A UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

~~FOR~~FOMRM 10-Q

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

For the quarterly period ended ~~April 30,~~July 31, 2021

☐	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~~

☐

NOYES

☒

☐

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 t~~whehether 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 ~~21,~~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 ~~April 30,~~July 31, 2021

	Part I -- Financial Information	Page No.

Item 1.	Condensed Financial Statements (Unaudited)

	Condensed Balance Sheets as of ~~April 30,~~July 31, 2021 (Unaudited) And October 31, 2020	1

	Condensed Statements of Operations for the ~~Six~~Nine Month Periods Ended ~~April 30,~~July 31, 2021 and 2020 (Unaudited)	3

	Condensed Statements of Changes in Stockholders’ Equity as of ~~April 30,~~July 31, 2021 (Unaudited) and October 31, 2020	4

	Condensed Statements of Cash Flows for the ~~Six~~Nine Month Periods Ended ~~April 30,~~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

~~APRIL 30,~~JULY 31, 2021 (UNAUDITED) AND OCTOBER 31, 2020


	April 30, 2021		October 31, 2020		July 31, 2021		October 31, 2020
ASSETS
CURRENT ASSETS
Cash	$	220,899	$	48,009	$	326,932	$	48,009
Accounts receivable - net of allowance for doubtful accounts of $5,860		4,766		19,900		3,056		19,900
Inventory - net of obsolete inventory reserve of $75,468		574,125		576,785		550,964		576,785
Current portion of right of use asset		39,853		38,775		40,404		38,775
Total current assets		839,643		683,469		921,356		683,469

PROPERTY AND EQUIPMENT - NET		48,533		65,187		40,206		65,187

OTHER ASSETS
Inventory on consignment		1,625		1,625		1,625		1,625
Deposits on inventory		57,330		57,330		57,330		57,330
Advance to employees		8,200		8,200		8,200		8,200
Right of use asset, net of current portion		20,762		40,962		10,452		40,962
Deposits on equipment		600,000		600,000		600,000		600,000
Total other assets		687,917		708,117		677,607		708,117

TOTAL ASSETS	$	1,576,093	$	1,456,773	$	1,639,169	$	1,456,773

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

- 1 -

INNOVATIVE DESIGNS, INC.

CONDENSED BALANCE SHEETS

~~APRIL 30,~~JULY 31, 2021 (UNAUDITED) AND OCTOBER 31, 2020

	April 30, 2021			October 31, 2020			July 31, 2021			October 31, 2020
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	210,234		$	270,792		$	202,257		$	270,792
Current portion of notes payable		18,628			18,628			18,628			18,628
Unearned revenue								2,000			—
Current portion of lease liability		39,853			38,775			40,404			38,775
Accrued interest expense		17,017			15,747			4,327			15,747
Due to shareholders		302,200			102,200			352,200			102,200
Accrued expenses		14,553			14,553			14,553			14,553
Total current liabilities		602,485			460,695			634,369			460,695

LONG-TERM LIABILITIES
Long-term portion of notes payable		105,373			107,193			71,722			107,193
Lease liability, net of current portion		20,762			40,962			10,452			40,962
Total long-term liabilities		126,135			148,155			82,174			148,155

TOTAL LIABILITIES		728,620			608,850			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 32,091,560 and 30,866,560 issued and outstanding		3,211			3,123
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		10,733,740			10,574,828			10,795,715			10,574,828
Accumulated deficit		(9,889,478	)		(9,730,028	)		(9,876,325	)		(9,730,028	)
Total stockholders’ equity		847,473			847,923			922,626			847,923

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,576,093		$	1,456,773		$	1,639,169		$	1,456,773

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

- 2 -

INNOVATIVE DESIGNS, INC.

CONDENSED STATEMENTS OF OPERATIONS

THREE AND ~~SIX~~NINE MONTHS ENDED ~~APRIL 30,~~JULY 31, 2021 AND 2020 (UNAUDITED)


	Three Months Ended April 30,						Six Months Ended April 30,						Three Months Ended July 31,						Nine Months Ended July 31,
	2021			2020			2021			2020			2021			2020			2021			2020

REVENUES - NET	$	25,896		$	35,808		$	65,913		$	83,234		$	110,475		$	90,814		$	176,388		$	174,048

OPERATING EXPENSES:
Cost of sales		9,006			15,311			27,641			35,699			50,712			42,965			78,352			78,664
Selling, general and administrative expenses		127,943			80,612			209,153			172,157			66,845			99,681			275,998			271,838
Total Operating Expenses		136,949			95,923			236,794			207,856			117,557			142,646			354,350			350,502

LOSS FROM OPERATIONS		(111,053	)		(60,115	)		(170,881	)		(124,622	)		(7,082	)		(51,832	)		(177,962	)		(176,454	)

OTHER INCOME (EXPENSE)
Miscellaneous income (expense)		—			—			28,823			833			33,652			—			62,475			833
Interest expense		(12,432	)		(2,279	)		(17,392	)		(7,495	)		(13,417	)		(2,173	)		(30,810	)		(9,668	)
Total other income (expense)		(12,432	)		(2,279	)		11,431			(6,662	)		20,235			(2,173	)		31,665			(8,835	)

NET LOSS	$	(123,485	)	$	(62,394	)	$	(159,450	)	$	(131,284	)
NET INCOME (LOSS)													$	13,153		$	(54,005	)	$	(146,297	)	$	(185,289	)

PER SHARE INFORMATION
Net Loss Per Common Share	$	(0.004	)	$	(0.002	)	$	(0.005	)	$	(0.004	)
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		31,704,732			30,746,560			31,654,727			30,500,626			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.

- 3 -

INNOVATIVE DESIGNS, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THREE AND ~~SIX~~NINE MONTHS ENDED ~~APRIL 30,~~JULY 31, 2021 AND 2020 (UNAUDITED)


	Common Stock				Common Stock		Additional Paid-in		Accumulated						Common Stock				Common Stock			Additional Paid-in		Accumulated
	Shares		Amount		To be Issued		Capital		Deficit			Total			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			31,211,560	$	3,123		—		$	10,574,828	$	(9,730,028	)	$	847,923

Sale of stock		100,000		10		—		24,990		—			25,000			100,000		10		—			24,990		—			25,000
Net loss		—		—		—		—		(35,965	)		(35,965	)		—		—		—			—		(35,965	)		(35,965	)

Balance at January 31, 2021		31,311,560		3,133		—		10,599,818		(9,765,993	)		836,958			31,311,560		3,133		—			10,599,818		(9,765,993	)		836,958

Sale of stock		780,000		78				133,922					134,000			780,000		78					133,922					134,000
Net loss		—		—		—		—		(123,485	)		(123,485	)		—		—		—			—		(123,485	)		(123,485	)

Balance at April 30, 2021		32,091,560	$	3,211	$	—	$	10,733,740	$	(9,889,478	)	$	847,473			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			30,116,560	$	3,013	$	—		$	10,404,438	$	(9,568,706	)	$	838,745

Sale of stock		300,000		30		—		48,970		—			49,000			300,000		30		—			48,970		—			49,000
Net loss		—		—		—		—		(68,890	)		(68,890	)		—		—		—			—		(68,890	)		(68,890	)

Balance at January 31, 2020		30,416,560		3,043		—		10,453,408		(9,637,596	)		818,855			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			450,000		45		10,000			72,455		—			82,500
Net loss		—		—		—		—		(62,394	)		(62,394	)		—		—		—			—		(62,394	)		(62,394	)

Balance at April 30, 2020		30,866,560	$	3,088	$	10,000	$	10,525,863	$	(9,699,990	)	$	838,961			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 ~~SIX~~NINE MONTHS ENDED ~~APRIL 30,~~JULY 31, 2021 AND 2020 (UNAUDITED)


	Six Months Ended April 30,						Nine Months Ended July 31,
	2021			2020			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(159,450	)	$	(131,284	)	$	(146,297	)	$	(185,289	)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts		—			(4,550	)		—			(4,549	)
Common stock issued for services		64,000			—			66,000			—
Depreciation		16,654			16,654			24,981			24,981
Amortization of right of use asset		19,122			17,894			28,881			26,841
(Increase) decrease from changes in:
Accounts receivable		15,134			8,138			16,844			5,780
Inventory		2,660			1,835			25,821			15,493
Increase (decrease) from changes in:
Accounts payable		(60,558	)		(36,929	)		(68,534	)		(30,094	)
Unearned revenue								2,000			—
Accrued interest expense		1,270			(3,490	)		(11,420	)		(3,490	)
Accrued expenses		—			1,729			—			3,637
Net cash used in operating activities		(101,168	)		(130,003	)		(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		95,000			131,500			155,000			158,500
Proceeds (forgivness) from loans								(33,652	)		33,652
Proceeds from shareholder advances		200,000			68,670			250,000			57,984
Payments on lease liability		(19,122	)		(21,896	)		(28,881	)		(30,843	)
Payments on notes payable		(1,820	)		(7,456	)		(1,820	)		(7,456	)
Net cash provided by financing activities		274,058			170,818			340,647			211,837

Net decrease in cash		172,890			40,815
Net increase in cash								278,923			65,147

CASH, BEGINNING OF YEAR		48,009			34,525			48,009			34,525

CASH, END OF THE PERIOD	$	220,899		$	75,340		$	326,932		$	99,672

Supplemental disclosure of cash flow information:
Cash paid for interest	$	14,300		$	7,495		$	39,100		$	9,668

Cash paid for taxes	$	—		$	—		$	—		$	—

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

- 5 -

INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and ~~Six~~Nine Month Periods Ended ~~April 30,~~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 ~~April 30,~~July 31, 2021, the changes therein for the three and ~~six~~nine month periods then ended and the results of operations for the three and ~~six~~nine month periods ended ~~April 30,~~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 ~~six~~nine month periods ended ~~April 30,~~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 ($~~159,450~~146,297) and a negative cash flow from operations of ($~~165,168~~ ~~101,168~~61,724) for the ~~six~~nine month period ended ~~April 30,~~July 31, 2021. In addition, the Company has an accumulated deficit of ($~~9,889,478~~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 ~~April 30,~~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 ~~Six~~Nine Month Periods Ended ~~April 30,~~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 ~~April 30,~~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. ~~During the periods presented,~~As described in Note 15, the Company ~~only~~ has ~~common stock outstanding. As~~issued a ~~result,~~convertible promissory note on May 6, 2021, therefore, fully diluted ~~earnings per share was not calculated.~~

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 $~~6,300~~6,400 and $4,400 for the ~~six~~nine month periods ended ~~April 30,~~July 31, 2021 and 2020, respectively.

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and ~~Six~~Nine Month Periods Ended ~~April 30,~~July 31, 2021 and 2020 (Unaudited)

NOTE 9.

COMMON STOCK

During the ~~six~~nine month period ended ~~April 30,~~July 31, 2021, the Company issued ~~880,000~~1,130,000 shares of common stock to investors for total proceeds of $~~159,000~~221,000. The stock was issued between $0.12 and $0.25 per share.

During the ~~six~~nine month period ended ~~April 30,~~July 31, 2020, the Company issued ~~850,000~~1,000,000 shares of common stock to investors for total proceeds of $~~131,500~~158,500. The stock was issued between $~~0.125~~0.10 and $0.20 per share. ~~Of these shares, 100,000 shares were issued subsequent to April 30, 2020.~~

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 ~~Six~~Nine Month Periods Ended ~~April 30,~~July 31, 2021 and 2020 (Unaudited)

NOTE 11.

RIGHT OF USE ASSETS (CONTINUED)

As of ~~April 30,~~July 31, 2021, the right of use assets associated with future operating lease is as follows:

Right of use assets associated with future operating leases
Total present value of right of use asset under lease agreement	$	150,496		$	150,496

Amortization of right of use asset		(89,881	)		(99,640	)

Total right of use asset as of April 30, 2021	$	60,615
Total right of use asset as of July 31, 2021				$	50,856

Less current portion due within one year		39,853			40,404

Long-term right of use asset	$	20,762		$	10,452

Total amortization expense related to the right of use assets under the verbal lease agreement was $~~19,122~~28,881 and $~~17,894~~26,841 for the ~~six~~nine month periods ended ~~April 30,~~July 31, 2021 and 2020, respectively.

Future amortization of the right of use asset as of ~~April 30,~~July 31, 2021 is as follows:

Future amortization of right of use assets
2021	$	39,853	$	40,404
2022		20,762		10,452
Right of use asset	$	60,615
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 ~~April 30,~~July 31, 2021 that is classified as a right of use asset and lease liability.

As of ~~April 30,~~July 31, 2021, the lease liability associated with future payments due under the verbal lease is as follows:

Schedule of future minimum lease payments
Total future minimum lease payments	$	115,500	$	115,500

Less present value discount		54,885		64,644

Total right of use lease liability as of April 30, 2021		60,615		50,856

Less current portion due within one year		39,853		40,404

Long-term right of use liability	$	20,762	$	10,452

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and ~~Six~~Nine Month Periods Ended ~~April 30,~~July 31, 2021 and 2020 (Unaudited)

Total maturities of lease liability as of ~~April 30,~~July 31, 2021 are as follows:

Schedule of maturities of lease liabilities
Total future minimum lease payments Present value discount Right of use lease liability

2021 $ 42,000 $ 2,147 $ 39,853
2022 21,000 238 20,762

$ 63,000 $ 2,385 $ 60,615

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

NOTE 13.

SEGMENT INFORMATION

We have organized our operations into two 2 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 ~~six~~nine month periods ended ~~April 30,~~July 31, 2021 and 2020:

Schedule of business segment information
	2021		2020		2021		2020

Revenues:
Apparel	$	49,163	$	46,368	$	49,675	$	52,396
House Wrap		16,750		36,866		126,713		121,652
Total Revenues	$	65,913	$	83,234	$	176,388	$	174,048

Assets:
Apparel	$	135,860	$	460,916	$	135,542	$	454,286
House Wrap		1,440,233		1,108,437		1,503,627		1,110,825
Total	$	1,576,093	$	1,569,353	$	1,639,169	$	1,565,111

Depreciation:
Apparel	$	4,744	$	4,744	$	7,116	$	7,116
House Wrap		11,910		11,910		17,865		17,865
Total	$	16,654	$	16,654	$	24,981	$	24,981

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and ~~Six~~Nine Month Periods Ended ~~April 30,~~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 ~~15.~~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.

~~In June 2021, the Company’s PPP Loan was forgiven by the Small Business Administration. The Company will recognized $33,652~~ ~~in income from the forgiveness of debt at this time.~~

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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 ~~April 30,~~July 31, 2021 with the Three Month Period Ended ~~April 30,~~July 31, 2020.

The following table shows a comparison of the results of operations between the three month periods ended ~~April 30,~~July 31, 2021 and ~~April 30,~~July 31, 2020:

	Three Month						Three Month
	Period Ended						Period Ended
	April 30,			% of			April 30,			% of			Increase
	2021			Sales			2020			Sales			(Decrease)			% Change			Three Month Period Ended July 31, 2021			% of Sales			Three Month Period Ended July 31, 2020			% of Sales			Increase (Decrease)			% Change

REVENUE - NET	$	25,896			100	%	$	35,808			100	%	$	(9,912	)		-28	%	$	110,475			100	%	$	90,814			100	%	$	19,661			22	%

OPERATING EXPENSES
Cost of sales		9,006			35	%		15,311			43	%		(6,305	)		-41	%		50,712			46	%		42,965			47	%		7,747			18	%
Selling, general and administrative expenses		119,616			462	%		72,285			202	%		47,331			65	%		58,518			53	%		91,354			101	%		(32,836	)		-36	%
		128,622			497	%		87,596			245	%		41,026			47	%		109,230			99	%		134,319			148	%		(25,089	)		-19	%

Loss from operations		(102,726	)		-397	%		(51,788	)		-145	%		(50,938	)		98	%		1,245			1	%		(43,505	)		-48	%		44,750			-103	%

Other income (expense)		—			0	%		—			0	%		—			0	%		33,652			30	%		—			0	%		33,652			0	%
Other Expense
Interest expense		(12,432	)		-48	%		(2,279	)		-6	%		(10,153	)		446	%		(13,417	)		-12	%		(2,173	)		-2	%		(11,244	)		517	%
Depreciation expense		(8,327	)		-32	%		(8,327	)		-23	%		—			0	%		(8,327	)		-8	%		(8,327	)		-9	%		—			0	%

Net Loss	$	(123,485	)		-477	%	$	(62,394	)		-174	%	$	(61,091	)		98	%
Net Income																			$	13,153			12	%	$	(54,005	)		-59	%	$	67,158			-124	%

Revenues for the three month period ended ~~April 30,~~July 31, 2021 were ~~$25,896~~$110,475 compared to revenues of ~~$35,808~~$90,814 for the three month period ended April 30, 2020. The ~~decrease~~increase in revenue is attributable to ~~a decrease~~an increase in ~~sales~~our HouseWrap product sale. Substantially all of ~~house wrap~~our revenue for the period was HouseWrap sale. In warmer months we sell less of ~~approximately $19,000 while~~our clod weather apparel ~~sales were up approximately $9,100.~~products. See Note 1013 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 ~~$119,616~~$58,519 for the three months ended ~~April 30,~~July 31, 2021 compared to ~~$72,285~~$91,354 for the three month period ended ~~April 30,~~July 31, 2020. Professional fees for the period ended ~~April 30,~~July 31, 2021, were ~~$28,942~~$12,930 compared to ~~$17,584~~$14,390 for the three month period ended ~~April 30,~~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.

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INNOVATIVE DESIGNS, INC.

Results of Operations

Comparison of the ~~Six~~Nine Month Period Ended ~~April 30,~~July 31, 2021 with the ~~Six~~Nine Month Period Ended ~~April 30,~~July 31, 2020.

	Six Month						Six Month
	Period Ended						Period Ended
	April 30,			% of			April 30,			% of			Increase
	2021			Sales			2020			Sales			(Decrease)			% Change			Nine Month Period Ended July 31, 2021			% of Sales			Nine Month Period Ended July 31, 2020			% of Sales			Increase (Decrease)			% Change

REVENUE - NET	$	65,913			100	%	$	83,234			100	%	$	(17,321	)		-21	%	$	176,388			100	%	$	174,048			100	%	$	2,340			1	%

OPERATING EXPENSES
Cost of sales		27,641			42	%		35,699			43	%		(8,058	)		-23	%		78,352			44	%		78,664			45	%		(312	)		0	%
Selling, general and administrative expenses		192,499			292	%		155,503			187	%		36,996			24	%		251,017			142	%		246,857			142	%		4,160			2	%
		220,140			334	%		191,202			230	%		28,938			15	%		329,369			187	%		325,521			187	%		3,848			1	%

Loss from operations		(154,227	)		-234	%		(107,968	)		-130	%		(46,259	)		-43	%		(152,981	)		-87	%		(151,473	)		-87	%		(1,508	)		1	%

Other income (expense)		28,823			44	%		833			1	%		27,990			3360	%		62,475			35	%		833			0	%		61,642			7400	%
Other Expense
Interest expense		(17,392	)		-26	%		(7,495	)		-9	%		(9,897	)		-132	%		(30,810	)		-17	%		(9,668	)		-6	%		(21,142	)		219	%
Depreciation expense		(16,654	)		-25	%		(16,654	)		-20	%		—			0	%		(24,981	)		-14	%		(24,981	)		-14	%		—			0	%

Net Loss	$	(159,450	)		-242	%	$	(131,284	)		-158	%	$	(28,166	)		-21	%	$	(146,297	)		-83	%	$	(185,289	)		-106	%	$	38,992			-21	%

Revenues for the ~~six~~nine month period ended ~~April 30,~~July 31, 2021 were ~~$65,913~~$176,388 compared to revenues of ~~$83,234~~$174,048 for the ~~six~~nine month period ended ~~April 30,~~July 31, 2020. The ~~decrease~~increase in revenue is attributable ~~a decrease in our apparel products revenue, $33,937~~to HouseWrap sales. HousWrap sales for the ~~period compared to $ 43,661 for the three~~nine month period ended ~~January~~July 31, ~~2020. The decrease in revenue for our apparel products is as result~~2021 was $126,713. Compared to sales of ~~the warmer weather for our cold weather products. HouseWrap sales were $6,080~~$121,652 for the ~~period compared to $3,765 in sales for the~~comparable period ended ~~January~~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 ~~Cost of Goods sold~~selling, general and administrative expenses were ~~$18,635~~$251,017 for the ~~three~~nine month period ended ~~January~~July 31, 2021 compared to ~~$20,388 for~~$246,857 7for the ~~three~~nine month period ended ~~January~~July 31, 2020. Professional fees for the ~~three~~nine month period ended ~~January~~July 31, 2021 were ~~$24,555~~$37,485 compared to ~~$6,660~~$21,050 for the ~~three~~nine month period ended ~~January~~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.

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INNOVATIVE DESIGNS, INC.

Liquidity and Capital Resources

During the three month period ended ~~April 30 ,~~July 31, 2021, we funded our operations from revenues from sales, and the sale of our common stock totaling ~~$70,000..~~

~~Subsequent to the period on May 6, 2021, we issued a one year convertible promissory note in the principle amount of $50,000 with a 8% interest rate. The note is convertible at $.50 per share.~~$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.

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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 ~~April 30,~~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

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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 ~~22,~~24, 2021	by:	/s/ Joseph Riccelli
		Joseph Riccelli, Chief Executive Officer
		and Chief Financial Officer

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