and October 31, 2020. Management has applied an allowance on all balances in excess of 90 days.

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS 

Three and Nine Month Periods Ended July 31, 2021 and 2020 (Unaudited)

NOTE 5. INVENTORY

Inventory consists principally of purchased apparel inventory and House Wrap which is manufactured by the Company. Inventory is stated at the lower of cost or net realizable value on a first-in, first-out basis. The Company has decided to discontinue the selling of its hunting and swimming line of apparel. The Company has booked a reserve against apparel inventory at July 31, 2021 and October 31, 2020 of $75,468. Management has determined that no allowance is currently necessary on their House Wrap Inventory. Management will continue to evaluate its obsolete inventory reserve throughout the year and make adjustments as needed.

NOTE 6. EARNINGS PER SHARE

The Company calculates net income (loss) per share in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 260 “Earnings per Share”. Basic earnings (loss) per share is calculated by dividing income (loss) by the weighted average number of common shares outstanding for the period. As described in Note 15, the Company has issued a convertible promissory note on May 6, 2021, therefore, fully diluted shares are presented in the Condensed Statements of income.

NOTE 7. INCOME TAXES

The Company accounts for income taxes in accordance with ASC Topic 740 “Income Taxes”, which requires an asset and liability approach for financial reporting purposes.

Deferred income taxes are provided for differences between the tax bases of assets and liabilities and the financial reporting amounts at the end of the period, and for net operating loss and tax credit carryforwards available to offset future taxable income. Changes in enacted tax rates or laws result in adjustments to recorded deferred tax assets and liabilities in the periods in which the tax laws are enacted or tax rates are changed. The Company will continue to evaluate its income tax obligation throughout the year and will record a tax provision when it is necessary.

NOTE 8. SHIPPING AND HANDLING COSTS

The Company pays shipping and handling costs on behalf of customers for purchased apparel merchandise. These costs are billed back to the customer through the billing invoice. The shipping and handling costs associated with merchandise ordered by the Company are included as part of inventory as these costs are allocated across the merchandise received. With House Wrap orders, the customer pays the shipping cost. The shipping and handling costs associated with customer orders was approximately $6,400 and $4,400 for the nine month periods ended July 31, 2021 and 2020, respectively.

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS 

Three and Nine Month Periods Ended July 31, 2021 and 2020 (Unaudited)

NOTE 9. COMMON STOCK

During the nine month period ended July 31, 2021, the Company issued 1,130,000 shares of common stock to investors for total proceeds of $221,000. The stock was issued between $0.12 and $0.25 per share.

During the nine month period ended July 31, 2020, the Company issued 1,000,000 shares of common stock to investors for total proceeds of $158,500. The stock was issued between $0.10 and $0.20 per share.

NOTE 10. DEPOSITS ON EQUIPMENT

On July 12, 2015 the Company reached an agreement with Ketut Jaya to purchase the machinery and equipment utilized to produce the INSULTEX material. The purchase price is $700,000 which was to be paid in four installments. The first installment of $300,000 was to be paid at the execution of the agreement. The second installment of $200,000 was to be paid when the machinery and equipment is ready to be shipped to the United States. The third installment of $100,000 is to be paid once the machinery and equipment is producing INSULTEX, and the fourth and final installment of $100,000 is to be made after the first commercial production run of INSULTEX is completed. As of April 30, 2020, the Company has made payments of $500,000 in accordance with the agreement and made a $100,000 pre-payment as the machine is not yet producing INSULTEX. Additionally, the Company has incurred $17,000 of additional expenses related to shipping, site improvements and installation of the equipment. Due to various environmental regulations regarding propane emitted from the machine into the air and other costs to assemble the machine the Company expects to incur costs in excess of the current deposit agreement. Management of the Company currently cannot reasonably estimate the costs. During the six month period ended April 30, 2019 Management decided to sell the machine. The shipping and other purchase costs associated with the purchase of the machine that were originally capitalized as part of the machine cost that were written off. The total loss on impairment for the six month period ended April 30, 2019 was $17,000. In July 2021, management has decided that it is no longer selling this equipment and is moving forward with plans of putting it in service in the future.

NOTE 11. RIGHT OF USE ASSETS

The Company entered into a month to month verbal lease at the time the Company was formed that is classified as right of use asset and lease liability. The lease for the Company’s office space is estimated to be through June 2022. In accordance with ASU 2016-02, the Company calculated the present value of the leases using the average commercial real estate interest rate of 5.50% at the commencement of the office lease. Applying the commercial rate, the Company calculated the present value of $150,496 for the office lease as of April 30, 2019.

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS 

Three and Nine Month Periods Ended July 31, 2021 and 2020 (Unaudited)

NOTE 11. RIGHT OF USE ASSETS (CONTINUED)

As of July 31, 2021, the right of use assets associated with future operating lease is as follows:

Total present value of right of use asset under lease agreement	$	150,496
Amortization of right of use asset		(99,640	)
Total right of use asset as of July 31, 2021	$	50,856
Less current portion due within one year		40,404
Long-term right of use asset	$	10,452

Total amortization expense related to the right of use assets under the verbal lease agreement was $28,881 and $26,841 for the nine month periods ended July 31, 2021 and 2020, respectively.

Future amortization of the right of use asset as of July 31, 2021 is as follows:

2021	$	40,404
2022		10,452
Right of use assets	$	50,856

NOTE 12. RIGHT OF USE LEASE LIABILITY

As disclosed in Note 11, the Company entered into a verbal lease for office space prior to the quarter ended July 31, 2021 that is classified as a right of use asset and lease liability.

As of July 31, 2021, the lease liability associated with future payments due under the verbal lease is as follows:

Total future minimum lease payments	$	115,500
Less present value discount		64,644
Total right of use lease liability as of April 30, 2021		50,856
Less current portion due within one year		40,404
Long-term right of use liability	$	10,452

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS 

Three and Nine Month Periods Ended July 31, 2021 and 2020 (Unaudited)

Total maturities of lease liability as of July 31, 2021 are as follows:

	Total future minimum lease payments		Present value discount		Right of use lease liability
2021	$	42,000	$	1,596	$	40,404
2022		10,500		48		10,452
	$	52,500	$	1,644	$	50,856

NOTE 13. SEGMENT INFORMATION

We have organized our operations into two segments. We rely on an internal management reporting process that provides segment information for purposes of making financial decisions and allocating resources.

The following tables present our business segment information for the nine month periods ended July 31, 2021 and 2020:

	2021		2020
Revenues:
Apparel	$	49,675	$	52,396
House Wrap		126,713		121,652
Total Revenues	$	176,388	$	174,048
Assets:
Apparel	$	135,542	$	454,286
House Wrap		1,503,627		1,110,825
Total	$	1,639,169	$	1,565,111
Depreciation:
Apparel	$	7,116	$	7,116
House Wrap		17,865		17,865
Total	$	24,981	$	24,981

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS 

Three and Nine Month Periods Ended July 31, 2021 and 2020 (Unaudited)

NOTE 14. LEGAL PROCEEDINGS

 On November 4, 2016, the FTC filed a complaint against the Company in the U.S. District Court Western District of Pennsylvania, Case number 16-1669. In the complaint, the FTC alleges that, among other matters, the Company did not have substantiation of claims made by the Company regarding the R value and energy efficiency of its INSULTEX House Wrap products. The complaint asks as to redress a rescission of revenue the Company received from the sale of House Wrap and a permanent injunction. On September 24, 2020, a judgment was entered in favor of the Company as to all claims set forth in the FTC complaint. It was further ordered that as there were no remaining claims in the action the case shall be marked as closed.

 On November 23, 2020, the Company was informed that the FTC had filed a notice of appeal in regard to the case. The appeal is from the District Court’s September 24, 2020, Order granting the Company’s Motion for Judgment on Partial Findings Pursuant to Fed. R. Civ. P. 52(c) and subsequent Judgment in favor of the Company and from the District Court’s February 14, 2020, striking Dr. David Yarbrough’s expert testimony made on behalf of the FTC. The FTC filed its appeal and on March 24, 2021, the Company filed its answer.

On July 22, 2021, the Registrant was informed that the United States Court of Appeals for the Third District affirmed the District Court’s ruling in favor of the Registrant. The ruling was in connection with the Federal Trade Commission complaint filed against the Registrant in November 2016, alleging, among other matters, that the Registrant did not have substantiation for claims made by the Registrant regarding the R-value and energy efficiency of its INSULTIX House Wrap products.

NOTE 15. CONVERTIBLE PROMMISORY NOTE

On May 6, 2021, the Company issued a convertible promissory note in the principal amount of $50,000. The term of the note is one year. The interest rate is 8% per year. The principal amount of the note and any accrued but unpaid interest may be converted at any time into shares of the Company’s Common Stock on the basis of one share of Common Stock for each $0.50 in principal amount and any accrued but unpaid interest. The note is subject to adjustment in order to prevent dilution in the event the Company should subdivide or combine its Common Stock. The Company, at its option, may prepay the note in whole or in part upon 15 days written notice.

NOTE 16. SUBSEQUENT EVENTS

The Company has evaluated subsequent events in accordance with ASC Topic 855, “Subsequent Events”, through, which is the date financial statements were available to be issued. The Company identified the below subsequent event.

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INNOVATIVE DESIGNS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

The following information should be read in conjunction with the financial statements and the notes thereto and in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended October 31, 2020.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding future results of operation, made in this Quarterly Report on Form 10-Q are forward-looking statements. We use words such as expects, believes, intends, and similar expressions to identify forward-looking statements. Forward looking-looking statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons, including, among others, , competition in our cold weather markets, our ability to sell out HouseWrap product line, our inability to secure sufficient funding to maintain and/or expand our current level of operations and the seasonality of our cold weather product line. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management’s expectations, are described in greater detail in our Annual Report on Form 10-K for the fiscal year ended October 31, 2020. The Company undertakes no obligation to publicity update or revise any forward-looking statement, whether as a result of new information, future events or otherwise except as required by law.

Background

Innovative Designs, Inc. (hereinafter referred to as the “Company”, “we” or “our”) was formed on June 25, 2002. We market and sell clothing products such as outdoor apparel, and cold weather gear called “Arctic Armor” that are made from INSULTEX, a material with buoyancy, scent block and thermal resistant properties. We also market our House Wrap product line which is a building material with thermal qualities. House Wrap is also made from INSULTEX. We obtain INSULTEX through a license agreement with the owner and manufacturer of the material. Since our formation we have devoted our efforts to:

● Completing the development, design and prototypes of our products,

● Obtaining retail stores or sales agents to offer and sell our products,

● Developing our website to sell more of our products.

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Results of Operations

Comparison of the Three Month Period Ended July 31, 2021 with the Three Month Period Ended July 31, 2020.

The following table shows a comparison of the results of operations between the three month periods ended July 31, 2021 and July 31, 2020:

	Three Month Period Ended July 31, 2021			% of Sales			Three Month Period Ended July 31, 2020			% of Sales			Increase (Decrease)			% Change
REVENUE - NET	$	110,475			100	%	$	90,814			100	%	$	19,661			22	%
OPERATING EXPENSES
Cost of sales		50,712			46	%		42,965			47	%		7,747			18	%
Selling, general and  administrative expenses		58,518			53	%		91,354			101	%		(32,836	)		-36	%
		109,230			99	%		134,319			148	%		(25,089	)		-19	%
Loss from operations		1,245			1	%		(43,505	)		-48	%		44,750			-103	%
Other income (expense)		33,652			30	%		—			0	%		33,652			0	%
Other Expense
Interest expense		(13,417	)		-12	%		(2,173	)		-2	%		(11,244	)		517	%
Depreciation expense		(8,327	)		-8	%		(8,327	)		-9	%		—			0	%
Net Income	$	13,153			12	%	$	(54,005	)		-59	%	$	67,158			-124	%

Revenues for the three month period ended July 31, 2021 were $110,475 compared to revenues of $90,814 for the three month period ended April 30, 2020. The increase in revenue is attributable to an increase in our HouseWrap product sale. Substantially all of our revenue for the period was HouseWrap sale. In warmer months we sell less of our clod weather apparel products. See Note 13 of the Notes to the Condensed Financial Statements appearing elsewhere in this Report for a description of our segment product sales. .

Our selling, general and administrative expenses were $58,519 for the three months ended July 31, 2021 compared to $91,354 for the three month period ended July 31, 2020. Professional fees for the period ended July 31, 2021, were $12,930 compared to $14,390 for the three month period ended July 31, 2020. The majority of our professional fees related to the legal fees incurred in connection to the FTC matter. We expect our professional fees to decrease going forward.

- 13 -

INNOVATIVE DESIGNS, INC.

Results of Operations

Comparison of the Nine Month Period Ended July 31, 2021 with the Nine Month Period Ended July 31, 2020.

	Nine Month Period Ended July 31, 2021			% of Sales			Nine Month Period Ended July 31, 2020			% of Sales			Increase (Decrease)			% Change
REVENUE - NET	$	176,388			100	%	$	174,048			100	%	$	2,340			1	%
OPERATING EXPENSES
Cost of sales		78,352			44	%		78,664			45	%		(312	)		0	%
Selling, general and  administrative expenses		251,017			142	%		246,857			142	%		4,160			2	%
		329,369			187	%		325,521			187	%		3,848			1	%
Loss from operations		(152,981	)		-87	%		(151,473	)		-87	%		(1,508	)		1	%
Other income (expense)		62,475			35	%		833			0	%		61,642			7400	%
Other Expense
Interest expense		(30,810	)		-17	%		(9,668	)		-6	%		(21,142	)		219	%
Depreciation expense		(24,981	)		-14	%		(24,981	)		-14	%		—			0	%
Net Loss	$	(146,297	)		-83	%	$	(185,289	)		-106	%	$	38,992			-21	%

Revenues for the nine month period ended July 31, 2021 were $176,388 compared to revenues of $174,048 for the nine month period ended July 31, 2020. The increase in revenue is attributable to HouseWrap sales. HousWrap sales for the nine month period ended July 31, 2021 was $126,713. Compared to sales of $121,652 for the comparable period ended July 31, 2020. We believe our HouseWrap sales continue to be adversely affected by the COVID pandemic as many contractors could not access other building materials on account of supply chain bottlenecks. See Note 13 of the Notes to the Condensed Financial Statements appearing elsewhere in this Report for a description of our segment products sales.

Our selling, general and administrative expenses were $251,017 for the nine month period ended July 31, 2021 compared to $246,857 7for the nine month period ended July 31, 2020. Professional fees for the nine month period ended July 31, 2021 were $37,485 compared to $21,050 for the nine month period ended July 31, 2020. The majority of our professional fees relate to the legal fees incurred in connection to the FTC matter. We expect our professional fees to decrease going forward.

- 14 -

INNOVATIVE DESIGNS, INC.

Liquidity and Capital Resources

During the three month period ended July 31, 2021, we funded our operations from revenues from sales, and the sale of our common stock totaling $60,000.

Short Term: We will continue to fund our operations from sales and the sale of our securities. We continue to pay our creditors when payments are due. We will require more funds to be able to order the material for our INSULTEX products and to purchase equipment needed for the manufacture of the INSULTEX product. The Company reached an agreement with the manufacturer of the INSULTEX material to purchase a machine capable of producing the INSULTEX material. Also included in the proposed agreement will be the propriety formula that creates INSULTEX. The Company took delivery of the equipment in December 2015. The Company will have to have the machine installed and ensure that it can be operated in compliance with all environmental rules and regulations. It is the Company intentions to have the equipment operational but cannot currently provide a time estimate. Among the factors affecting the time estimate are financial resources available to the Company, finding a suitable facility and bringing technical personal from abroad to install the equipment. The Company has currently made deposits of $600,000 on the equipment. The Company has incurred $17,000 of additional expenses related to shipping. The Company will produce INSULTEX under its own brand name. See Note 10 of the Notes to the Condensed Financial Statements.

Long Term: The Company will continue to fund its operations from revenues, borrowings from private parties and the possible sale of our securities. Should we not be able to rely on the private sources for borrowing and /or increased sales, our operations would be severely affected as we would not be able to fund our purchase orders to our suppliers for finished goods and our efforts to produce our own INSULTEX would be delayed.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDING

See Legal Proceedings set forth in Part I Item 3 of the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2020.

ITEM 1A Risk Factors

See Risk factors set forth in in Part I Item 1A of the Company’s Annual report on Form 10-K for the fiscal year ended October 31, 2020.

- 15 -

INNOVATIVE DESIGNS, INC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

See Part II Item 5 of the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2020.

ITEM 3. Defaults upon Senior Securities

None

Item 4 Mine Safety Disclosures

Not applicable

ITEM 4T. CONTROLS AND PROCEDURES

Management has developed and implemented a policy and procedures for reviewing, on a quarterly basis, our disclosure controls and procedures. During the three month period ended July 31, 2021, our principle executive/financial officer concluded that these controls and procedures were ineffective. At this time, we do not have the financial resources to employ a financial staff with accounting and financial expertise. Once we have the necessary financial resources, we plan to hire and designate an individual responsible for identifying reportable developments and to implement procedures designed to remediate the material weakness by focusing additional attention and resources in our internal accounting functions.

Changes in Internal Control Over Financial Reporting

During the most recent fiscal quarter, there were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13(a)-15 or 15d-15 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Until the Company has the financial resources to employ a financial staff with accounting and financial expertise, to be able to properly account for internal financial reporting, errors that may have a material effect on the financial statements have the potential to occur.

ITEM 5. Other Information

None

- 16 -

INNOVATIVE DESIGNS, INC.

ITEM 6. EXHIBITS

*3.1	Revised Certificate of Incorporation
**3.2	By-Laws
31.1	Rule 13a - 14a Certification of Chief Executive Officer
31.2	Rule 13a-14a Certification of Chief Financial Officer and Principal Accounting Officer
32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
31.2	Section 1350 Certification of Chief Financial Officer and Chief Accounting Officer
*	Incorporated by reference to the Company’s Form 10-K filed February 12, 2015
**	Incorporated by reference to the Company’s registration statement on Form SB-2, filed March 11, 2003
99***	Incorporated by reference to the Company’s Current Report on Form 8-k, filed November 4, 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Innovative Designs, Inc.
		Registrant
Date: September 24, 2021	by:	/s/ Joseph Riccelli
		Joseph Riccelli, Chief Executive Officer
		and Chief Financial Officer

- 17 -

EX-31.1

EXHIBIT 31.1

INNOVATIVE DESIGNS, INC.

CERTIFICATIONS

I, Joseph Riccelli, certify that:

1.            I have reviewed this quarterly report on Form 10-Q of Innovative Designs, Inc.;

2.           Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.           Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.            I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.             I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 24, 2021	by:	/s/ Joseph Riccelli
	Joseph Riccelli
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

INNOVATIVE DESIGNS, INC.

CERTIFICATIONS

I, Joseph Riccelli, certify that:

1.             I have reviewed this quarterly report on Form 10-Q of Innovative Designs, Inc.;

2.             Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.            Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.            I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this annual report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.            I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 24, 2021	by:	/s/ Joseph Riccelli
		Joseph Riccelli
		Chief Financial Officer, Principal Accounting Officer

EX-32.1

EXHIBIT 32.1

SECTION 906 CERTIFICATION

CERTIFICATION REQUIRED BY

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Innovative Designs, Inc. (the “Company”) on Form 10-Q for the quarterly period ended July 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: September 24, 2021	by:	/s/ Joseph Riccelli
		Joseph Riccelli
		Chief Executive Officer

EX-32.2

EXHIBIT 32.2

SECTION 906 CERTIFICATION

CERTIFICATION REQUIRED BY

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Innovative Designs, Inc. (the “Company”) on Form 10-Q for the quarterly period ended July 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	September 24, 2021	by:	/s/ Joseph Riccelli
		Joseph Riccelli
		Chief Executive Officer, Chief
		Financial Officer, Principal
		Accounting Officer

XML

Cover - shares	9 Months Ended
	Jul. 31, 2021	Sep. 23, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jul. 31, 2021
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2021
Current Fiscal Year End Date	--10-31
Entity File Number	000-51791
Entity Registrant Name	INNOVATIVE DESIGNS, INC.
Entity Central Index Key	0001190370
Entity Tax Identification Number	03-0465528
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	124 Cherry Street
Entity Address, City or Town	Pittsburgh
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15223
City Area Code	412
Local Phone Number	799-0350
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		32,741,560

XML

CONDENSED BALANCE SHEETS (UNAUDITED) - USD ($)	Jul. 31, 2021	Oct. 31, 2020
CURRENT ASSETS
Cash	$ 326,932	$ 48,009
Accounts receivable - net of allowance for doubtful accounts of $5,860	3,056	19,900
Inventory - net of obsolete inventory reserve of $75,468	550,964	576,785
Current portion of right of use asset	40,404	38,775
Total current assets	921,356	683,469
PROPERTY AND EQUIPMENT - NET	40,206	65,187
OTHER ASSETS
Inventory on consignment	1,625	1,625
Deposits on inventory	57,330	57,330
Advance to employees	8,200	8,200
Right of use asset, net of current portion	10,452	40,962
Deposits on equipment	600,000	600,000
Total other assets	677,607	708,117
TOTAL ASSETS	1,639,169	1,456,773
CURRENT LIABILITIES
Accounts payable	202,257	270,792
Current portion of notes payable	18,628	18,628
Unearned revenue	2,000
Current portion of lease liability	40,404	38,775
Accrued interest expense	4,327	15,747
Due to shareholders	352,200	102,200
Accrued expenses	14,553	14,553
Total current liabilities	634,369	460,695
LONG-TERM LIABILITIES
Long-term portion of notes payable	71,722	107,193
Lease liability, net of current portion	10,452	40,962
Total long-term liabilities	82,174	148,155
TOTAL LIABILITIES	716,543	608,850
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value, 25,000,000 shares authorized
Common stock, $0.0001 par value, 100,800,000 shares authorized, and 32,341,560 and 31,211,560 issued and outstanding	3,236	3,123
Additional paid-in capital	10,795,715	10,574,828
Accumulated deficit	(9,876,325)	(9,730,028)
Total stockholders’ equity	922,626	847,923
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 1,639,169	$ 1,456,773

XML

CONDENSED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)	Jul. 31, 2021	Oct. 31, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 5,860	$ 5,860
Inventory obsolete reserve	$ 75,468	$ 75,468
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, authorized	25,000,000	25,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized	100,800,000	100,800,000
Common stock, issued	32,341,560	31,211,560
Common stock, outstanding	32,341,560	31,211,560

XML

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2021	Jul. 31, 2020	Jul. 31, 2021	Jul. 31, 2020
Income Statement [Abstract]
REVENUES - NET	$ 110,475	$ 90,814	$ 176,388	$ 174,048
OPERATING EXPENSES:
Cost of sales	50,712	42,965	78,352	78,664
Selling, general and administrative expenses	66,845	99,681	275,998	271,838
Total Operating Expenses	117,557	142,646	354,350	350,502
LOSS FROM OPERATIONS	(7,082)	(51,832)	(177,962)	(176,454)
OTHER INCOME (EXPENSE)
Miscellaneous income (expense)	33,652		62,475	833
Interest expense	(13,417)	(2,173)	(30,810)	(9,668)
Total other income (expense)	20,235	(2,173)	31,665	(8,835)
NET INCOME (LOSS)	$ 13,153	$ (54,005)	$ (146,297)	$ (185,289)
PER SHARE INFORMATION-FULLY DILUTED
Net Income (Loss) Per Common Share	$ 0.000	$ (0.002)	$ (0.005)	$ (0.006)
Weighted Average Number of Common Shares Outstanding	32,216,560	31,054,060	31,776,560	30,686,451
Net Income (Loss) Per Common Share	$ 0.000	$ (0.002)	$ (0.005)	$ (0.006)
Weighted Average Number of Common Shares Outstanding	32,229,060	31,054,060	31,789,060	30,686,451

XML

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($)	Common Stock [Member]	Common Stock To Be Issued [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Oct. 31, 2019	$ 3,013		$ 10,404,438	$ (9,568,706)	$ 838,745
Beginning Balance, Shares at Oct. 31, 2019	30,116,560
Sale of stock	$ 30		48,970		49,000
Sale of stock, shares	300,000
Net loss				(68,890)	(68,890)
Ending balance, value at Jan. 31, 2020	$ 3,043		10,453,408	(9,637,596)	818,855
Ending Balance, Shares at Jan. 31, 2020	30,416,560
Sale of stock	$ 45	10,000	72,455		82,500
Sale of stock, shares	450,000
Net loss				(62,394)	(62,394)
Ending balance, value at Apr. 30, 2020	$ 3,088	10,000	10,525,863	(9,699,990)	838,961
Ending Balance, Shares at Apr. 30, 2020	30,866,560
Sale of stock	$ 25	(10,000)	36,975		27,000
Sale of stock, shares	250,000
Net loss				(54,005)	(54,005)
Ending balance, value at Jul. 31, 2020	$ 3,113		10,562,838	(9,753,995)	811,956
Ending Balance, Shares at Jul. 31, 2020	31,116,560
Beginning balance, value at Oct. 31, 2020	$ 3,123		10,574,828	(9,730,028)	847,923
Beginning Balance, Shares at Oct. 31, 2020	31,211,560
Sale of stock	$ 10		24,990		25,000
Sale of stock, shares	100,000
Net loss				(35,965)	(35,965)
Ending balance, value at Jan. 31, 2021	$ 3,133		10,599,818	(9,765,993)	836,958
Ending Balance, Shares at Jan. 31, 2021	31,311,560
Sale of stock	$ 78		133,922		134,000
Sale of stock, shares	780,000
Net loss				(123,485)	(123,485)
Ending balance, value at Apr. 30, 2021	$ 3,211		10,733,740	(9,889,478)	847,473
Ending Balance, Shares at Apr. 30, 2021	32,091,560
Sale of stock	$ 25		61,975		62,000
Sale of stock, shares	250,000
Net loss				13,153	13,153
Ending balance, value at Jul. 31, 2021	$ 3,236		$ 10,795,715	$ (9,876,325)	$ 922,626
Ending Balance, Shares at Jul. 31, 2021	32,341,560

XML

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Jul. 31, 2021	Jul. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (146,297)	$ (185,289)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts		(4,549)
Common stock issued for services	66,000
Depreciation	24,981	24,981
Amortization of right of use asset	28,881	26,841
Increase (decrease) from changes in:
Accounts receivable	16,844	5,780
Inventory	25,821	15,493
Accounts payable	(68,534)	(30,094)
Unearned revenue	2,000
Accrued interest expense	(11,420)	(3,490)
Accrued expenses		3,637
Net cash used in operating activities	(61,724)	(146,690)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock	155,000	158,500
Proceeds (forgivness) from loans	(33,652)	33,652
Proceeds from shareholder advances	250,000	57,984
Payments on lease liability	(28,881)	(30,843)
Payments on notes payable	(1,820)	(7,456)
Net cash provided by financing activities	340,647	211,837
Net increase in cash	278,923	65,147
CASH, BEGINNING OF YEAR	48,009	34,525
CASH, END OF THE PERIOD	326,932	99,672
Supplemental disclosure of cash flow information:
Cash paid for interest	39,100	9,668
Cash paid for taxes

XML

BASIS OF PRESENTATION

9 Months Ended

Jul. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

NOTE 1. BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly Innovative Designs, Inc.’s financial position as of July 31, 2021, the changes therein for the three and nine month periods then ended and the results of operations for the three and nine month periods ended July 31, 2021 and 2020.

The financial statements included in the Form 10-Q are presented in accordance with the requirements of the Form and do not include all of the disclosures required by accounting principles generally accepted in the United States of America. For additional information, reference is made to the Innovative Designs, Inc.’s annual report on Form 10-K for the fiscal year ended October 31, 2020. The results of operations for the three and nine month periods ended July 31, 2021 and 2020 are not necessarily indicative of operating results for the full year.

XML

RIGHT OF USE ASSETS AND LEASE LIABILITIES

9 Months Ended

Jul. 31, 2021

Right Of Use Assets And Lease Liabilities

RIGHT OF USE ASSETS AND LEASE LIABILITIES

NOTE 2. RIGHT OF USE ASSETS AND LEASE LIABILITIES

During the quarter ended April 30, 2019, the Company implemented Accounting Standards Update 2016-02, Leases. Under the new guidance, a lessee must be recorded a liability for lease payments (referred to as the lease liability) and an asset for the right to use the leased asset during the lease term (referred to at the right of use asset) for all leases, regardless of whether they are designated as finance or operating leases. This election requires the lessee to recognize lease expense on a straight-line basis over the lease term. The right of use assets and corresponding right of use liabilities have been recorded using the present value of the leases. See Notes 11 and 12 within the financial statement for additional disclosure on leases

XML

GOING CONCERN

9 Months Ended

Jul. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GOING CONCERN

NOTE 3. GOING CONCERN

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company had a net loss of ($146,297) and a negative cash flow from operations of ($61,724) for the nine month period ended July 31, 2021. In addition, the Company has an accumulated deficit of ($9,876,325). Management’s plans include cash receipts through sales, sales of Company stock, and borrowings from private parties. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

XML

ACCOUNTS RECEIVABLE

9 Months Ended

Jul. 31, 2021

Receivables [Abstract]

ACCOUNTS RECEIVABLE

NOTE 4. ACCOUNTS RECEIVABLE

Management evaluates its receivables on a quarterly basis to assess the validity of remaining receivables. Management has determined that there is significant doubt regarding the receivable balance over 90 days of $5,860 as of the July 31, 2021 and October 31, 2020. Management has applied an allowance on all balances in excess of 90 days.

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INVENTORY

9 Months Ended

Jul. 31, 2021

Inventory Disclosure [Abstract]

INVENTORY

NOTE 5. INVENTORY

Inventory consists principally of purchased apparel inventory and House Wrap which is manufactured by the Company. Inventory is stated at the lower of cost or net realizable value on a first-in, first-out basis. The Company has decided to discontinue the selling of its hunting and swimming line of apparel. The Company has booked a reserve against apparel inventory at July 31, 2021 and October 31, 2020 of $75,468. Management has determined that no allowance is currently necessary on their House Wrap Inventory. Management will continue to evaluate its obsolete inventory reserve throughout the year and make adjustments as needed.

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EARNINGS PER SHARE

9 Months Ended

Jul. 31, 2021

PER SHARE INFORMATION-FULLY DILUTED

EARNINGS PER SHARE

NOTE 6. EARNINGS PER SHARE

The Company calculates net income (loss) per share in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 260 “Earnings per Share”. Basic earnings (loss) per share is calculated by dividing income (loss) by the weighted average number of common shares outstanding for the period. As described in Note 15, the Company has issued a convertible promissory note on May 6, 2021, therefore, fully diluted shares are presented in the Condensed Statements of income.

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INCOME TAXES

9 Months Ended

Jul. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 7. INCOME TAXES

The Company accounts for income taxes in accordance with ASC Topic 740 “Income Taxes”, which requires an asset and liability approach for financial reporting purposes.

Deferred income taxes are provided for differences between the tax bases of assets and liabilities and the financial reporting amounts at the end of the period, and for net operating loss and tax credit carryforwards available to offset future taxable income. Changes in enacted tax rates or laws result in adjustments to recorded deferred tax assets and liabilities in the periods in which the tax laws are enacted or tax rates are changed. The Company will continue to evaluate its income tax obligation throughout the year and will record a tax provision when it is necessary.

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SHIPPING AND HANDLING COSTS

9 Months Ended

Jul. 31, 2021

Shipping And Handling Costs

SHIPPING AND HANDLING COSTS

NOTE 8. SHIPPING AND HANDLING COSTS

The Company pays shipping and handling costs on behalf of customers for purchased apparel merchandise. These costs are billed back to the customer through the billing invoice. The shipping and handling costs associated with merchandise ordered by the Company are included as part of inventory as these costs are allocated across the merchandise received. With House Wrap orders, the customer pays the shipping cost. The shipping and handling costs associated with customer orders was approximately $6,400 and $4,400 for the nine month periods ended July 31, 2021 and 2020, respectively.

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COMMON STOCK

9 Months Ended

Jul. 31, 2021

Equity [Abstract]

COMMON STOCK

NOTE 9. COMMON STOCK

During the nine month period ended July 31, 2021, the Company issued 1,130,000 shares of common stock to investors for total proceeds of $221,000. The stock was issued between $0.12 and $0.25 per share.

During the nine month period ended July 31, 2020, the Company issued 1,000,000 shares of common stock to investors for total proceeds of $158,500. The stock was issued between $0.10 and $0.20 per share.

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DEPOSITS ON EQUIPMENT

9 Months Ended

Jul. 31, 2021

Deposits On Equipment

DEPOSITS ON EQUIPMENT

NOTE 10. DEPOSITS ON EQUIPMENT

On July 12, 2015 the Company reached an agreement with Ketut Jaya to purchase the machinery and equipment utilized to produce the INSULTEX material. The purchase price is $700,000 which was to be paid in four installments. The first installment of $300,000 was to be paid at the execution of the agreement. The second installment of $200,000 was to be paid when the machinery and equipment is ready to be shipped to the United States. The third installment of $100,000 is to be paid once the machinery and equipment is producing INSULTEX, and the fourth and final installment of $100,000 is to be made after the first commercial production run of INSULTEX is completed. As of April 30, 2020, the Company has made payments of $500,000 in accordance with the agreement and made a $100,000 pre-payment as the machine is not yet producing INSULTEX. Additionally, the Company has incurred $17,000 of additional expenses related to shipping, site improvements and installation of the equipment. Due to various environmental regulations regarding propane emitted from the machine into the air and other costs to assemble the machine the Company expects to incur costs in excess of the current deposit agreement. Management of the Company currently cannot reasonably estimate the costs. During the six month period ended April 30, 2019 Management decided to sell the machine. The shipping and other purchase costs associated with the purchase of the machine that were originally capitalized as part of the machine cost that were written off. The total loss on impairment for the six month period ended April 30, 2019 was $17,000. In July 2021, management has decided that it is no longer selling this equipment and is moving forward with plans of putting it in service in the future.

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RIGHT OF USE ASSETS

9 Months Ended

Jul. 31, 2021

Right Of Use Assets

RIGHT OF USE ASSETS

NOTE 11. RIGHT OF USE ASSETS

The Company entered into a month to month verbal lease at the time the Company was formed that is classified as right of use asset and lease liability. The lease for the Company’s office space is estimated to be through June 2022. In accordance with ASU 2016-02, the Company calculated the present value of the leases using the average commercial real estate interest rate of 5.50% at the commencement of the office lease. Applying the commercial rate, the Company calculated the present value of $150,496 for the office lease as of April 30, 2019.

As of July 31, 2021, the right of use assets associated with future operating lease is as follows:

Total present value of right of use asset under lease agreement	$	150,496
Amortization of right of use asset		(99,640	)
Total right of use asset as of July 31, 2021	$	50,856
Less current portion due within one year		40,404
Long-term right of use asset	$	10,452

Total amortization expense related to the right of use assets under the verbal lease agreement was $28,881 and $26,841 for the nine month periods ended July 31, 2021 and 2020, respectively.

Future amortization of the right of use asset as of July 31, 2021 is as follows:

2021	$	40,404
2022		10,452
Right of use assets	$	50,856

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RIGHT OF USE LEASE LIABILITY

9 Months Ended

Jul. 31, 2021

Right Of Use Lease Liability

RIGHT OF USE LEASE LIABILITY

NOTE 12. RIGHT OF USE LEASE LIABILITY

As disclosed in Note 11, the Company entered into a verbal lease for office space prior to the quarter ended July 31, 2021 that is classified as a right of use asset and lease liability.

As of July 31, 2021, the lease liability associated with future payments due under the verbal lease is as follows:

Total future minimum lease payments	$	115,500
Less present value discount		64,644
Total right of use lease liability as of April 30, 2021		50,856
Less current portion due within one year		40,404
Long-term right of use liability	$	10,452

Total maturities of lease liability as of July 31, 2021 are as follows:

	Total future minimum lease payments		Present value discount		Right of use lease liability
2021	$	42,000	$	1,596	$	40,404
2022		10,500		48		10,452
	$	52,500	$	1,644	$	50,856

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SEGMENT INFORMATION

9 Months Ended

Jul. 31, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 13. SEGMENT INFORMATION

We have organized our operations into two segments. We rely on an internal management reporting process that provides segment information for purposes of making financial decisions and allocating resources.

The following tables present our business segment information for the nine month periods ended July 31, 2021 and 2020:

	2021		2020
Revenues:
Apparel	$	49,675	$	52,396
House Wrap		126,713		121,652
Total Revenues	$	176,388	$	174,048
Assets:
Apparel	$	135,542	$	454,286
House Wrap		1,503,627		1,110,825
Total	$	1,639,169	$	1,565,111
Depreciation:
Apparel	$	7,116	$	7,116
House Wrap		17,865		17,865
Total	$	24,981	$	24,981

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LEGAL PROCEEDINGS

9 Months Ended

Jul. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

LEGAL PROCEEDINGS

NOTE 14. LEGAL PROCEEDINGS

 On November 4, 2016, the FTC filed a complaint against the Company in the U.S. District Court Western District of Pennsylvania, Case number 16-1669. In the complaint, the FTC alleges that, among other matters, the Company did not have substantiation of claims made by the Company regarding the R value and energy efficiency of its INSULTEX House Wrap products. The complaint asks as to redress a rescission of revenue the Company received from the sale of House Wrap and a permanent injunction. On September 24, 2020, a judgment was entered in favor of the Company as to all claims set forth in the FTC complaint. It was further ordered that as there were no remaining claims in the action the case shall be marked as closed.

 On November 23, 2020, the Company was informed that the FTC had filed a notice of appeal in regard to the case. The appeal is from the District Court’s September 24, 2020, Order granting the Company’s Motion for Judgment on Partial Findings Pursuant to Fed. R. Civ. P. 52(c) and subsequent Judgment in favor of the Company and from the District Court’s February 14, 2020, striking Dr. David Yarbrough’s expert testimony made on behalf of the FTC. The FTC filed its appeal and on March 24, 2021, the Company filed its answer.

On July 22, 2021, the Registrant was informed that the United States Court of Appeals for the Third District affirmed the District Court’s ruling in favor of the Registrant. The ruling was in connection with the Federal Trade Commission complaint filed against the Registrant in November 2016, alleging, among other matters, that the Registrant did not have substantiation for claims made by the Registrant regarding the R-value and energy efficiency of its INSULTIX House Wrap products.

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CONVERTIBLE PROMMISORY NOTE

9 Months Ended

Jul. 31, 2021

Debt Disclosure [Abstract]

CONVERTIBLE PROMMISORY NOTE

NOTE 15. CONVERTIBLE PROMMISORY NOTE

On May 6, 2021, the Company issued a convertible promissory note in the principal amount of $50,000. The term of the note is one year. The interest rate is 8% per year. The principal amount of the note and any accrued but unpaid interest may be converted at any time into shares of the Company’s Common Stock on the basis of one share of Common Stock for each $0.50 in principal amount and any accrued but unpaid interest. The note is subject to adjustment in order to prevent dilution in the event the Company should subdivide or combine its Common Stock. The Company, at its option, may prepay the note in whole or in part upon 15 days written notice.

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SUBSEQUENT EVENTS

9 Months Ended

Jul. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 16. SUBSEQUENT EVENTS

The Company has evaluated subsequent events in accordance with ASC Topic 855, “Subsequent Events”, through, which is the date financial statements were available to be issued. The Company identified the below subsequent event.

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RIGHT OF USE ASSETS (Tables)

9 Months Ended

Jul. 31, 2021

Right Of Use Assets

Right of use assets associated with future operating leases

Total present value of right of use asset under lease agreement	$	150,496
Amortization of right of use asset		(99,640	)
Total right of use asset as of July 31, 2021	$	50,856
Less current portion due within one year		40,404
Long-term right of use asset	$	10,452

Future amortization of right of use assets

2021	$	40,404
2022		10,452
Right of use assets	$	50,856

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RIGHT OF USE LEASE LIABILITY (Tables)

9 Months Ended

Jul. 31, 2021

Right Of Use Lease Liability

Schedule of future minimum lease payments

Total future minimum lease payments	$	115,500
Less present value discount		64,644
Total right of use lease liability as of April 30, 2021		50,856
Less current portion due within one year		40,404
Long-term right of use liability	$	10,452

Schedule of maturities of lease liabilities

	Total future minimum lease payments		Present value discount		Right of use lease liability
2021	$	42,000	$	1,596	$	40,404
2022		10,500		48		10,452
	$	52,500	$	1,644	$	50,856

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SEGMENT INFORMATION (Tables)

9 Months Ended

Jul. 31, 2021

Segment Reporting [Abstract]

Schedule of business segment information

	2021		2020
Revenues:
Apparel	$	49,675	$	52,396
House Wrap		126,713		121,652
Total Revenues	$	176,388	$	174,048
Assets:
Apparel	$	135,542	$	454,286
House Wrap		1,503,627		1,110,825
Total	$	1,639,169	$	1,565,111
Depreciation:
Apparel	$	7,116	$	7,116
House Wrap		17,865		17,865
Total	$	24,981	$	24,981

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GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2021	Jul. 31, 2020	Jul. 31, 2021	Jul. 31, 2020	Oct. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ (13,153)	$ 54,005	$ 146,297	$ 185,289
Net Cash Provided by (Used in) Operating Activities			61,724	$ 146,690
Accumulated deficit	$ 9,876,325		$ 9,876,325		$ 9,730,028

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ACCOUNTS RECEIVABLE (Details Narrative) - USD ($)	Jul. 31, 2021	Oct. 31, 2020
Receivables [Abstract]
Allowance for doubtful accounts	$ 5,860	$ 5,860

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INVENTORY (Details Narrative) - USD ($)	Jul. 31, 2021	Oct. 31, 2020
Inventory Disclosure [Abstract]
Inventory Valuation Reserves	$ 75,468	$ 75,468

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SHIPPING AND HANDLING COSTS (Details Narrative) - USD ($)	9 Months Ended
	Jul. 31, 2021	Jul. 31, 2020
Shipping And Handling Costs
Shipping and handling costs	$ 6,400	$ 4,400

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COMMON STOCK (Details Narrative) - USD ($)	9 Months Ended
	Jul. 31, 2021	Jul. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Proceeds from Issuance of Common Stock	$ 155,000	$ 158,500
One Individual [Member]
Defined Benefit Plan Disclosure [Line Items]
Number of shares issued during the period	1,130,000	1,000,000
Proceeds from Issuance of Common Stock	$ 221,000	$ 158,500
Nine Investors [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Share price (in dollars per share)	$ 0.12	$ 0.10
Nine Investors [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Share price (in dollars per share)	$ 0.25	$ 0.20

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DEPOSITS ON EQUIPMENT (Details Narrative) - USD ($)		9 Months Ended
	Jul. 12, 2015	Jul. 31, 2021	Jul. 31, 2019
Deposits On Equipment
Description of assets contract	The purchase price is $700,000 which was to be paid in four installments. The first installment of $300,000 was to be paid at the execution of the agreement. The second installment of $200,000 was to be paid when the machinery and equipment is ready to be shipped to the United States. The third installment of $100,000 is to be paid once the machinery and equipment is producing INSULTEX, and the fourth and final installment of $100,000 is to be made after the first commercial production run of INSULTEX is completed
Purchase price of equipment	$ 700,000
First installment for equipment	300,000
Second installment for equipment	200,000
Third installment for equipment	100,000
Fourth installment for equipment	$ 100,000
Deposits on equipment		$ 500,000
Advanced payment on machine		100,000
Shipping, site improvements and installation of the equipment expenses		$ 17,000
Loss on impairment			$ 17,000

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RIGHT OF USE ASSETS (Details) - USD ($)	9 Months Ended
	Jul. 31, 2021	Oct. 31, 2020
Right Of Use Assets
Total present value of right of use assets under lease agreements	$ 150,496
Amortization of right of use assets	(99,640)
Total right of use assets	50,856
Less current portion due within one year	40,404	$ 38,775
Long-term right of use asset	$ 10,452

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RIGHT OF USE ASSETS (Details 1)	Jul. 31, 2021 USD ($)
Right Of Use Assets
2021	$ 40,404
2022	10,452
Right of use assets	$ 50,856

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RIGHT OF USE ASSETS (Details Narrative) - USD ($)	9 Months Ended
	Jul. 31, 2021	Jul. 31, 2020
Right Of Use Assets
Average commercial real estate interest rate	5.50%
Total present value of right of use assets under lease agreements	$ 150,496
Amortization Expense	$ 28,881	$ 26,841

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RIGHT OF USE LEASE LIABILITY (Details) - USD ($)	Jul. 31, 2021	Oct. 31, 2020
Right Of Use Lease Liability
Total future minimum lease payments	$ 115,500
Less present value discount	64,644
Total right of use lease liability as of April 30, 2021	50,856
Less current portion due within one year	40,404	$ 38,775
Long-term right of use liability	$ 10,452	$ 40,962

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RIGHT OF USE LEASE LIABILITY (Details 1)	Jul. 31, 2021 USD ($)
Right Of Use Lease Liability
2021	$ 42,000
2021	1,596
2021	40,404
2022	10,500
2022	48
2022	10,452
Total future minimum lease payments	52,500
Present value discount	1,644
Right of use lease liablilties	$ 50,856

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SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2021	Jul. 31, 2020	Jul. 31, 2021	Jul. 31, 2020
Segment Reporting Information [Line Items]
Total Revenues	$ 110,475	$ 90,814	$ 176,388	$ 174,048
Capital Expenditures			1,639,169	1,565,111
Depreciation			24,981	24,981
Apparel Segment [Member]
Segment Reporting Information [Line Items]
Total Revenues			49,675	52,396
Capital Expenditures			135,542	454,286
Depreciation			7,116	7,116
Housewrap Segment [Member]
Segment Reporting Information [Line Items]
Total Revenues			126,713	121,652
Capital Expenditures			1,503,627	1,110,825
Depreciation			$ 17,865	$ 17,865

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SEGMENT INFORMATION (Details Narrative)	9 Months Ended
	Jul. 31, 2021 Integer
Segment Reporting [Abstract]
Number of reportable segments	2

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CONVERTIBLE PROMMISORY NOTE (Details Narrative) - Covertible Promissory Note [Member]	May 06, 2021 USD ($) $ / shares
Short-term Debt [Line Items]
Principal amount | $	$ 50,000
Interest Rate	8.00%
Conversion Price | $ / shares	$ 0.50