10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended April 30, 2018

OR

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

For the transition period from _______ to ________.

Commission File Number: 000-51791

INNOVATIVE DESIGNS, INC.

(Exact Name of Registrant as Specified in its Charter)

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

124 Cherry Street

 Pittsburgh, Pennsylvania 15223

(Address of Principal Executive Offices, Zip Code)

(412) 799-0350

(Issuer’s Phone Number Including Area Code)

N/A

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

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

YES ☒      NO ☐

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

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

(Check One)

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

(Do not check if a smaller reporting company)

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

As of June 6, 2018, there were 27,234,560 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, 2018

Part I -- Financial Information		Page No.
Item 1.	Condensed Financial Statements (Unaudited)
	Condensed Balance Sheets as of April 30, 2018 (Unaudited) and October 31, 2017	1
	Condensed Statements of Operations for the Three And Six Month Periods Ended April 30, 2018 and 2017 (Unaudited)	2
	Condensed Statements of Changes in Stockholders’ Equity as of April 30, 2018 (Unaudited) and October 31, 2017	3
	Condensed Statements of Cash Flows for the Six Month Periods Ended April 30, 2018 and 2017 (Unaudited)	4
	Notes to the Condensed Financial Statements	5 - 8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9 - 12
Part II -- Other Information
Items 1, 2, 3, and 4T.		13 - 14
Item 6.	Exhibits	15 - 17

ITEM 1. CONDENSED FINANCIAL STATEMENTS

INNOVATIVE DESIGNS, INC.

CONDENSED BALANCE SHEETS

April 30, 2018 (Unaudited) and October 31, 2017

ASSETS
	2018			2017
CURRENT ASSETS
Cash	$	140,066		$	214,871
Accounts receivable - net of allowance for doubtful accounts of $8,026 and $0 as of April 30, 2018 and October 31, 2017, respectively		—			23,805
Inventory - net of obsolete inventory reserve of $51,000		797,223			729,845
Inventory on consignment		1,625			1,625
Deposits on inventory		57,330			70,000
Prepaid expenses		14,971			14,653
Total current assets		1,011,215			1,054,799
PROPERTY AND EQUIPMENT - NET		147,364			160,862
OTHER ASSETS
Advance to employees		8,200			4,000
Deposits on equipment		617,000			617,000
Total other assets		625,200			621,000
TOTAL ASSETS	$	1,783,779		$	1,836,661
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	168,273		$	129,278
Current portion of notes payable		18,096			18,096
Accrued interest expense		45,039			44,184
Due to shareholders		98,850			118,500
Accrued expenses		19,190			25,102
Total current liabilities		349,448			335,160
Long-term portion of notes payable		109,904			119,262
TOTAL LIABILITIES		459,352			454,422
STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value, 100,000,000 shares authorized, and 27,204,560 and 26,392,310 issued and outstanding as of April 30, 2018 and October 31, 2017		2,720			2,639
Additional paid-in capital		9,971,791			9,725,412
Accumulated deficit		(8,650,084	)		(8,345,812	)
Total stockholders’ equity		1,324,427			1,382,239
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,783,779		$	1,836,661

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

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INNOVATIVE DESIGNS, INC.

CONDENSED STATEMENTS OF OPERATIONS 

Three and Six Month Periods Ended April 30, 2018 and 2017 (Unaudited)

	Three Month Periods Ended April 30,						Six Month Periods Ended April 30,
	2018			2017			2018			2017
REVENUES - NET	$	17,163		$	39,162		$	133,366		$	208,372
OPERATING EXPENSES:
Cost of sales		18,080			25,568			82,462			106,074
Selling, general and administrative expenses		154,888			170,741			345,699			378,212
		172,968			196,309			428,161			484,286
LOSS FROM OPERATIONS		(155,805	)		(157,147	)		(294,795	)		(275,914	)
OTHER EXPENSE
Miscellaneous expense		487			—			1,034			3,424
Interest expense		1,731			3,604			8,443			10,653
Total other expense		2,218			3,604			9,477			14,077
NET LOSS	$	(158,023	)	$	(160,751	)	$	(304,272	)	$	(289,991	)
PER SHARE INFORMATION
Net Loss Per Common Share	$	(0.006	)	$	(0.006	)	$	(0.011	)	$	(0.011	)
Weighted Average Number of Common Shares Outstanding		27,033,872			25,396,265			26,880,559			25,383,288

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

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INNOVATIVE DESIGNS, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY 

April 30, 2018 (Unaudited) and October 31, 2017

	Common Stock Number of Shares		Common Stock Amount		Additional Paid-in Capital		Accumulated Deficit			Total
Balance at October 31, 2016		25,370,310	$	2,537	$	9,455,674	$	(7,712,757	)	$	1,745,454
Shares issued for services		300,000		30		97,670		—			97,700
Sale of stock		722,000		72		172,068		—			172,140
Net loss		—		—		—		(633,055	)		(633,055	)
Balance at October 31, 2017		26,392,310		2,639		9,725,412		(8,345,812	)		1,382,239
Shares issued for services		105,000		10		29,890		—			29,900
Sale of stock		707,250		71		216,489		—			216,560
Net loss		—		—		—		(304,272	)		(304,272	)
Balance at April 30, 2018		27,204,560	$	2,720	$	9,971,791	$	(8,650,084	)	$	1,324,427

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

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INNOVATIVE DESIGNS, INC.

CONDENSED STATEMENTS OF CASH FLOWS 

Six Month Periods Ended April 30, 2018 and 2017 (Unaudited)

	For the Six Month Periods Ended
	April 30, 2018			April 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(304,272	)	$	(289,991	)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts		8,026			—
Common stock issued for services		29,900			7,500
Depreciation		17,756			15,293
(Increase) decrease from changes in:
Accounts receivable		15,779			39,467
Inventory		(67,378	)		112,778
Deposits on inventory		12,670			—
Prepaid expenses		(318	)		(3,584	)
Advance to employees		(4,200	)		—
Increase (decrease) from changes in:
Accounts payable		38,995			37,818
Accrued interest expense		855			2,600
Accrued expenses		(5,912	)		(27,790	)
Net cash used in operating activities		(258,099	)		(105,909	)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(4,258	)		(10,000	)
Net cash used in investing activities		(4,258	)		(10,000	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock		216,560			—
Payments on shareholder advances		(19,650	)		(26,900	)
Payments on notes payable		(9,358	)		(17,123	)
Net cash provided by (used in) financing activities		187,552			(44,023	)
Net decrease in cash		(74,805	)		(159,932	)
CASH, BEGINNING OF YEAR		214,871			502,777
CASH, END OF THE PERIOD	$	140,066		$	342,845
Supplemental disclosure of cash flow information:
Cash paid for interest	$	7,588		$	8,053

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

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three Month and Six Month Periods Ended April 30, 2018 and 2017 (Unaudited)

NOTE 1. 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, 2018, 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, 2018 and 2017.

NOTE 2. 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, 2017. The results of operations for the three and six month periods ended April 30, 2018 and 2017 are not necessarily indicative of operating results for the full year.

NOTE 3. ACCOUNTS RECEIVABLE

Management evaluates its receivables on a quarterly basis to assess the validity of remaining receivables. During the quarter ended April 30, 2018 management has determined that there is significant doubt regarding the remaining receivable balance of $8,026 and as such applied a 100 percent allowance on the receivable balance. No allowance was deemed necessary for the fiscal year ended October 31, 2017.

NOTE 4. 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. Innovative Designs, Inc. (the “Company”) has decided to discontinue the selling of its hunting and swimming line of apparel. The Company has booked a reserve against this inventory at April 30, 2018 and October 31, 2017 of $51,000. Management will continue to evaluate its obsolete inventory reserve throughout the year and make adjustments as needed.

NOTE 5. 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, the Company only has common stock outstanding. As a result, diluted earnings per share was not calculated.

NOTE 6. INCOME TAXES

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

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

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three Month and Six Month Periods Ended April 30, 2018 and 2017 (Unaudited)

NOTE 7. 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 $9,000 and $11,000 for the six month periods ended April 30, 2018 and 2017, respectively.

NOTE 8. COMMON STOCK

During the six-month period ended April 30, 2018, the Company sold 707,250 shares of common stock to three investors for total proceeds of $216,560. The stock was issued for prices from $0.25 - $0.32 per share. In addition, the Company issued 105,000 shares to two individuals for services performed during the period. The shares issued were valued at $0.18 and $0.40 per share for a total price of $29,900. We believe that Section 4(2) of the Securities Act of 1933, as amended, was available because these transactions did not involve a public offering and there was no general solicitation or general advertising involved in these transactions. We placed legends on the stock certificates stating that the securities were not registered under the Securities Act and set forth the restrictions on their transferability and sale.

During the six-month period ended April 30, 2017, the Company issued 30,000 shares to one director for services performed during the period. The shares issued were valued at $0.25 per share for a price of $7,500. We believe that Section 4(2) of the Securities Act of 1933, as amended, was available because these transactions did not involve a public offering and there was no general solicitation or general advertising involved in these transactions. We placed legends on the stock certificates stating that the securities were not registered under the Securities Act and set forth the restrictions on their transferability and sale.

NOTE 9. 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, 2018, 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.

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three Month and Six Month Periods Ended April 30, 2018 and 2017 (Unaudited)

NOTE 10. SEGMENT INFORMATION

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

The following tables present our business segment information for the six month period ended April 30, 2018 and 2017:

	2018		2017
Revenues:
Apparel	$	96,172	$	157,861
House Wrap		37,194		50,511
Total Revenues	$	133,366	$	208,372
Assets:
Apparel	$	556,343	$	776,593
House Wrap		1,227,436		1,238,063
Total	$	1,783,779	$	2,014,656
Capital Expenditures:
Apparel	$	4,258	$	—
Housewrap		—	$	10,000
Total	$	4,258	$	10,000
Depreciation:
Apparel	$	6,039	$	1,640
House Wrap		11,717		13,653
Total	$	17,756	$	15,293

NOTE 11. LEGAL PROCEEDINGS

On November 4, 2016, the Federal Trade Commission (FTC) filed a complaint against the Company in the U.S. District Court Western District of Pennsylvania, number 16-1669. In the complaint, the FTC alleges, that, among other matters, the Company does 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 redress of rescission of revenue the Company received from the sale of House Wrap and a permanent injunction. The parties are currently in the expert discovery phase. Expert depositions were completed in June 2018.

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INNOVATIVE DESIGNS, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Three Month and Six Month Periods Ended April 30, 2018 and 2017 (Unaudited)

The Company strongly denies the allegation and intends to vigorously defend itself. It is the Company’s belief that the complaint is based on improper testing of the INSULTEX products using the wrong type of testing equipment.

NOTE 12. SUBSEQUENT EVENTS

The Company has evaluated subsequent events in accordance with ASC Topic 855, “Subsequent Events”, through June 12, 2018, which is the date financial statements were available to be issued. The Company identified the below subsequent events.

In May 2018, the Company sold 25,000 shares to an individual for $5,000. The shares were valued at $0.20 per share. The Company issued 5,000 shares to one individual for services valued at $1,000.

In May 2018, the Company entered into a loan agreement with an individual for $50,000. The loan and $5,000 in interest will be paid on or before June 1, 2019. The individual can convert all principal and interest to shares of Company stock at $0.20 per share.

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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, 2017.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities 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, an adverse outcome in our legal matter with the Federal Trade Commission, competition in our cold weather markets, 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, 2017. 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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INNOVATIVE DESIGNS, INC.

Results of Operations

Comparison of the Three Month Period Ended April 30, 2018 with the Three Month Period Ended April 30, 2017.

	Three Month Period Ended April 30, 2018			% of Sales			Three Month Period Ended April 30, 2017			% of Sales			Increase (Decrease)			% Change
REVENUE - NET	$	17,163			100.00	%	$	39,162			100.00	%	$	(21,999	)		-56.17	%
OPERATING EXPENSES
Cost of sales		18,080			105.34	%		25,568			65.29	%		(7,488	)		-29.29	%
Selling, general and administrative expenses		154,888			902.45	%		170,741			435.99	%		(15,853	)		-9.28	%
Loss from operations		(155,805	)		-907.80	%		(157,147	)		-401.27	%		1,342			-0.85	%
OTHER EXPENSE
Miscellaneous expense		487			2.84	%		—			0.00	%		487
Interest expense		1,731			10.09	%		3,604			9.20	%		(1,873	)		-51.97	%
Total other expense		2,218			12.92	%		3,604			9.20	%		(1,386	)		-38.46	%
Net loss	$	(158,023	)		-920.72	%	$	(160,751	)		-410.48	%	$	(531	)		0.33	%

Revenues for the three month period ended April 30, 2018 were $17,163 compared to revenues of $39,162 for the three month period ended April 30, 2017. The decrease in revenue is attributable to the FTC matter with regard to our House Wrap products as we no longer advertise the insulating quality of these products. The decrease in revenue for our apparel products is attributable, in part, to the fact that we are devoting significant portion of our limited resources to the FTC matter and the fact that this period is normally a slow period for apparel sales on account of the season. See Note 10 of the Notes to the Condensed Financial Statements appearing elsewhere in this Report for a description of our segment products sales. Our net loss for the three month period ended April 30, 2018 was ($158,023).

Our selling, general and administrative expenses were $154,888 for the three month period ended April 30, 2018 compared to $170,741 for the three month period ended April 30, 2017. Professional fees for the period ended April 30, 2018 were $32,099 compared to $84,894 for the three month period ended April 30, 2017. The majority of our professional fees relate to the legal fees incurred in connection to the FTC matter. We expect our professional fees to continue to be substantial during the course of this legal matter.

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INNOVATIVE DESIGNS, INC.

Comparison of the Six Month Period Ended April 30, 2018 with the Six Month Period Ended April 30, 2017.

The following table shows a comparison of the results of operations between the six-month periods ended April 30, 2018 and April 30, 2017:

	Six Month Period Ended April 30, 2018			% of Sales			Six Month Period Ended April 30, 2017			% of Sales			Increase (Decrease)			% Change
REVENUE - NET	$	133,366			100.00	%	$	208,372			100.00	%	$	(75,006	)		-36.00	%
OPERATING EXPENSES
Cost of sales		82,462			61.83	%		106,074			50.91	%		(23,612	)		-22.26	%
Selling, general and administrative expenses		345,699			259.21	%		378,212			181.51	%		(32,513	)		-8.60	%
Loss from operations		(294,795	)		-221.04	%		(275,914	)		-132.41	%		(18,881	)		6.84	%
OTHER EXPENSE
Miscellaneous expense		1,034			0.78	%		3,424			1.64	%		(2,390	)		-69.80	%
Interest expense		8,443			6.33	%		10,653			5.11	%		(2,210	)		-20.75	%
Net loss	$	(304,272	)		-228.15	%	$	(289,991	)		-139.17	%	$	(14,281	)		4.92	%

Revenues for the six month period ended April 30, 2018 were $133,366 compared to revenues of $208,372 for the six month period ended April 30, 2017. The decrease is caused, by the decrease in our apparel sales and the sales in our House Wrap product line. The apparel sales were adversely affected by warm weather. In December 2016, we voluntarily ceased advertising our House Wrap products as a result of the legal action brought by the Federal Trade Commission (“FTC”). See Note 9 of the Notes to the Condensed Financial Statements appearing elsewhere in this Report for a description of our segment product sales. During the six month period ended April 30, 2018 House Wrap sales totaled $37,194 in comparison with $50,511 during the six month period ended April 30, 2017. Our net loss for the six month period ended April 30, 2018 was ($304,272).

Our selling, general and administrative expenses were $345,699 for the six months ended April 30, 2018 compared to $378,212 for the six month period ended April 30, 2017. The decrease was a result, in part, by lower seasonal help expense and less advertising and promotional expense and a significant decrease in professional fees. We do not expect our seasonal help expense or advertising and promotional expenses to increase in the current fiscal year ending October 31, 2018.

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INNOVATIVE DESIGNS, INC.

Liquidity and Capital Resources

During the period ended April 30, 2018, we funded our operations from revenues from sales and sale of our common stock. During the three month period ended April 30, 2018 we sold our common stock in private transactions and raised $105,000 from the sales.

Subsequent to the period, in May we sold our common stock in a private transaction and raised $5,000. Also, in May we entered into a loan agreement for $50,000. See Note 12 of the Notes to the Financials Statements appearing elsewhere in this Report. 

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. The Company has not made an estimate of the cost required for bringing the operation of the machine into compliance with the environmental regulations but it is considered to be a substantial amount. We are in the permitting stage relating to environmental issues necessary to begin the installation of the equipment. However, given our current limited financial resources we are not devoting the resources needed to complete the permitting process. 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 9 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.

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INNOVATIVE DESIGNS, INC.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDING

The Company is engaged in a matter with the Federal Trade Commission. A Form 8-K filed November 4, 2016, describing this matter is incorporated herein by reference.

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

During the six-month period ended April 30, 2018, the Company sold 707,250 shares of common stock to three investors for total proceeds of $216,560. The stock was issued for prices from $0.25 - $0.32 per share. In addition, the Company issued 105,000 shares to two individuals for services performed during the period. The shares issued were valued at $0.18 and $0.40 per share for a total price of $29,900. We believe that Section 4(2) of the Securities Act of 1933, as amended, was available because these transactions did not involve a public offering and there was no general solicitation or general advertising involved in these transactions. We placed legends on the stock certificates stating that the securities were not registered under the Securities Act and set forth the restrictions on their transferability and sale.

In May 2018, the Company sold 25,000 shares to an individual for $5,000. The shares were valued at $0.20 per share. The Company issued 5,000 shares to one individual for services valued at $1,000. We believe that Section 4(2) of the Securities Act of 1933, as amended, was available because these transactions did not involve a public offering and there was no general solicitation or general advertising involved in these transactions. We placed legends on the stock certificates stating that the securities were not registered under the Securities Act and set forth the restrictions on their transferability and sale.

ITEM 3. QUANTITATATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information otherwise required by this Item.

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 period ended April 30, 2018, 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. During the first and second quarters of 2018, the Company was not able to close the books and records in a timely fashion. Consequently, the Company was unable to file its Form 10-Q for the period ended January 31, 2018 and April 30, 2018 within the timeline established by the SEC and was required to seek an extension for filing the form.

Changes in Internal Control Over Financial Reporting

- 13 -

INNOVATIVE DESIGNS, INC.

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.

- 14 -

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 and Chief Financial Officer

32.1 Section 1350 Certification of Chief Executive Officer and Chief Financial 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: June 12, 2018	by:	/s/ Joseph Riccelli
		Joseph Riccelli, Chief Executive Officer and Chief Financial Officer

- 15 -

EX-31.1

EXHIBIT 31.1

INNOVATIVE DESIGNS, INC. 

CERTIFICATIONS

I, Joseph Riccelli, certify that:

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

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

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

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

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 12, 2018	by:	/s/ Joseph Riccelli
		Joseph Riccelli Chief Executive Officer

- 16 -

EX-32.1

EXHIBIT 32.1

SECTION 906 CERTIFICATION

CERTIFICATION REQUIRED BY

18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Innovative Designs, Inc. (the “Company”) on Form 10-Q for the quarterly period ended April 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 12, 2018	by:	/s/ Joseph Riccelli
		Joseph Riccelli Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Director

- 17 -

XML

Document and Entity Information - shares	6 Months Ended
	Apr. 30, 2018	Jun. 06, 2018
Document And Entity Information
Entity Registrant Name	INNOVATIVE DESIGNS INC
Entity Central Index Key	0001190370
Document Type	10-Q
Trading Symbol	IVDN
Document Period End Date	Apr. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		27,234,560
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018

XML

CONDENSED BALANCE SHEETS (Unaudited) - USD ($)	Apr. 30, 2018	Oct. 31, 2017
CURRENT ASSETS
Cash	$ 140,066	$ 214,871
Accounts receivable - net of allowance for doubtful accounts of $8,026 and $0 as of April 30, 2018 and October 31, 2017, respectively		23,805
Inventory - net of obsolete inventory reserve of $51,000	797,223	729,845
Inventory on consignment	1,625	1,625
Deposits on inventory	57,330	70,000
Prepaid expenses	14,971	14,653
Total current assets	1,011,215	1,054,799
PROPERTY AND EQUIPMENT - NET	147,364	160,862
OTHER ASSETS
Advance to employees	8,200	4,000
Deposits on equipment	617,000	617,000
Total other assets	625,200	621,000
TOTAL ASSETS	1,783,779	1,836,661
CURRENT LIABILITIES
Accounts payable	168,273	129,278
Current portion of notes payable	18,096	18,096
Accrued interest expense	45,039	44,184
Due to shareholders	98,850	118,500
Accrued expenses	19,190	25,102
Total current liabilities	349,448	335,160
Long-term portion of notes payable	109,904	119,262
TOTAL LIABILITIES	459,352	454,422
STOCKHOLDERS' EQUITY
Common stock, $0.0001 par value, 100,000,000 shares authorized, and 27,204,560 and 26,392,310 issued and outstanding as of April 30, 2018 and October 31, 2017	2,720	2,639
Additional paid-in capital	9,971,791	9,725,412
Accumulated deficit	(8,650,084)	(8,345,812)
Total stockholders' equity	1,324,427	1,382,239
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,783,779	$ 1,836,661

XML

CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Apr. 30, 2018	Oct. 31, 2017
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 8,026	$ 0
Inventory obsolete reserve	$ 51,000	$ 51,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized	100,000,000	100,000,000
Common stock, issued	27,204,560	26,392,310
Common stock, outstanding	27,204,560	26,392,310

XML

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017	Apr. 30, 2018	Apr. 30, 2017
Income Statement [Abstract]
REVENUES - NET	$ 17,163	$ 39,162	$ 133,366	$ 208,372
OPERATING EXPENSES:
Cost of sales	18,080	25,568	82,462	106,074
Selling, general and administrative expenses	154,888	170,741	345,699	378,212
Total Operating Expenses	172,968	196,309	428,161	484,286
LOSS FROM OPERATIONS	(155,805)	(157,147)	(294,795)	(275,914)
OTHER EXPENSE
Miscellaneous expense	487		1,034	3,424
Interest expense	1,731	3,604	8,443	10,653
Total other expense	2,218	3,604	9,477	14,077
NET LOSS	$ (158,023)	$ (160,751)	$ (304,272)	$ (289,991)
PER SHARE INFORMATION
Net Loss Per Common Share (in dollars per share)	$ (0.006)	$ (0.006)	$ (0.011)	$ (0.011)
Weighted Average Number of Common Shares Outstanding (in shares)	27,033,872	25,396,265	26,880,559	25,383,288

XML

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance at beginning at Oct. 31, 2016	$ 2,537	$ 9,455,674	$ (7,712,757)	$ 1,745,454
Balance at beginning (in shares) at Oct. 31, 2016	25,370,310
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued for services	$ 30	97,670		97,700
Shares issued for services (in shares)	300,000
Sale of stock	$ 72	172,068		172,140
Sale of stock (in shares)	722,000
Net loss			(633,055)	(633,055)
Balance at end at Oct. 31, 2017	$ 2,639	9,725,412	(8,345,812)	1,382,239
Balance at end (in shares) at Oct. 31, 2017	26,392,310
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued for services	$ 10	29,890		29,900
Shares issued for services (in shares)	105,000
Sale of stock	$ 71	216,489		216,560
Sale of stock (in shares)	707,250
Net loss			(304,272)	(304,272)
Balance at end at Apr. 30, 2018	$ 2,720	$ 9,971,791	$ (8,650,084)	$ 1,324,427
Balance at end (in shares) at Apr. 30, 2018	27,204,560

XML

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (304,272)	$ (289,991)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts	8,026
Common stock issued for services	29,900	7,500
Depreciation	17,756	15,293
(Increase) decrease from changes in:
Accounts receivable	15,779	39,467
Inventory	(67,378)	112,778
Deposits on inventory	12,670
Prepaid expenses	(318)	(3,584)
Advance to employees	(4,200)
Increase (decrease) from changes in:
Accounts payable	38,995	37,818
Accrued interest expense	855	2,600
Accrued expenses	(5,912)	(27,790)
Net cash used in operating activities	(258,099)	(105,909)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(4,258)	(10,000)
Net cash used in investing activities	(4,258)	(10,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock	216,560
Payments on shareholder advances	(19,650)	(26,900)
Payments on notes payable	(9,358)	(17,123)
Net cash provided by (used in) financing activities	187,552	(44,023)
Net decrease in cash	(74,805)	(159,932)
CASH, BEGINNING OF YEAR	214,871	502,777
CASH, END OF THE PERIOD	140,066	342,845
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 7,588	$ 8,053

XML

ACCOUNTING CHANGES AND ERROR CORRECTIONS

6 Months Ended

Apr. 30, 2018

Quarterly Financial Information Disclosure [Abstract]

ACCOUNTING CHANGES AND ERROR CORRECTIONS

NOTE 1. 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, 2018, 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, 2018 and 2017.

XML

BASIS OF PRESENTATION

6 Months Ended

Apr. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

NOTE 2. 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, 2017. The results of operations for the three and six month periods ended April 30, 2018 and 2017 are not necessarily indicative of operating results for the full year.

XML

ACCOUNTS RECEIVABLE

6 Months Ended

Apr. 30, 2018

Accounts Receivable, Net [Abstract]

ACCOUNTS RECEIVABLE

NOTE 3. ACCOUNTS RECEIVABLE

Management evaluates its receivables on a quarterly basis to assess the validity of remaining receivables. During the quarter ended April 30, 2018 management has determined that there is significant doubt regarding the remaining receivable balance of $8,026 and as such applied a 100 percent allowance on the receivable balance. No allowance was deemed necessary for the fiscal year ended October 31, 2017.

XML

INVENTORY

6 Months Ended

Apr. 30, 2018

Inventory Disclosure [Abstract]

INVENTORY

NOTE 4. 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. Innovative Designs, Inc. (the “Company”) has decided to discontinue the selling of its hunting and swimming line of apparel. The Company has booked a reserve against this inventory at April 30, 2018 and October 31, 2017 of $51,000. Management will continue to evaluate its obsolete inventory reserve throughout the year and make adjustments as needed.

XML

EARNINGS PER SHARE

6 Months Ended

Apr. 30, 2018

PER SHARE INFORMATION

EARNINGS PER SHARE

NOTE 5. 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, the Company only has common stock outstanding. As a result, diluted earnings per share was not calculated.

XML

INCOME TAXES

6 Months Ended

Apr. 30, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 6. 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.

XML

SHIPPING AND HANDLING COSTS

6 Months Ended

Apr. 30, 2018

Shipping And Handling Costs

SHIPPING AND HANDLING COSTS

NOTE 7. 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 $9,000 and $11,000 for the six month periods ended April 30, 2018 and 2017, respectively.

XML

COMMON STOCK

6 Months Ended

Apr. 30, 2018

Equity [Abstract]

COMMON STOCK

NOTE 8. COMMON STOCK

During the six-month period ended April 30, 2018, the Company sold 707,250 shares of common stock to three investors for total proceeds of $216,560. The stock was issued for prices from $0.25 - $0.32 per share. In addition, the Company issued 105,000 shares to two individuals for services performed during the period. The shares issued were valued at $0.18 and $0.40 per share for a total price of $29,900. We believe that Section 4(2) of the Securities Act of 1933, as amended, was available because these transactions did not involve a public offering and there was no general solicitation or general advertising involved in these transactions. We placed legends on the stock certificates stating that the securities were not registered under the Securities Act and set forth the restrictions on their transferability and sale.

During the six-month period ended April 30, 2017, the Company issued 30,000 shares to one director for services performed during the period. The shares issued were valued at $0.25 per share for a price of $7,500. We believe that Section 4(2) of the Securities Act of 1933, as amended, was available because these transactions did not involve a public offering and there was no general solicitation or general advertising involved in these transactions. We placed legends on the stock certificates stating that the securities were not registered under the Securities Act and set forth the restrictions on their transferability and sale.

XML

DEPOSITS ON EQUIPMENT

6 Months Ended

Apr. 30, 2018

Deposit Assets [Abstract]

DEPOSITS ON EQUIPMENT

NOTE 9. 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, 2018, 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.

XML

SEGMENT INFORMATION

6 Months Ended

Apr. 30, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 10. SEGMENT INFORMATION

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

The following tables present our business segment information for the six month period ended April 30, 2018 and 2017:

	2018		2017
Revenues:
Apparel	$	96,172	$	157,861
House Wrap		37,194		50,511
Total Revenues	$	133,366	$	208,372
Assets:
Apparel	$	556,343	$	776,593
House Wrap		1,227,436		1,238,063
Total	$	1,783,779	$	2,014,656
Capital Expenditures:
Apparel	$	4,258	$	—
Housewrap		—	$	10,000
Total	$	4,258	$	10,000
Depreciation:
Apparel	$	6,039	$	1,640
House Wrap		11,717		13,653
Total	$	17,756	$	15,293

XML

LEGAL PROCEEDINGS

6 Months Ended

Apr. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

LEGAL PROCEEDINGS

NOTE 11. LEGAL PROCEEDINGS

On November 4, 2016, the Federal Trade Commission (FTC) filed a complaint against the Company in the U.S. District Court Western District of Pennsylvania, number 16-1669. In the complaint, the FTC alleges, that, among other matters, the Company does 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 redress of rescission of revenue the Company received from the sale of House Wrap and a permanent injunction. The parties are currently in the expert discovery phase. Expert depositions were completed in June 2018.

The Company strongly denies the allegation and intends to vigorously defend itself. It is the Company’s belief that the complaint is based on improper testing of the INSULTEX products using the wrong type of testing equipment.

XML

SUBSEQUENT EVENTS

6 Months Ended

Apr. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12. SUBSEQUENT EVENTS

The Company has evaluated subsequent events in accordance with ASC Topic 855, “Subsequent Events”, through June 12, 2018, which is the date financial statements were available to be issued. The Company identified the below subsequent events.

In May 2018, the Company sold 25,000 shares to an individual for $5,000. The shares were valued at $0.20 per share. The Company issued 5,000 shares to one individual for services valued at $1,000.

In May 2018, the Company entered into a loan agreement with an individual for $50,000. The loan and $5,000 in interest will be paid on or before June 1, 2019. The individual can convert all principal and interest to shares of Company stock at $0.20 per share.

XML

SEGMENT INFORMATION (Tables)

6 Months Ended

Apr. 30, 2018

Segment Reporting [Abstract]

Schedule of business segment information

The following tables present our business segment information for the six month period ended April 30, 2018 and 2017:

	2018		2017
Revenues:
Apparel	$	96,172	$	157,861
House Wrap		37,194		50,511
Total Revenues	$	133,366	$	208,372
Assets:
Apparel	$	556,343	$	776,593
House Wrap		1,227,436		1,238,063
Total	$	1,783,779	$	2,014,656
Capital Expenditures:
Apparel	$	4,258	$	—
Housewrap		—	$	10,000
Total	$	4,258	$	10,000
Depreciation:
Apparel	$	6,039	$	1,640
House Wrap		11,717		13,653
Total	$	17,756	$	15,293

XML

ACCOUNTS RECEIVABLE (Details Narrative) - USD ($)	Apr. 30, 2018	Oct. 31, 2017
Accounts Receivable, Net [Abstract]
Bad debts	$ 8,026	$ 0

XML

INVENTORY (Details Narrative) - USD ($)	Apr. 30, 2018	Oct. 31, 2017
Inventory Disclosure [Abstract]
Inventory valuation reserves	$ 51,000	$ 51,000

XML

SHIPPING AND HANDLING COSTS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017	Apr. 30, 2018	Apr. 30, 2017
Shipping And Handling Costs
Shipping and handling costs	$ 18,080	$ 25,568	$ 82,462	$ 106,074

XML

COMMON STOCK (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017	Oct. 31, 2017
Related Party Transaction [Line Items]
Value of shares issued during the period	$ 216,560		$ 172,140
Value of shares issued for services	$ 29,900		$ 97,700
Three Individual [Member]
Related Party Transaction [Line Items]
Number of shares issued during the period	707,250
Value of shares issued during the period	$ 216,560
Three Individual [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Share price (in dollars per share)	$ 0.32
Three Individual [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Share price (in dollars per share)	$ 0.25
Two Individual [Member]
Related Party Transaction [Line Items]
Number of shares issued for services (in shares)	105,000
Value of shares issued for services	$ 29,900
Two Individual [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Share price for shares issued for services (in dollars per share)	$ 0.40
Two Individual [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Share price for shares issued for services (in dollars per share)	$ 0.18
One Director [Member]
Related Party Transaction [Line Items]
Number of shares issued during the period		30,000
Value of shares issued during the period		$ 7,500
Share price (in dollars per share)		$ 0.25

XML

DEPOSITS ON EQUIPMENT (Details Narrative) - USD ($)

6 Months Ended

Jul. 12, 2015

Apr. 30, 2018

Deposit Assets [Abstract]

Description of assets contract

The purchase price is $700,000 and to be made in four installments. The first installment of $300,000 is to be made at the execution of the agreement. The second installment of $200,000 is to be made when the machinery and equipment is ready to be shipped to the United States. The third installment of $100,000 is to be made once the machinery and equipment is producing INSULTEX, and the fourth and final installment of $100,000 is to made after the first commercial production run of INSULTEX is completed.

Purchase price of equipment

$ 700,000

First installment for equipment

300,000

Second installment for equipment

200,000

Third installment for equipment

100,000

Fourth installment for equipment

$ 100,000

Deposits on equipment

$ 500,000

Advanced payment on machine

100,000

Shipping, site improvements and installation of the equipment expenses

$ 17,000

XML

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017	Apr. 30, 2018	Apr. 30, 2017	Oct. 31, 2017
Segment Reporting Information [Line Items]
Total Revenues	$ 17,163	$ 39,162	$ 133,366	$ 208,372
Assets	1,783,779	2,014,656	1,783,779	2,014,656	$ 1,836,661
Capital Expenditures			4,258	10,000
Depreciation			17,756	15,293
Apparel Segment [Member]
Segment Reporting Information [Line Items]
Total Revenues			96,172	157,861
Assets	556,343	776,593	556,343	776,593
Capital Expenditures			4,258
Depreciation			6,039	1,640
House Wrap Segment [Member]
Segment Reporting Information [Line Items]
Total Revenues			37,194	50,511
Assets	$ 1,227,436	$ 1,238,063	1,227,436	1,238,063
Capital Expenditures				10,000
Depreciation			$ 11,717	$ 13,653

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SEGMENT INFORMATION (Details Narrative)	6 Months Ended
	Apr. 30, 2018 Segment
Segment Reporting [Abstract]
Number of reportable segments	2

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended	12 Months Ended
	May 31, 2018	Apr. 30, 2018	Oct. 31, 2017
Sale of stock		$ 216,560	$ 172,140
Value of shares issued for services		$ 29,900	$ 97,700
Subsequent Event [Member] | Individual [Member]
Sale of stock	$ 25,000
Number stock sold (in shares)	5,000
Share price (in dollars per share)	$ 0.20
Subsequent Event [Member] | Individual [Member] | Loan Agreement [Member]
Face amount	$ 50,000
Repayment of debt amount	$ 5,000
Conversion price	$ 0.20
Subsequent Event [Member] | One Individual [Member]
Number of shares issued for services (in shares)	5,000
Value of shares issued for services	$ 1,000