10-Q

A

UNITED STATES

SECURITIES

AND EXCHANGE COMMISSION

WASHINGTON,

D.C. 20549

FORM

10-Q

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

For the quarterly period ended April 30, 2022

OR

☐	TRANSITION<br> 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<br> 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 June 14, 2022, there were 32,475,560 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, 2022

	Part I -- Financial<br> Information	Page<br> No.
Item 1.	Condensed Financial Statements (Unaudited)
	Condensed Balance Sheets as of April 30, 2022 (Unaudited) And October 31, 2021	3
	Condensed Statements of Operations for the Six Month Periods Ended April 30, 2022 and 2021 (Unaudited)	5
	Condensed Statements of Changes in Stockholders’ Equity as of April 30, 2022 (Unaudited) and October 31, 2021	6
	Condensed Statements of Cash Flows for the Six Month Periods Ended April 30, 2022 and 2021 (Unaudited)	7
	Notes to the Condensed Financial Statements	8-13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-16
	Part II -- Other Information
Items 1, 2, 3, 4, 4T and 5.		17-18
Item 6.	Exhibits	19

---

2

---

INNOVATIVE<br> DESIGNS, INC.
CONDENSED<br> BALANCE SHEETS
APRIL<br> 30, 2022 (UNAUDITED) AND OCTOBER 31, 2021
		October<br> 31, 2021
ASSETS
CURRENT<br> ASSETS
Cash	219,767	$	480,451
Accounts<br> receivable - net of allowance for doubtful accounts of 5,860	7,975		1,201
Inventory<br> - net of obsolete inventory reserve of 75,468	562,333		542,588
Current<br> portion of right of use asset	20,762		40,962
Total<br> current assets	810,837		1,065,202
PROPERTY<br> AND EQUIPMENT - NET	6,705		7,450
OTHER<br> ASSETS
Inventory<br> on consignment	1,625		1,625
Deposits<br> on inventory	30,000		—
Advance<br> to employees	8,200		8,200
Deposits<br> on equipment	600,000		600,000
Total<br> other assets	639,825		609,825
TOTAL<br> ASSETS	1,457,367	$	1,682,477

All values are in US Dollars.

The

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

3

INNOVATIVE DESIGNS, INC.
CONDENSED BALANCE SHEETS
APRIL 30, 2022 (UNAUDITED) AND OCTOBER 31, 2021
			October 31, 2021
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	252,441		$	228,667
Current portion of notes payable	18,628			18,628
Current portion of lease liability	20,762			40,962
Accrued interest expense	47,059			43,136
Due to stockholders	175,631			188,632
Accrued expenses	6,934			25,037
Total current liabilities	521,455			545,062
LONG-TERM LIABILITIES
Long-term portion of due to stockholders	66,667			133,332
Long-term portion of notes payable	73,540			71,722
Total long-term liabilities	140,207			205,054
TOTAL LIABILITIES	661,662			750,116
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 34,375,560 and 33,315,560 issued and outstanding	3,454			3,333
Common stock to be issued
Additional paid-in capital	11,310,197			11,039,118
Accumulated deficit	(10,517,946	)		(10,110,090	)
Total stockholders' equity	795,705			932,361
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,457,367		$	1,682,477

All values are in US Dollars.

The

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

4

INNOVATIVE DESIGNS, INC.
CONDENSED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED APRIL 30, 2022 AND 2021 (UNAUDITED)
	Three<br> Months Ended April 30,						Six<br> Months Ended April 30,
	2022			2021			2022			2021
REVENUES<br> - NET	$	37,717		$	25,896		$	100,116		$	65,913
OPERATING EXPENSES:
Cost of sales		21,314			9,006			53,659			27,641
Selling,<br> general and administrative expenses		279,955			127,943			430,574			209,153
Total<br> Operating Expenses		301,269			136,949			484,233			236,794
LOSS<br> FROM OPERATIONS		(263,552	)		(111,053	)		(384,117	)		(170,881	)
OTHER INCOME (EXPENSE)
Miscellaneous<br> income (expense)		—			—			—			28,823
Interest<br> expense		(12,264	)		(12,432	)		(23,740	)		(17,392	)
Total<br> other income (expense)		(12,264	)		(12,432	)		(23,740	)		11,431
NET<br> LOSS	$	(275,816	)	$	(123,485	)	$	(407,857	)	$	(159,450	)
PER SHARE INFORMATION - UNDILUTED
Net<br> Loss Per Common Share	$	(0.008	)	$	(0.004	)	$	(0.012	)	$	(0.005	)
Weighted<br> Average Number of Common Shares Outstanding		33,845,560			31,704,732			33,845,560			31,654,727
PER SHARE INFORMATION - DILUTED
Net<br> Loss Per Common Share	$	(0.008	)	$	(0.004	)	$	(0.012	)	$	(0.005	)
Weighted<br> Average Number of Common Shares Outstanding		34,902,893			32,232,893			34,902,893			32,232,893

The

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

5

INNOVATIVE DESIGNS, INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
THREE AND SIX MONTHS ENDED APRIL 30, 2022 AND 2021 (UNAUDITED)
	Common<br><br> <br>Stock				Common Stock To be		Additional Paid-in		Accumulated
	Shares		Amount		Issued		Capital		Deficit			Total
Balance at October 31, 2021		33,315,560	$	3,333	$	—	$	11,039,118	$	(10,110,090	)	$	932,361
Sale of stock		340,000		34		—		60,966		—			61,000
Shares issued for services		50,000		5				9,995					10,000
Net loss		—		—		—		—		(132,040	)		(132,040	)
Balance at January 31, 2022		33,705,560		3,372		—		11,110,079		(10,242,130	)		871,321
Sale of stock		120,000		12				25,188					25,200
Shares issued for services		700,000		70				174,930					175,000
Net loss		—		—		—		—		(275,816	)		(275,816	)
Balance at April 30, 2022		34,525,560	$	3,454	$	—	$	11,310,197	$	(10,517,946	)	$	795,705
Balance at October 31, 2020		31,211,560	$	3,123	$	—	$	10,574,828	$	(9,730,028	)	$	847,923
Sale of stock		—		—		—		—		—			—
Shares issued for services		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		280,000		28				69,972		—			70,000
Shares issued for services		500,000		50				63,950					64,000
Net loss		—		—		—		—		(123,485	)		(123,485	)
Balance at April 30, 2021		32,091,560	$	3,211	$	—	$	10,733,740	$	(9,889,478	)	$	847,473

The

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

6

INNOVATIVE DESIGNS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 2022 AND 2021 (UNAUDITED)
	Six Months Ended April 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(407,857	)	$	(159,450	)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts		—			—
Common stock issued for services		185,000			89,000
Depreciation		745			16,654
Amortization of right of use asset		20,200			19,122
(Increase) decrease from changes in:
Accounts receivable		(6,774	)		15,134
Inventory		(19,745	)		2,660
Deposits on inventory		(30,000	)		—
Increase (decrease) from changes in:
Accounts payable and accrued expenses		5,672			(60,558	)
Accrued interest expense		3,923			1,270
Net cash used in operating activities		(248,836	)		(76,168	)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities		—			—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock		86,200			70,000
Proceeds from shareholder advances		—			200,000
Payments on shareholder advances		(79,666	)		—
Payments on lease liability		(20,200	)		(19,122	)
Proceeds on notes payable		1,818			—
Payments on notes payable		—			(1,820	)
Net cash provided by financing activities		(11,848	)		249,058
Net change in cash		(260,684	)		172,890
CASH, BEGINNING OF YEAR		480,451			48,009
CASH, END OF THE PERIOD	$	219,767		$	220,899
Supplemental disclosure of cash flow information:
Cash paid for interest	$	19,817		$	14,300
Cash paid for taxes	$	—		$	—

The

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

7

---

INNOVATIVE DESIGNS, INC.

---

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and Six Month Periods Ended April 30,2022 and 2021 (Unaudited)

NOTE<br> 1.	BASIS<br> 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, 2022, the changes therein for the three and six month periods then ended and the results of operations for the three and six month periods ended April 30, 2022 and 2021.

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, 2021. The results of operations for the three and six month periods ended April 30, 2022 and 2021 are not necessarily indicative of operating results for the full year.

NOTE<br> 2.	RIGHT<br> 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<br> 3.	GOING<br> 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 ($407,857) and a negative cash flow from operations of ($248,836) for the six month period ended April 30, 2022. In addition, the Company has an accumulated deficit of ($10,517,946). 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<br> 4.	ACCOUNTS<br> 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, 2022 and October 31, 2021. Management has applied an allowance on all balances in excess of 90 days.

8

INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and Six Month Periods Ended April 30,2022 and 2021 (Unaudited)

NOTE<br> 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 manufacturing of its Artic Armor, hunting and swimming line of apparel. The Company has booked a reserve against apparel inventory at April 30, 2022 and October 31, 2021 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<br> 6.	EARNINGS<br> 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, the Company only has common stock outstanding. In 2021, the Company issued a convertible debt instrument. In addition, the Company also has stock warrants of 994,000 and 620,000 as of April 30, 2022 and 2021, respectively. The Company has calculated diluted earnings per share utilizing the outstanding stock warrants and convertible debt.

NOTE<br> 7.	INCOME<br> 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 $13,390 and $6,300 for the six month periods ended April 30, 2022 and 2021, respectively.

9

INNOVATIVE DESIGNS, INC.

---

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and Six Month Periods Ended April 30,2022 and 2021 (Unaudited)

NOTE<br> 9.	COMMON<br> STOCK

During the six month period ended April 30,

2022, the Company sold 460,000 shares of common stock to seven investors for total proceeds of $86,200 and issued 750,000 shares to eight individuals for services. The stock was issued between $0.17 and $0.25 per share.

During the six month period ended April 30,

2021, the Company sold 280,000 shares of common stock to six investors for total proceeds of $70,000 and issued 600,000 to eight individuals for services. The stock was issued between $0.12 and $0.25 per share.

NOTE<br> 10.	DEPOSITS<br> 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. 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.

NOTE<br> 11.	RIGHT<br> 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, 2020.

10

INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and Six Month Periods Ended April 30,2022 and 2021 (Unaudited)

NOTE<br> 11.	RIGHT<br> OF USE ASSETS (CONTINUED)

As of April 30, 2022, 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
Amortization of right of use asset – operating lease		(129,734	)
Total right of use asset – operating lease as of April 30, 2022	$	20,762
Less current portion due within one year		20,762
Long-term right of use asset – operating lease	$	-0-

Total amortization expense related to the

right of use assets under the verbal lease agreement was $20,200 and $19,122 for the six month periods ended April 30, 2022 and 2021, respectively.

Future amortization of the right of use asset as of April 30, 2022 is as follows:

Future amortization of right of use assets
2022	$	20,762
NOTE<br> 12.	RIGHT<br> 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, 2022 that is classified as a right of use asset and lease liability.

As of April 30, 2022, 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	$	150,496
Principal payments made as of the period ended   April 30, 2022		(129,734	)
Total operating lease liability as of April 30, 2022		20,762
Less current portion due within one year		20,762
Long-term operating lease liability	$	-0-

11

INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and Six Month Periods Ended April 30,2022 and 2021 (Unaudited)

Total maturities of lease liability as of April 30, 2022 are as follows:

Schedule of maturities of lease liabilities
		Total future minimum lease payments		Present value discount		Operating lease liability
	2022	$	21,000	$	238	$	20,762
NOTE<br> 13.	SEGMENT<br> INFORMATION
---	---

We have organized our operations into 2 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 six month periods ended April 30, 2022 and 2021:

Schedule of business segment information
	2022		2021
Revenues:
Apparel	$	52,685	$	49,163
House Wrap		47,431		16,750
Total Revenues	$	100,116	$	65,913
Assets:
Apparel	$	109,614	$	135,860
House Wrap		1,347,753		1,446,973
Total	$	1,457,367	$	1,576,093
Depreciation:
Apparel	$	-0-	$	4,744
House Wrap		745		11,910
Total	$	745	$	16,654

12

INNOVATIVE DESIGNS, INC.

---

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three and Six Month Periods Ended April 30,2022 and 2021 (Unaudited)

NOTE<br> 14.	LEGAL<br> 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.

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. The Company is seeking from the FTC all attorney’s fees, expenses and costs the Company incurred and/or will incur in connection with the litigation. The matter was moved to mediation and the parties are working on a proposed resolution.

NOTE<br> 15.	SUBSEQUENT<br> EVENTS

The Company has evaluated subsequent events in accordance with ASC Topic 855, “Subsequent Events”, through June 20, 2022, 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.

13

INNOVATIVE DESIGNS, INC.

ITEM 2.	MANAGEMENT’S DISCUSSION<br> 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, 2021.

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, 2021. 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,<br> design and prototypes of our products,
●	Obtaining retail stores<br> or sales agents to offer and sell our products,
●	Developing our website<br> to sell more of our products.

14

Results of Operations

Comparison of the Three Month Period Ended April 30, 2022 with the Three Month Period Ended April 30, 2021.

The following table shows a comparison of the results of operations between the three month periods ended April 30, 2022 and April 30, 2022:

	Three Month Period Ended						Three Month Period Ended
	April 30,<br> 2022			% of<br> Sales			April 30,<br> 2021			% of<br> Sales			Increase<br> (Decrease)			% Change
REVENUE - NET	$	37,717			100	%	$	25,896			100	%	$	11,821			46	%
OPERATING EXPENSES
Cost of sales		21,314			57	%		9,006			35	%		12,308			137	%
Selling, general and administrative expenses		279,582			741	%		119,616			462	%		159,966			134	%
		300,896			798	%		128,622			497	%		172,274			134	%
Loss from operations		(263,179	)		-698	%		(102,726	)		-397	%		(160,453	)		156	%
Other income (expense)		—			0	%		—			0	%		—			0	%
Other Expense
Interest expense		(12,264	)		-33	%		(12,432	)		-48	%		168			-1	%
Depreciation expense		(373	)		-1	%		(8,327	)		-32	%		7,954			-96	%
Net Loss	$	(275,816	)		-731	%	$	(123,485	)		-477	%	$	(152,331	)		123	%

Revenues for the three month period ended April 30, 2022, were $37,717 compared to revenues of $25,896 for the three month period ended April 30, 2021. The increase in revenue is attributable to an increase in sales of House Wrap of $30,309. 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 (“SG&A”) were $279,582 for the three months ended April 30, 2022, compared to $119,616 for the three month period ended April 30, 2021. Professional fees for the period ended April 30, 2022, were $36,595 compared to $28,942 for the three month period ended April 30, 2021. Loan repayments were $86,666 for the period and was paid on one loan in accordance with its terms. For the comparable period ended April 30, 2021, loan repayments totaled $10,120. Stock for services costs for the period were $75,000.

15

INNOVATIVE DESIGNS, INC.

Results of Operations

Comparison of the Six Month Period Ended April 30, 2022 with the Six Month Period Ended April 30, 2021.

	Six Month Period Ended						Six Month Period Ended
	April 30, <br>2022			% of <br>Sales			April 30, <br>2021			% of <br>Sales			Increase (Decrease)			% Change
REVENUE - NET	$	100,116			100	%	$	65,913			100	%	$	34,203			52	%
OPERATING EXPENSES
Cost of sales		53,659			54	%		27,641			42	%		26,018			94	%
Selling, general and administrative expenses		429,829			429	%		192,499			292	%		237,330			123	%
		483,488			483	%		220,140			334	%		263,348			120	%
Loss from operations		(383,372	)		-383	%		(154,227	)		-234	%		(229,145	)		149	%
Other income (expense)		—			0	%		28,823			44	%		(28,823	)		0	%
Other Expense
Interest expense		(23,740	)		-24	%		(17,392	)		-26	%		(6,348	)		36	%
Depreciation expense		(745	)		-1	%		(16,654	)		-25	%		15,909			-96	%
Net Loss	$	(407,857	)		-407	%	$	(159,450	)		-242	%	$	(248,407	)		156	%

Revenues for the six month period ended April 30, 2022, were $100,116 compared to revenues of $65,913 for the six month period ended April 30, 2021. The increase in revenue is attributable an increase in our House Wrap products revenue, $47,431 for the period compared to $16,750 for the six month period ended April 30, 2021. See Note 13 of the Notes to the Condensed Financial Statements appearing elsewhere in this Report for a description of our segment products sales.

Revenues for the first part of the third quarter of 2022, are approximately 275% higher than revenues for the second quarter. We expect revenues to continue to increase primarily from sales of our House Wrap product line as we increase our distribution network, get repeat orders from existing distributors and customers and increased sales to contractors and builders.

SG&A expenses were $429,829 for the six month period ended April 30, 2021, compared to $192,499 for the six month period ended April 30, 2021. Professional fees for the six month period ended April 30, 2022, were $40,610 compared to $28,942 for the six month period ended April 30, 2021. Part of our professional fees related to marketing services totaling $12,000. Legal fees for the period totaled $10, 000. Stock for services cost for the six month period were $165,100.

16

INNOVATIVE DESIGNS, INC.

Liquidity and Capital Resources

During the three month period ended April 30, 2022, we funded our operations from revenues from sales and the sale of our stock. We raised $60,000 through the sale of our Common Stock and received $10,200 from the exercise of certain common stock purchase warrants.

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.

We must purchase new quality control testing equipment for our products. The vendor is currently working on the project. We have estimated a cost of approximately $100,000.

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<br> PROCEEDING

See Note 14 of the Notes to the Condensed Financial Statements appearing elsewhere in this Report.

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.

17

INNOVATIVE DESIGNS, INC.

ITEM 2.	UNREGISTERED<br> 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, and the following transactions.

On February 11, 2022, we issued 60,000 shares of our Common Stock upon the exercise of 60,000 common stock purchase warrants and received $10,200 in proceeds.

On March 15, 2022, we sold 60,000 shares of our Common stock to one entity and received $15,000 in proceeds

On March 17, 2022, we issued 200,000 shares of our Common stock to a consultant for services valued at $50,000.

We relied on Section 4(2) of the Securities Act of 1933, as amended and Regulation D, Rule 506 (c)) promulgated thereunder.

ITEM 3.	Defaults<br> upon Senior Securities

None

Item 4	Mine Safety Disclosures

Not applicable

ITEM 4T.	CONTROLS<br> AND PROCEDURES

Management has developed and implemented a policy and procedures for reviewing, on a quarterly basis, our disclosure controls and procedures. During the period ended April 30, 2022, 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
---

18

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<br> 10-K filed February 12, 2015
**	Incorporated by reference to the Company’s registration<br> 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

19

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<br> Designs, Inc.
		Registrant
Date: June 17, 2022	by:	/s/ Joseph Riccelli
		Joseph Riccelli, Chief Executive Officer
		and Chief Financial Officer

20

EXHIBIT 31.1

INNOVATIVEDESIGNS, 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<br> controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material<br> information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,<br> particularly during the period in which this quarterly report is being prepared;
(b)	Designed such internal<br> control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to<br> provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external<br> purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness<br> of the registrant’s disclosure controls and procedures and presented in this quarterly report my conclusions about the effectiveness<br> 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<br> any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent<br> fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control<br> 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<br> and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely<br> affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not<br> material, that involves management or other employees who have a significant role in the registrant’s internal control over<br> financial reporting.
Date: June 17, 2022	by:	/s/<br> Joseph Riccelli
---	---	---
	Joseph Riccelli
	Chief Executive Officer

EXHIBIT 31.2

INNOVATIVEDESIGNS, 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<br> controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material<br> information relating to registrant, including its consolidated subsidiaries, is made known to me by others within those entities,<br> particularly during the period in which this annual report is being prepared;
(b)	Designed such internal<br> control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to<br> provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external<br> purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness<br> of the registrant’s disclosure controls and procedures and presented in this annual report my conclusions about the effectiveness<br> 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<br> any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent<br> fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control<br> 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<br> and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely<br> affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not<br> material, that involves management or other employees who have a significant role in the registrant’s internal control over<br> financial reporting.
Date: June 17, 2022	by:	/s/ Joseph Riccelli
---	---	---
		Joseph Riccelli
		Chief Financial Officer, Principal Accounting Officer

EXHIBIT 32.1

SECTION 906CERTIFICATION

CERTIFICATIONREQUIRED BY

18 U.S.C. SECTION1350,

AS ADOPTEDPURSUANT TO SECTION 906 OF THE

SARBANES-OXLEYACT OF 2002

In connection with the quarterly report of Innovative Designs, Inc. (the “Company”) on Form 10-Q for the quarterly period ended April 30, 2022, 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<br> with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained<br> in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: June 17, 2022	by:	/s/ Joseph Riccelli
---	---	---
		Joseph Riccelli
		Chief Executive Officer

EXHIBIT 32.2

SECTION 906CERTIFICATION

CERTIFICATIONREQUIRED BY

18 U.S.C. SECTION1350,

AS ADOPTEDPURSUANT TO SECTION 906 OF THE

SARBANES-OXLEYACT OF 2002

In connection with the quarterly report of Innovative Designs, Inc. (the “Company”) on Form 10-Q for the quarterly period ended April 30, 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<br> with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained<br> in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date:	June 17, 2022	by:	/s/<br> Joseph Riccelli
---	---	---	---
		Joseph Riccelli
		Chief Executive Officer, Chief
		Financial Officer, Principal
		Accounting Officer