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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 July 31, 2015
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from _______ to ________.
Commission File Number: 000-51791
INNOVATIVE DESIGNS, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 03-0465528 | |
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
124 Cherry Street
Pittsburgh, Pennsylvania 15223
(Address of Principal Executive Offices, Zip Code)
(412) 799-0350
(Issuer’s Phone Number Including Area Code)
N/A
(Former Name or Former Address, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting Company” in Rule 12b-2 of the Exchange Act.
(Check One)
| Large Accelerated Filer ☐ | Accelerated Filer ☐ |
| Non-accelerated Filer ☐ | Smaller reporting company ☒ |
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
As of September 11, 2015, there were 24,261,310 shares of the Registrant’s common stock, par value $.0001 per share, outstanding.
Transitional Small Business Disclosure Format: YES ☐ NO ☒
Innovative Designs, Inc.
Index
Form 10-Q for the Quarter Ended July 31, 2015
ITEM
1. CONDENSED FINANCIAL STATEMENTS
INNOVATIVE DESIGNS, INC.
July 31, 2015 (Unaudited) and October 31, 2014
| ASSETS | ||||||||
| 2015 | 2014 | |||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 1,506,501 | $ | 988,681 | ||||
| Accounts receivable | 35,182 | 64,298 | ||||||
| Other receivables | — | 30,000 | ||||||
| Inventory - net of obsolete inventory reserve of $46,000 for 2015 and 2014 | 929,552 | 889,560 | ||||||
| Prepaid insurance | 7,803 | 2,881 | ||||||
| Total current assets | 2,479,038 | 1,975,420 | ||||||
| PROPERTY AND EQUIPMENT - NET | 48,963 | 56,189 | ||||||
| OTHER ASSETS | ||||||||
| Deposits on equipment | 200,000 | — | ||||||
| Deferred financing costs, net of accumulated amortization of $1,989 and $990 for 2015 and 2014 | 11 | 1,010 | ||||||
| TOTAL ASSETS | $ | 2,728,012 | $ | 2,032,619 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 55,625 | $ | 87,933 | ||||
| Current portion of notes payable | 14,974 | 59,407 | ||||||
| Accrued interest expense | 136,151 | 184,487 | ||||||
| Due to shareholders | 329,130 | 330,000 | ||||||
| Accrued expenses | 96,354 | 87,266 | ||||||
| Total current liabilities | 632,234 | 749,093 | ||||||
| Long-term portion of notes payable | 243,827 | 327,529 | ||||||
| TOTAL LIABILITIES | 876,061 | 1,076,622 | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $0.0001 par value, 25,000,000 shares authorized | — | — | ||||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized, and 24,161,310 and 22,438,043 issued and outstanding as of July 31, 2015 and October 31, 2014 | 2,416 | 2,244 | ||||||
| Additional paid-in capital | 8,758,265 | 7,522,487 | ||||||
| Accumulated deficit | (6,908,730 | ) | (6,568,734 | ) | ||||
| Total stockholders’ equity | 1,851,951 | 955,997 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,728,012 | $ | 2,032,619 |
The accompanying condensed notes are an integral part of these financial statements.
| - 1 - |
INNOVATIVE DESIGNS, INC.
CONDENSED STATEMENTS OF OPERATIONS
Three and Nine Month Periods Ended July 31, 2015 and 2014 (Unaudited)
| Three Month Periods Ended July 31, | Nine Month Periods Ended July 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| REVENUES - NET | $ | 46,593 | $ | 195,035 | $ | 549,374 | $ | 635,457 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of sales | 24,903 | 123,782 | 277,817 | 322,938 | ||||||||||||
| Selling, general and administrative expenses | 224,426 | 169,690 | 541,207 | 515,252 | ||||||||||||
| 249,329 | 293,472 | 819,024 | 838,190 | |||||||||||||
| LOSS FROM OPERATIONS | (202,736 | ) | (98,437 | ) | (269,650 | ) | (202,733 | ) | ||||||||
| OTHER INCOME/(EXPENSE) | ||||||||||||||||
| Miscellaneous income | 5 | — | 390 | — | ||||||||||||
| Interest expense | (31,227 | ) | (24,812 | ) | (70,736 | ) | (88,485 | ) | ||||||||
| Total other expense | (31,222 | ) | (24,812 | ) | (70,346 | ) | (88,485 | ) | ||||||||
| NET LOSS | $ | (233,958 | ) | $ | (123,249 | ) | $ | (339,996 | ) | $ | (291,218 | ) | ||||
| PER SHARE INFORMATION | ||||||||||||||||
| Net Loss Per Common Share | $ | (0.010 | ) | $ | (0.006 | ) | $ | (0.015 | ) | $ | (0.015 | ) | ||||
| Weighted Average Number of Common Shares Outstanding | 23,708,444 | 20,444,578 | 23,153,055 | 19,888,248 | ||||||||||||
The accompanying condensed notes are an integral part of these financial statements.
| - 2 - |
INNOVATIVE DESIGNS, INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
July 31, 2015 (Unaudited) and October 31, 2014
| Common Stock | Common Stock | Additional | Accumulated | |||||||||||||||||
| Number of Shares | Amount | Paid-in Capital | Deficit | Total | ||||||||||||||||
| Balance at October 31, 2013 | 19,325,743 | $ | 1,935 | $ | 5,777,606 | $ | (6,134,664 | ) | $ | (355,123 | ) | |||||||||
| Shares issued for services | 180,000 | 18 | 86,982 | — | 87,000 | |||||||||||||||
| Shares issued for debt conversion | 392,300 | 39 | 86,861 | — | 86,900 | |||||||||||||||
| Sale of stock | 2,540,000 | 252 | 1,571,038 | — | 1,571,290 | |||||||||||||||
| Net loss | — | — | — | (434,070 | ) | (434,070 | ) | |||||||||||||
| Balance at October 31, 2014 | 22,438,043 | 2,244 | 7,522,487 | (6,568,734 | ) | 955,997 | ||||||||||||||
| Shares issued for services | 65,000 | 6 | 56,994 | — | 57,000 | |||||||||||||||
| Shares issued for conversion of accrued interest | 122,667 | 12 | 91,988 | — | 92,000 | |||||||||||||||
| Sale of stock | 1,535,600 | 154 | 1,086,796 | — | 1,086,950 | |||||||||||||||
| Net loss | — | — | — | (339,996 | ) | (339,996 | ) | |||||||||||||
| Balance at July 31, 2015 | 24,161,310 | $ | 2,416 | $ | 8,758,265 | $ | (6,908,730 | ) | $ | 1,851,951 | ||||||||||
The accompanying condensed notes are an integral part of these financial statements.
| - 3 - |
INNOVATIVE DESIGNS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Nine Month Periods Ended July 31, 2015 and 2014 (Unaudited)
| For the Nine Month Periods Ended | ||||||||
| July 31, 2015 | July 31, 2014 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (339,996 | ) | $ | (291,218 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Common stock issued for conversion of accrued interest | 92,000 | — | ||||||
| Common stock issued for services | 57,000 | 57,900 | ||||||
| Amortization | 999 | 651 | ||||||
| Depreciation | 7,226 | 2,953 | ||||||
| Increase (decrease) from changes in: | ||||||||
| Accounts receivable | 29,116 | 57,729 | ||||||
| Other receivable | 30,000 | 4,000 | ||||||
| Inventory | (39,992 | ) | (40,576 | ) | ||||
| Deposits on inventory | — | (12,954 | ) | |||||
| Prepaid insurance | (4,922 | ) | 5,470 | |||||
| Deposits on equipment | (200,000 | ) | — | |||||
| Deferred loan costs | — | (2,000 | ) | |||||
| Accounts payable | (32,308 | ) | (9,910 | ) | ||||
| Accrued expenses | 9,088 | 144,562 | ||||||
| Accrued interest expense | (48,336 | ) | (7,037 | ) | ||||
| Net cash used in operating activities | (440,125 | ) | (90,430 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Capital expenditures | — | (4,843 | ) | |||||
| Net cash used in investing activities | — | (4,843 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from sale of stock | 1,086,950 | 688,340 | ||||||
| Payments on shareholder advances | (70,000 | ) | (46,685 | ) | ||||
| Proceeds from shareholder advances | 69,130 | 50,000 | ||||||
| Payments on notes payable | (128,135 | ) | (149,790 | ) | ||||
| Proceeds from notes payable | — | 80,000 | ||||||
| Net cash provided by financing activities | 957,945 | 621,865 | ||||||
| Net increase in cash | 517,820 | 526,592 | ||||||
| CASH, BEGINNING OF YEAR | 988,681 | 69,613 | ||||||
| CASH, END OF THE PERIOD | $ | 1,506,501 | $ | 596,205 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Stock issuance for conversion of accrued interest | $ | 92,000 | — | |||||
| Stock issuance for debt conversion | $ | — | $ | 86,900 | ||||
| Cash paid for interest | $ | 27,072 | $ | 89,022 | ||||
The accompanying condensed notes are an integral part of these financial statements.
| - 4 - |
INNOVATIVE DESIGNS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
Nine Month Periods Ended July 31, 2015 and 2014 (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 July 31, 2015, the changes therein for the three and nine month periods then ended and the results of operations for the three and nine month periods ended July 31, 2015 and 2014. |
| 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 Company’s annual report on Form 10-K for the fiscal year ended October 31, 2014. The results of operations for the three and nine month periods ended July 31, 2015 and 2014 are not necessarily indicative of operating results for the full year. |
| NOTE 3. | INVENTORY |
| Inventory consists principally of purchased finished goods. Inventory is stated at the lower of cost or market on a first-in, first-out basis. Innovative Designs, Inc. (the “Company”) has decided to discontinue the manufacturing of its hunting and swimming line of apparel. The Company has booked a reserve against this inventory at July 31, 2015 and October 31, 2014 of $46,000. Management will continue to evaluate its obsolete inventory reserve throughout the year and make adjustments as needed. | |
| NOTE 4. | 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 5. | 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. |
| - 5 - |
INNOVATIVE DESIGNS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
Nine Month Periods Ended July 31, 2015 and 2014 (Unaudited)
| NOTE 6. | 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 billed back to customer orders was approximately $29,000 and $46,000 for the nine month periods ended July 31, 2015 and 2014, respectively. These amounts are included in both revenue and selling, general and administrative expenses. | |
| NOTE 7. | DEBT |
| During February 2015, the Company entered into a note payable agreement with Riccelli Properties, which is wholly owned and operated by, the Company’s Chief Executive Officer, Joseph Riccelli, Sr., in the amount of $69,130. This amount reflects payments made by Riccelli Properties on other debt obligations of the Company with proceeds of the sale of real estate. The note has a term of 1 year and an interest rate of 10%. | |
| NOTE 8. | COMMON STOCK |
| During the three month period ended January 31, 2015, the Company sold its stock to five investors. The stock was issued for prices from $.60 - $.80 per share. A total of 283,000 shares of common stock were sold, resulting in proceeds of $203,750. 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 three month period ended April 30, 2015, the Company sold its stock to eleven investors. The stock was issued for prices from $.60 - $.80 per share. A total of 492,600 shares of common stock were sold, resulting in proceeds of $360,700. In addition, the Company issued 10,000 shares for services performed during February 2015. The shares issued were valued at $1.20 per share or an aggregate price of $12,000. 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. |
| - 6 - |
INNOVATIVE DESIGNS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
Nine Month Periods Ended July 31, 2015 and 2014 (Unaudited)
| During the three month period ended July 31, 2015, the Company sold its stock to eight investors. The stock was issued for prices from $.60 - $.75. A total of 760,000 shares of common stock were sold, resulting in proceeds of $522,500. In addition, the Company issued 55,000 shares to two individuals for services performed during May and June 2015. The shares were issued for prices from $.70 - $1.25 per share or an aggregate price of $45,000. Additionally during July 2015, an individual converted accrued interest of $92,000 into 122,667 shares of common stock. 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. | SEGMENT INFORMATION |
| We have organized our operations into two segments. We rely on an internal management reporting process that provides segment information for purposes of making financial decisions and allocating resources. | |
| The following tables present our business segment information for the nine month periods ended July 31, 2015 and 2014: |
| 2015 | 2014 | |||||||
| Revenues: | ||||||||
| Apparel | $ | 328,820 | $ | 438,588 | ||||
| Housewrap | 220,554 | 196,869 | ||||||
| Total Revenues | $ | 549,374 | $ | 635,457 | ||||
| Assets: | ||||||||
| Apparel | $ | 1,985,066 | $ | 1,066,275 | ||||
| Housewrap | 742,946 | 328,411 | ||||||
| Total | $ | 2,728,012 | $ | 1,394,686 | ||||
| Depreciation: | ||||||||
| Apparel | $ | 1,395 | $ | 1,380 | ||||
| Housewrap | 5,831 | 1,573 | ||||||
| Total | $ | 7,226 | $ | 2,953 | ||||
| NOTE 10. | DEPOSITS ON EQUIPMENT |
| On July 12, 2015 the Company reached an agreement with Ketut Jaya to purchase the machinery and equipment utilized to produce the INSULTEX material. The purchase price is $700,000 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. As of July 31, 2015, the Company has made payments of $200,000. |
| - 7 - |
INNOVATIVE DESIGNS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
Nine Month Periods Ended July 31, 2015 and 2014 (Unaudited)
| NOTE 11. | SUBSEQUENT EVENTS |
| The Company has evaluated subsequent events in accordance with ASC Topic 855, “ Subsequent Events ”, through September 15, 2015, which is the date financial statements were available to be issued. With the exception of the matters discussed below, no subsequent event items were identified by the Company. | |
| In August and September 2015, the Company sold 100,000 shares of its stock to three investors. The stock was issued for prices from $.60 to $1.00 per share, for an aggregate price of $78,000. 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. |
| - 8 - |
INNOVATIVE DESIGNS, INC.
| · | 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, and | |
| · | Establishing distribution channels for our House Wrap product. |
| - 9 - |
INNOVATIVE DESIGNS, INC.
| Results of Operations | |
| Comparison of the Three Month Period Ended July 31, 2015 with the Three Month Period Ended July 31, 2014. | |
| The following table shows a comparison of the results of operations between the three month periods ended July 31, 2015 and July 31, 2014: |
| Three Month | Three Month | |||||||||||||||||||||||
| Period Ended | Period Ended | |||||||||||||||||||||||
| July 31, | % of | July 31, | % of | Increase | ||||||||||||||||||||
| 2015 | Sales | 2014 | Sales | (Decrease) | % Change | |||||||||||||||||||
| REVENUE | $ | 46,593 | 100.00 | % | 195,035 | 100.00 | % | $ | (148,442 | ) | -76.11 | % | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||
| Cost of sales | 24,903 | 53.45 | % | 123,782 | 63.47 | % | (98,879 | ) | -79.88 | % | ||||||||||||||
| Selling, general and administrative expenses | 224,426 | 481.67 | % | 169,690 | 87.00 | % | 54,736 | 32.26 | % | |||||||||||||||
| Loss from operations | (202,736 | ) | -435.12 | % | (98,437 | ) | -50.47 | % | (104,299 | ) | 105.96 | % | ||||||||||||
| OTHER INCOME/(EXPENSE) | ||||||||||||||||||||||||
| Miscellaneous income | 5 | 0.01 | % | — | — | 5 | 100.00 | % | ||||||||||||||||
| Interest expense | (31,227 | ) | -67.02 | % | (24,812 | ) | -12.72 | % | (6,415 | ) | 25.85 | % | ||||||||||||
| Net loss | $ | (233,958 | ) | -502.13 | % | $ | (123,249 | ) | -63.19 | % | $ | (110,709 | ) | 89.83 | % | |||||||||
| Revenues for the quarter ended July 31, 2015 were $46,593 compared to revenues of $195,035 for the quarter ended July 31, 2014. The decrease is caused, primarily, by the fact that during the quarter ended July 31, 2014, a distributor of our House Wrap product purchased approximately $160,000 of the product. We are focusing most of our resources and efforts toward the development of a market for our House Wrap product line. During the three month period ended July 31, 2015 House Wrap sales totaled $43,389 in comparison with $174,388 during the three month period ended July 31, 2014. Our net loss for the three months ended July 31, 2015 was ($233,958). | |
| Our selling, general and administrative expenses were $224,426 for the three months ended July 31, 2015 compared to $169,690 for the three months ended July 31, 2014. |
| - 10 - |
INNOVATIVE DESIGNS, INC.
| Results of Operations | |
| Comparison of the Nine Month Period Ended July 31, 2015 with the Nine Month Period Ended July 31, 2014. | |
| The following table shows a comparison of the results of operations between the nine month periods ended July 31, 2015 and July 31, 2014: |
| Nine Month | Nine Month | |||||||||||||||||||||||
| Period Ended | Period Ended | |||||||||||||||||||||||
| July 31, | % of | July 31, | % of | Increase | ||||||||||||||||||||
| 2015 | Sales | 2014 | Sales | (Decrease) | % Change | |||||||||||||||||||
| REVENUE | $ | 549,374 | 100.00 | % | $ | 635,457 | 100.00 | % | $ | (86,083 | ) | -13.55 | % | |||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||
| Cost of sales | 277,817 | 50.57 | % | 322,938 | 50.82 | % | (45,121 | ) | -13.97 | % | ||||||||||||||
| Selling, general and administrative expenses | 541,207 | 98.51 | % | 515,252 | 81.08 | % | 25,955 | 5.04 | % | |||||||||||||||
| Loss from operations | (269,650 | ) | -49.08 | % | (202,733 | ) | -31.90 | % | (66,917 | ) | 33.01 | % | ||||||||||||
| OTHER INCOME/(EXPENSE) | ||||||||||||||||||||||||
| Miscellaneous income | 390 | 0.07 | % | — | — | 390 | 100.00 | % | ||||||||||||||||
| Interest expense | (70,736 | ) | -12.88 | % | (88,485 | ) | -13.93 | % | 17,749 | -20.06 | % | |||||||||||||
| Net loss | $ | (339,996 | ) | -61.89 | % | $ | (291,218 | ) | -45.83 | % | $ | (48,778 | ) | 16.75 | % | |||||||||
| Revenues for the nine month period ended July 31, 2015 were $549,374 compared to revenues of $635,457 for the nine month period ended July 31, 2014. The decrease in revenue was largely the result of the bulk purchase of our House wrap product during the quarter ended July 31, 2014. We are focusing most of our resources and efforts toward the development of a market for our House Wrap product line. During the nine month period ended July 31, 2015 House Wrap sales totaled $220,554 in comparison with $196,869 during the nine month period ended July 31, 2014. Our net loss for the nine months ended July 31, 2015 was $(339,996). | |
| Our selling, general and administrative expenses were $541,207 for the nine months ended July 31, 2015 compared to $515,252 for the nine months ended July 31, 2014. |
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INNOVATIVE DESIGNS, INC.
| Liquidity and Capital Resources | |
| During the quarter ended July 31, 2015, we funded our operations from revenues from sales and private sales of our securities. | |
| 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 House Wrap product and to purchase equipment needed for the manufacture of the INSULTEX product. The Company has 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 intends to have the machine shipped to the United States where the Company will produce INSULTEX under its own brand name. The Company hopes to have the machine within the next two months and expects to be producing its own INSULTEX within the next six months. See Note 10 of the Notes to the Condensed Financial Statements. | |
| Long Term: The Company will continue to fund its operations from revenues, borrowings from private parties and the possible sale of our securities. Should we not be able to rely on the private sources for borrowing, our operations would be severely effected as we would not be able to fund our purchase orders to our suppliers for finished goods. |
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INNOVATIVE DESIGNS, INC.
| - 13 - |
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 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Innovative Designs, Inc. | |||
| Registrant | |||
| Date: September 18, 2015 | by: | /s/ Joseph Riccelli | |
| Joseph Riccelli, Sr., Chief Executive Officer | |||
| and Chief Financial Officer | |||
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No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
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| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
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No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
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