Innovative Designs Inc. Files 10-Q for Period Ending January 31, 2024

TL;DR

<b>Innovative Designs Inc. has filed its quarterly report (10-Q) for the period ending January 31, 2024.</b>

AI Summary

INNOVATIVE DESIGNS INC (IVDN) filed a Quarterly Report (10-Q) with the SEC on April 30, 2024. Innovative Designs Inc. filed a 10-Q for the quarterly period ended January 31, 2024. The filing covers the period from November 1, 2023, to January 31, 2024. The company's fiscal year ends on October 31. The filing was made on April 30, 2024. Innovative Designs Inc. is classified under Standard Industrial Classification Code 2390: Miscellaneous Fabricated Textile Products.

Why It Matters

For investors and stakeholders tracking INNOVATIVE DESIGNS INC, this filing contains several important signals. This 10-Q filing provides investors with an update on the company's financial performance and operational status for the first quarter of its fiscal year. Understanding the details within this report is crucial for assessing the company's current financial health, recent business activities, and future prospects.

Risk Assessment

Risk Level: low — INNOVATIVE DESIGNS INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate, significant financial or operational disclosures that would inherently increase risk.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to understand the company's performance and outlook.

Key Numbers

• 2024-01-31 — Quarterly Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-04-30 — Filing Date (FILED AS OF DATE)
• 10-31 — Fiscal Year End (FISCAL YEAR END)
• 2390 — SIC Code (STANDARD INDUSTRIAL CLASSIFICATION)

Key Players & Entities

• INNOVATIVE DESIGNS INC (company) — COMPANY CONFORMED NAME
• 0001731122-24-000714 (filing_id) — ACCESSION NUMBER
• 2024-01-31 (date) — CONFORMED PERIOD OF REPORT
• 2024-04-30 (date) — FILED AS OF DATE
• 2390 (sic_code) — STANDARD INDUSTRIAL CLASSIFICATION
• 124 CHERRY ST. STE 1, PITTSBURGH, PA 15223 (address) — BUSINESS ADDRESS
• 4127990350 (phone) — BUSINESS PHONE
• 1934 Act (regulation) — SEC ACT

FAQ

Key Dates

• 2024-01-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-04-30: Filing Date — Date the 10-Q was officially filed with the SEC.
• 2023-10-31: Fiscal Year End — Indicates the end of the company's annual fiscal cycle.

Key Financial Figures

• $300,000 — installments. The first installment of $300,000 is to be made at the execution of the a
• $200,000 — he agreement. The second installment of $200,000 is to be made when the machinery and eq
• $100,000 — United States. The third installment of $100,000 is to be made once the machinery and eq
• $65,886 — onth period ended January 31, 2024, was $65,886 compared to revenues of $71,647 for the
• $71,647 — 24, was $65,886 compared to revenues of $71,647 for the three-month period ended Januar

Filing Documents

• e5633_10q.htm (10-Q) — 361KB
• e5633_ex10.htm (EX-10) — 34KB
• e5633_ex31-1.htm (EX-31.1) — 10KB
• e5633_ex31-2.htm (EX-31.2) — 8KB
• e5633_ex32-1.htm (EX-32.1) — 4KB
• e5633_ex32-2.htm (EX-32.2) — 6KB
• 0001731122-24-000714.txt (&nbsp;) — 2371KB
• ivdn-20240131.xsd (EX-101.SCH) — 28KB
• ivdn-20240131_cal.xml (EX-101.CAL) — 37KB
• ivdn-20240131_def.xml (EX-101.DEF) — 47KB
• ivdn-20240131_lab.xml (EX-101.LAB) — 206KB
• ivdn-20240131_pre.xml (EX-101.PRE) — 160KB
• e5633_10q_htm.xml (XML) — 175KB

-- Financial Information

Part I -- Financial Information Page No. Item 1. Condensed Financial Statements (Unaudited) Condensed Balance Sheets as of January 31, 2024 (Unaudited) And October 31, 2023 5 Condensed Statements of Operations for the Three Month Periods Ended January 31, 2024 and 2023 (Unaudited) 7 Condensed Statements of Changes in Stockholders' Equity as of January 31, 2024 (Unaudited) and October 31, 2023 8 Condensed Statements of Cash Flows for the Three Month Periods Ended January 31, 2024 and 2023 (Unaudited) 9 Notes to the Condensed Financial Statements 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15

-- Other Information

Part II -- Other Information Items 1, 2, 3, 4, 4T and 5. 17 Item 6. Exhibits 19 2 INNOVATIVE DESIGNS, INC. FINANCIAL FOR THE QUARTER ENDED JANUARY 31, 2024 3 TABLE OF CONTENTS PAGE

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS: CONDENSED BALANCE SHEETS 5 CONDENSED STATEMENTS OF OPERATIONS 7 CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY 8 CONDENSED STATEMENTS OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS 9 4 CONDENSED BALANCE SHEETS JANUARY 31, 2024 (UNAUDITED) AND OCTOBER 31, 2023 January 31, 2024 October 31, 2023 ASSETS CURRENT ASSETS: Cash $ 208,153 $ 238,677 Accounts receivable, net 10,397 31,050 Inventory, net 601,027 549,277 Prepaid rent 6,400 — Total current assets 825,977 819,004 PROPERTY AND EQUIPMENT, net 22,314 23,479 OTHER ASSETS: Deposits on inventory 20,000 — Advance to employees 13,200 8,200 Deposits on equipment 652,944 652,944 Total other assets 666,144 661,144 TOTAL $ 1,514,435 $ 1,503,627 The accompanying notes are an integral part of these condensed financial statements. 5 CONDENSED BALANCE SHEETS JANUARY 31, 2024 (UNAUDITED) AND OCTOBER 31, 2023 January 31, 2024 October 31, 2023 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 84,720 216,626 Current portion of notes payable 70,530 20,397 Accrued interest of stockholder loans 35,244 42,873 Current portion of stockholder loans 12,000 70,668 Total current liabilities 202,494 350,564 LONG-TERM LIABILITIES, Long-term portion of notes payable 39,380 44,429 Total long-term liabilities 39,380 44,429 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 37,783,448 and 34,650,560 issued and outstanding 3,781 3,656 Common stock to be issued — — Additional paid-in capital 11,969,130 11,741,935 Accumulated deficit ( 10,700,350 ) ( 10,636,957 ) Total stockholders' equity 1,272,561 1,108,634 TOTAL $ 1,514,435 $ 1,503,627 The accompanying notes are an integral part of these condensed financial statements. 6 INNOVATIVE DESIGNS, INC. CONDENSED STATEMENTS OF OPERATIONS THREE MONTHS ENDED JANUARY 31, 2024 AND 2023 (UNAUDITED) Three Months Ended January 31, 2024 2023 REVENUES, net $ 65,886 71,647 OPERA

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS 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 (the "Company") financial position as of January 31, 2024, the changes therein for the three month periods then ended and the results of operations for the three month periods ended January 31, 2024 and 2023. The condensed financial statements included in the Form 10-Q (the "Form") 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 Company's annual report on Form 10-K for the fiscal year ended October 31, 2023. The results of operations for the three month periods ended January 31, 2024 and 2023 are not necessarily indicative of operating results for the full year. 2. GOING CONCERN These condensed 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 ($ 63,393 ) and a negative cash flow of ($ 102,860 ) for the three month period ended January 31, 2024. In addition, the Company has an accumulated deficit of ($ 10,700,350 ). 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 condensed financial statements. These condensed 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. 3. ACCOUNTS RECEIVAB

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS Management has determined that no warranty reserve is currently necessary on the Company's products. Management will continue to evaluate the need for a warranty reserve throughout the year and make adjustments as needed. 7. NOTES PAYABLE During December 2023, the Company entered into a convertible promissory note in the amount of $ 50,000 due and payable in December 2024 at an annual interest rate of 6.0 %. The note is secured by $ 100,000 of the Company's inventory. Any principal and unpaid accrued interest outstanding as of the due date may be converted to common stock at a value of $ 0.20 per share. During 2005, the Company entered into an agreement with the U.S. Small Business Association. The note is payable in monthly installments of $ 1,820 with the balance due and payable in November 2026, at an interest rate of 2.60 %. 8. STOCKHOLDER LOANS Stockholder loans to the Company, including accrued interest totaled $ 47,244 and $ 147,450 as of January 31, 2024 and 2023, respectively. The loans bear interest between 10 % and 12 %. 9. REVENUES Revenues are measured based on the amount of consideration specified in a contract with a customer. The Company recognizes revenue when and as performance obligations (i.e., obligations to transfer goods and/or services) are satisfied, which generally occurs with the transfer of control of the goods or services to the customer. To determine proper revenue recognition, the Company evaluates whether two or more contracts should be combined and accounted for as a single contract and whether a combined or single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment, and the decision to combine contracts or separate a combined or single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. Contracts are considered to contain a single performance obligat

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS 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. 12. 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 $ 10,899 and $ 15,125 for the three month periods ended January 31, 2024 and 2023, respectively. 13. COMMON STOCK During the three month period ended January 31, 2024, the Company sold 580,888 shares of common stock to eight investors for total proceeds of $ 105,920 and 670,000 shares were issued to two investors for services. The stock was issued between $ 0.18 and $ 0.20 per share. During the three month period ended January 31, 2023, the Company sold 500,000 shares of common stock to one investor for total proceeds of $ 110,000 and issued 27,000 shares to one individuals for services. The stock was issued at $ 0.22 per share. 14. 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

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS 15. LEASE FASB ASC Topic 842, "Leases" , establishes a right of use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the condensed balance sheets. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. ROU assets are reduced each period by an amount equal to the difference between the lease expense and the amount of interest expense on the lease liability, using the effective interest method. The Company used the average commercial real estate interest rate of 5.50 % to calculate the present value of the lease. The Company recognizes lease expense on a straight-line basis over the leased term on the condensed statements of operations. The Company entered into a lease for office space at the time the Company was formed through June 2022. Effective July 2022, the Company is leasing the office space on a month to month basis. As a result, the Company has elected to apply the short-term lease exemption to its lease of the facilities and therefore has not recorded a ROU asset and related lease liability. 16. SEGMENT INFORMATION The Company has organized operations into two segments based on an internal management reporting process that provides segment information for purposes of making financial decisions and allocating resources. The following tables present the Company's business segment information for the nine month period ended January 31, 2024 and 2023: Schedule of business segment information 2024 2023 Revenues: Apparel $ 7,410 $ 25,364 House wrap 58,476 46,283 Total revenues $ 65,886 $ 71,647 Assets: Apparel $ 72,703 $ 75,972 House wrap 1,441,732 1,391,173 Total assets $ 1,514,435 1,467,145 Depreciation: Apparel $ — $ — House wrap 1,165 769 Total depreciation $ 1,165 $ 769 17. LEGAL PROCEEDINGS On November 4, 2016, the Federal Trade Commission ("FTC")

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS 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 U.S. 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 FTC 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 INSULTEX house wrap products. In November 2021, in connection with the FTC litigation, the Company filed an application for attorney fees, expenses and cost in the U.S. District Court for the Western District of Pennsylvania, Case No.2:16-cv-01669-NBF. On June 29, 2022, a settlement order was signed by the Court. Pursuant to the Order, the FTC paid the Company $ 260,000 to resolve all such claims. The parties agreed to waive all rights to appeal or otherwise challenge or contest the validity of the Order. 18. ADOPTED PRONOUNCEMENT The requirements of the following FASB statement were adopted for the Company's condensed

financial statements

financial statements: In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). ASU 2016-13 introduces a new impairment model, the current expected credit loss ("CECL") model. The model applies to most assets that are measured at amortized cost and requires those assets to be presented at the net amount expected to be collected. In addition, credit losses on available-for-sale debt securities are to be recognized through an allowance account. ASU 2016-13 also expands existing disclosure requirements. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, and interim periods therein, and requires retrospective application. The Company adopted the new standard effective November 1, 2023, and there were no material changes to the condensed balance sheets, condensed statements of operations, condensed statements of changes in stockholders' equity, and condensed statements of cash flows as a result of the adoption. 19. SUBSEQUENT EVENTS The Company has evaluated subsequent events in accordance with ASC Topic 855, "Subsequent Events ", through April 26, 2024 which is the date financial statements were available to be issued. The Company identified no material subsequent events that require recognition or additional disclosure in these financial statements. 14 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, 2023.

Forward-Looking Statements

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 variety of reasons, including, among others, our ability to sell out HouseWrap product line, our inability to secure sufficient funding to maintain and/or expand our current level of operations. 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, 2023. 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 s

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