U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒	Annual report under section 13 or 15(d) of the Securities Act of 1934. For the fiscal year ended October 31, ~~2022~~2023
☐	Transition report under section 13 or 15(d) of the Securities 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 Incorporation or Organization)		(I.R.S. Employer Identification Number)

124 Cherry Street		15223
Pittsburgh, Pennsylvania (Address of Principal Executive Offices)		(Zip Code)

(412) 799-0350

(Registrant’s telephone number including area code)

Securities to be registered pursuant to Section 12(b) of the Exchange Act:

________________

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

________________

Securities registered or to be registered pursuant to Section 12(g) of the Exchange Act:

(Title of Class)

Common Stock, $.0001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to section 13 or Section 15 (d) of the Act.

☐ Yes ☒ No

Check whether the issuer (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 past 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 x☐ 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 for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers to Item 405 of Regulation S-K (sec. 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. (Check One)

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

Emerging reporting Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The issuer’s revenues for its most recent fiscal year were $ ~~263~~347,~~293~~763.

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $3 6,~~298~~706,~~951~~230. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purposes.

The number of shares of the registrant’s common stock outstanding on February 813, ~~2023~~2024, was 3537,~~262~~924,~~560~~003.

Transitional Small Business Disclosure Format: Yes ☐ No ☒

ITEM 1.

DESCRIPTION OF BUSINESS.

The Company was incorporated in the State of Delaware on June 25, 2002. We operate in two separate business segments: a house wrap for the building construction industry and cold weather clothing. Both of our segment lines use products made from Insultex, which is a low-density polyethylene semi-crystalline, closed cell foam in which the cells are totally evacuated. with buoyancy, scent block, and thermal resistant properties. We have a license agreement directly with the owner of the Insultex technology. In December 2015, we took delivery of equipment capable of producing Insultex. Given the time and cost of bringing the equipment into production mode and our current financial condition until we are able to begin manufacturing Insultex, we will continue to operate under the license agreement for the manufacture of Insultex used in our products.

Other companies are free to purchase Insultex from us assuming that it is a company within the distribution jurisdiction that we have, which is worldwide with the exception of Korea and Japan. Other than Korea and Japan, we are the sole worldwide supplier/distributor of the Insultex material.

We offer the following products containing Insultex:

	●	House Wrap: Our house wrap product is designed for the home building construction industry. This product, made from Insultex provides barrier protection plus moisture vapor transmission and approximately R-3 and R-6 value insulation. We no longer manufacture the R-3 product line and are only selling it from our inventory. House Wrap is a multi-ply weatherization membrane that provides a protective layer under a building’s outer covering that resists water and air infiltration, preventing mold and mildew buildup that could cause structural rotting. What differentiates Insultex from its competition is the fact that it offers an R-Value, the term used to measure thermal resistance, and is most commonly used when referring to the insulating qualities of a building structure, thus increasing energy efficiency. We are currently working on developing a House Wrap product line for the commercial building construction industry.

	●	In December 2016, we temporarily suspended any advertising of our House Wrap product line. We took this action as a result of a lawsuit brought by the Federal Trade Commission (‘FTC”). On September 24, 2020, a judgment was entered in favor of the Company against the FTC as to all claims by the FTC. The judgment was upheld on appeal by the FTC on July 22, 2021. In March of 2021, we resumed advertising for our House Wrap products. We also sell a tape that is designed to be used with the House Wrap.

	●	Floating Swimwear: Product under our product name “Swimeez”. Our swimwear is designed to be a swim aid. The interior lining of our swimwear product is made from INSULTEX, which enhances floatability. This product was discontinued during 2010 and we are only selling from our existing inventory.

	●	Hunting Apparel Line: Our hunting apparel provides almost total block from odors provided by the INSULTEX material. This product was discontinued during 2010 and we are only selling from our existing inventory.

	●	Arctic Armor Line: The Arctic Armor line, introduced in April of 2006, consists of a jacket, bib and gloves. The suit contains 3 layers of INSULTEX for uncompromised warmth and provides the user with guaranteed buoyancy. The gloves contain a single layer of INSULTEX and are windproof, waterproof and good to sub-zero temperatures as are the jacket and bibs. We are currently only selling from our existing inventory.

	●	Insultex Material: We sell Insultex material in bulk to non-competing customers.

We also offer a product that helps restore the waterproof character of the outer side of our Arctic Armor clothing. In addition, we offer cold weather headgear and a base insulation clothing product.

We no longer manufacture our apparel products containing Insultex. We only sell from our existing inventory. Our Inultex House Wrap product is manufactured in the United States through third-party manufacturers.

For financial information regarding each segment, please see Note 10 of the Notes to Financial Statements appearing elsewhere in this Report.

The Insultex License and Manufacturing Agreement

Under the terms of the agreement between us and the Ketut Group, Ketut Group agrees to promptly deliver to Innovative Designs, Inc. within twenty-eight (28) days of receiving an order, all Insultex ordered by us. Under the terms of the agreement, we are required to pay a fixed amount per meter of Insultex. This fixed amount will not change under the agreement for a period of ten (10) years after the date of the agreement was signed, which was April 1, 2006. The agreement provides that after the ten (10) year period, the price of the Insultex shall be adjusted for a subsequent ten (10) year term, no more than twelve percent (12%) for the subsequent ten (10) year period. We order Insultex from time to time as needed and are not required to purchase any minimum amount of Insultex during the term of the agreement, and we are not required to make any minimum annual payment. However, should we place an order; any quantity ordered must be a minimum of 100,000 yards of Insultex. We are not required to pay any part of any sublicense fee that we receive from third party sub-licensees, and we are not required to pay any fees to the Ketut Group. This agreement will be in full legal force and effect for an initial term of ten (10) years from the date of its execution. We have the option to renew this agreement for up to three (3) successive terms of ten (10) years each by giving notice of our intention to so renew not less than ninety (90) days prior to the expiration of the then-current term. The Company has exercised the first ten-year renewal option. We purchased the equipment capable of producing Insultex from the Ketut Group.

COLD WEATHER CLOTHING PRODUCTS

Arctic Armor Line

Our Arctic Armor line products are intended for use by the following consumer groups that are in the Company’s target market for these products: We are currently only selling these products form our existing inventory.

	●	Ice fisherman

	●	Snowmobilers

	●	Utility workers

	●	Oil/gas pipeline workers

	●	Railroad workers

	●	Construction workers

	●	Ski resort workers; and

	●	Police and First Responders.

Website and Retailers

We sell both wholesale and retail products on our web site. Our web site, located at www.idigear.com, contains information on our products, technical information on Insultex insulation, e-commerce capabilities with “shopping cart”, wholesaler information and order forms, company contact information, and links to retailers that carry our products. We have obtained the services of BA Web Productions who assists us in designing and continually developing our website. Our web site features a “wholesaler only” area, allowing our wholesalers access to information, ordering, and reordering. Our products are offered and sold by retailers, distributors and through our web site in all states and Canada. Except for products sold through our web site, others who purchase our products do so at wholesale prices which they plan to sell at their retail prices or use within their industry.

Sales

We sell our products online, to distributors and through independent sales agents and agencies. Once we have made contact with a potential sales agency or solo agent, we evaluate their existing accounts, the capacity and potential for them to effectively push our products. We also look at their current product lines through the sales channel. Our primary market area is the outdoor industry which includes all activity done in cold weather. These activities include recreational such as hunting, ice fishing, snowmobiling, and industries such as oil and gas, utilities and construction. Once we agree to bring on an independent sales agent or agency, we enter into a standard agreement.

A typical sales representative agreement will have a term of one year with the right of either party to terminate upon thirty days written notice. We do not provide any free samples of our products and all sales expenses are the sole obligation of the sales agent.

Certain retailers buy directly from us. We have no verbal or written agreements with them. These retailers purchase our products strictly on a purchase order basis. During our last fiscal year, we sold our products to such retailers as Canadian Tire Corporation Limited. Some of our distributors during the last fiscal year were Pro Fishing Supplies and Fleece Corner. We distribute our products to the following:

Swimeez Products

We distribute our Swimeez products through our web site.

Hunting Apparel Line

We distribute our hunting apparel through our web site.

Arctic Armor Line

We distribute the Arctic Armor Line through our web site, to retailers and to distributors across the United States and Canada. These products are also marketed to utility companies, oil/gas pipeline workers, railroad workers, police and first responders, and to construction workers.

During our last fiscal year, one customer accounted for more than ten percent of our cold weather clothing products sales, Pro Fishing Supplies (13.0%).

HOUSE WRAP

House Wrap

In early January 2008, we announced that we had completed our research and development effort on a new use for Insultex as a house wrap for the home building construction industry. This house wrap provides barrier protection plus moisture vapor transmission and the feature of approximately R-3 and R-6 value insulation. The Insultex House Wrap was designed to specifically add enhanced insulating characteristics. In addition, the House Wrap is priced competitively with existing house wraps that do not provide any insulation. The development efforts were conducted by our own personnel and an outside consultant. In December 2016, we temporarily suspended any advertising for our House Wrap product line as we were in litigation with the Federal Trade Commission (“FTC”). The litigation has concluded as to the matters set forth in the FTC complaint and in March 2021, we resumed advertising for our House Wrap products.

Insultex House Wrap

During our last fiscal year, ~~two~~the following customers each accounted for more than ten percent of our total sales of our House Wrap product, A-Team Building Supplies, LLC (4130.09%), ~~and~~NorthStar Systembuilt ~~Jerry’~~(19.1%) ~~Home~~and ~~Improvement Center~~Compound Construction (10.2%).

Competition

Many companies offer a type of house wrap, some with insulating properties. These companies have large operations and are well financed. Some of the larger companies are DuPont, and Kimberly Clark. The Company expects to face intense competition with others who have much greater resources in the building construction supply industry.

Our marketing program consists of the following:

MARKETING COMPONENT

Website Development and Internet Marketing

We contract with marketing consultants to:

(a) increase visitation to our website.

(b) link with other established websites.

(d) conduct banner advertising.

(e) develop arrangements with online retailers that purchase our products on a wholesale basis.

Sales Representatives

Our Vice President of sales and marketing works to:

(a) sell our merchandise to retail chain stores.

(b) initiate relationships with local and national recreational organizations; and

Contract with Manufacturer

We utilize the services of sales agencies to represent our products in the United States and Canada.

Design and Develop

We presently use our own staff for services related to literature, displays, develop brochures, point-of-sale displays, mailers, media materials, and literature and sales tools for our sales representatives and manufacturer representatives. At such time as we have sufficient funding, we intend to contract out some of these services. We no longer manufacture the R-3 House Wrap.

Establish Wholesale

We are and continue to develop relationships or distribution relationships with retail points for our products to retail chain outlets and mass merchandisers to sell our products. We currently have five domestic distributors and one international. Each distributor has a certain territory. Our domestic distributors collectively cover the following jurisdictions;: Texas, Oklahoma, Louisiana, North and South Dakota, Minnesota, Iowa, Michigan, Ohio, Pennsylvania, New York, West Virginia, Maryland and Virginia. Our international distributor territory covers the UK, EU the Commonwealth countries except for Canada and Africa.

We ship wholesale product orders by United Parcel Service or trucking companies. Retail orders from our website are shipped United Parcel Ground Service or Federal Express overnight. The costs of shipping our finished goods are paid by our customers. We have not instituted any formal arrangements or agreements with United Parcel Service, Federal Express or trucking companies, and we do not intend to do so.

Insultex is used in all our Arctic Armor finished goods, except for our headwear.

Any apparel inventory we maintain is stored at our warehousing facility. Our warehouse facility has the capacity to hold 250,000 units of finished products in inventory. Our House Wrap inventory is stored in our facility and in the facility that manufactures it.

In 2004, we were granted a trademark for our name “idigear” with the United States Patent and Trademark Office.

In 2007, we were granted the mark “Insultex” by the United States Patent and Trademark Office.

In 2011, we were granted a trademark for “Insultex House Wrap” by the United States Patent and Trademark Office.

8The Company has rights under a U.S Patent titled “Composite Fabric Material and Apparel Made Therefrom” which issued April 30, 2013.

The Company has rights under a U.S Patent tiled “Composite Fabric Material and Apparel Made Therefrom” which issued April 30, 2013.

The Company has rights under a U.S. Paten titled “Composite Materials” which issued February 21, 2017, published on September 5, 2013.

The Company caused to have filed a utility ~~paten~~ patent application on December 18, 2009, titled “Composite House Wrap” which claimed priority to provisional patent application titled “Composite House Wrap” on December 18, 2008. A patent application was published on June 24, 2010. Although no patent issued from this original disclosure, this publication prevents third parties from patenting concepts obvious over these original teaching of the Company.

The Company caused to have filed a utility patent application on May 31, 2017, titled “Process for Forming Closed Cell Expanded Low density Polyethylene Foam and Products Formed Thereby”, published January 24, 2018.. The Company then caused to have filed a utility patent application on July 31, 2020, which application was published February 11, 2021. In January 2023, the U.S Patent and Trademark Office issue a Notice of Allowance and a patent shall issue in due course.

Additional patent ~~applications~~application oon other property concepts are also being ~~pursued,~~ planned.

Our production costs are limited to the invoices we receive for Insultex from Ketut Group and our House Wrap product from the manufacturer.

Although we are not aware of the need for any government approval of our principal products, we may be subject to such approvals in the future.

United States and foreign regulations may subject us to increased regulation costs, and possibly fines or restrictions on conducting our business. We are subject, directly or indirectly, to governmental regulations pertaining to the following government agencies:

United States Customs Service

We are required to pay a 6.5% importation duty to the United States Customs Service on all imported products. We import Insultex from Indonesia from the Ketut Group, in accordance with our agreement with the Ketut Group.

United States Department of Labor’s Occupational Safety and Health Administration

Because our sub-manufacturers manufacture our completed products, we and our sub-manufacturers will be subject to the regulations of the United States Department of Labor’s Occupational Safety and Health Administration.

We are not aware of any governmental regulations that will affect the Internet aspects of our business. However, due to increasing usage of the Internet, a number of laws and regulations may be adopted relating to the Internet covering user privacy, pricing, and characteristics and quality of products and services. Furthermore, the growth and development of Internet commerce may prompt more stringent consumer protection laws imposing additional burdens on those companies’ conducting business over the Internet. The adoption of any additional laws or regulations may decrease the growth of the Internet, which, in turn, could decrease the demand for Internet services and increase the cost of doing business on the Internet. These factors may have an adverse effect on our business, results of operations, and financial condition.

Moreover, the interpretation of sales tax, libel, and personal privacy laws applied to Internet commerce is uncertain and unresolved. We may be required to qualify to do business as a foreign corporation in each such state or foreign country. Our failure to qualify as a foreign corporation in a jurisdiction where we are required to do so could subject us to taxes and penalties. Any such existing or new legislation or regulation, including state sales tax, or the application of laws or regulations from jurisdictions whose laws do not currently apply to our business, could have a material adverse effect on our business, results of operations and financial condition.

We currently have no costs associated with compliance with environmental regulations. Because we do not manufacture our products, but rather they are manufactured by our sub-manufacturers, we do not anticipate any costs associated with environmental compliance. Moreover, the delivery and distribution of our products will not involve substantial discharge of environmental pollutants. However, there can be no assurance that we will not incur such costs in the future.

We estimate that all of our revenues will be from the sale of our products. We will sell our products at prices above our original cost to produce our products. We expect our product prices to be lower than network marketing companies, but higher compared with retail establishments that directly manufacture their own products.

Products that are sold directly by our website will be priced according to our Manufacturer Suggested Retail Prices. Our wholesale clients will purchase our products at our wholesale prices. We recommend that our retailer clients sell our products at the Manufacturer Suggested Retail Prices that we provide to them which are the same prices for products on our website; however, they are not required to do so and may price our products for retail sale at their discretion. We have established M.A.P. (minimum advertised pricing) on our Arctic Armor™ suit in an attempt to allow all retailers and distributors carrying the line to obtain reasonable gross margin dollars.

We currently have a total of two full time employees. We hire part-time personnel as needed.

We have no collective bargaining or employment agreements.

Reports and Other Information to Shareholders

We are subject to the informational requirements of the Securities Exchange Act of 1934. Accordingly, we file annual, quarterly and other reports and information with the Securities and Exchange Commission. You may read and copy these reports and other information we file at the Securities and Exchange Commission’s public reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois. Our filings are also available to the public from commercial document retrieval services and the Internet worldwide website maintained by the Securities and Exchange Commission at www.sec.gov.

ITEM 1A

RISK FACTORS.

Lack of Sufficient Operating Funds-Going Concern

Our independent registered public accounting firm for the fiscal year ended October 31, ~~2022~~2023, has included an explanatory paragraph in their opinion that accompanies our audited financial statements for the fiscal year ended October 31, ~~2022~~2023, indicating that as a result of the Company having had net losses and negative cash flows and an accumulated deficit there is substantial doubt about the Company’s ability to continue as a going concern. Because we are not able to generate sufficient funds from sales and because we are unable to access commercial sources of credit, we are consistently underfunded. As a result, our growth is very limited, and we have difficulty in sustaining our current level of operations. We are not able to initiate adequate marketing programs, hire additional staff, develop new products or have flexibility in ordering Insultex from our manufacturer. Additionally, we must replace our quality control testing equipment for our House Wrap product line which we estimate may cost $100,000.. In the past, we have depended on borrowings from our CEO and other private parties, primarily stockholders in the ~~private~~ private sale of our common stock or debt. Should we not be able to continue to rely on these sources of funding and increase our revenue ~~stream~~ stream to at least meet our current level of operations and to purchase new testing equipment the ability of the Company to continue as a going concern will be adversely affected.

Competition

The markets served by the Company are highly competitive. Competitive pricing pressure could result in loss of customers or decreased profit margins. Competition by product type includes the following:

The markets for our products are increasingly competitive. Our competitors have substantially longer operating histories, greater brand name and company name recognition, larger customer bases and greater financial, operating, and technical resources than us. Because we are financially and operationally smaller than our competitors, we will encounter difficulties in capturing market share. Our competitors are able to conduct extensive marketing campaigns and create more attractive pricing of their target markets than we are.

Some of our biggest competitors for our House Wrap product line are;

	●	Dupont

	●	Kimberly Clark.

Some of our biggest competitors in the Arctic Armor™ line are:

	●	Ice Clam Corporation

	●	Vexilar

	●	Mustang Survival

	●	Frabill

	●	Stryker

We compete in the following ways:

A.	Emphasize the Advantages of our Products.

Arctic Armor Line

We emphasize the following characteristics and advantages of our Arctic Armor line products:

	●	light weight

	●	waterproof

	●	windproof

	●	sub-zero protection

	●	buoyancy

Insultex provides a scent barrier which we had a permeation test performed on at the Texas Research Institute Austin, Inc. The product was subjected to gas stimulant for an eight-hour period. The product was tested for permeation of the gas every three minutes for the duration of the test with almost no detection of the gas throughout the test. The testing was based upon accepted industry practices as well as the test method used.

HOUSE WRAP

Our House Wrap product

	●	Utilize our web site to promote, market, and sell our products to consumers.

	●	Utilize professional sales representatives, distributors and manufacturer representatives to sell our products to established retailers, contractors and end users.

Our products have the following disadvantages in comparison to the products of our competitors:

●

Lack of brand name recognition or recognition of the properties of Insultex and its advantages. We, as well as our products, have little brand name recognition compared to our competitors. And we may encounter difficulties in establishing product recognition. Also, although our products have insulation properties, the material “down” has a widespread and established reputation as being the superior insulation in the market, while the properties and advantages of Insultex has little public recognition.

There can be no assurance that we will be able to compete in the sale of our products, which could have a negative impact upon our business.

We do not expect our business to be dependent on one or a few customers or retailers; however, there is no assurance that we will not become so dependent.

Cyclicality

The Company’s Arctic Armor apparel sales fluctuate based on temperature and weather conditions. Our products are suitable primarily for cold weather conditions. This will ~~cause~~have a cyclical effect on sales. It also makes our revenues totally dependent on cold weather for this product line. For the fiscal year ended October 31, ~~2022~~2023, our cold weather products accounted for approximately 2510% of our total revenue.

Material Acquisition

The Company has only one supplier of Insultex, the special material which is manufactured within the apparel of our cold weather products and our House Wrap product. Additionally, we have one manufacturer that produces the apparel on behalf of the Company, located in Indonesia. Currently, we are only selling apparel from our inventory. Any delays in getting Insultex will adversely affect our revenue stream. Once we have our own equipment operating, we will be able to produce Insultex. We intend to use such Insultex for our House Wrap product.at the present time.

Geographic Concentration

Most of the Company’s sales for its cold weather clothing products to retailers are concentrated in colder climates of the United States and Canada. ~~To the extent that any regional economic downturn impacts these regions, the Company will be adversely affected.~~

Management

The Company is dependent on the management of Joseph Riccelli, our Chief Executive Officer. The loss of Mr. Riccelli’s services could have a negative effect on the performance and growth of the Company for some period of time.

Penny Stock Considerations

Our shares are “penny stocks” as that term is generally defined in the Securities Exchange Act of 1934 as equity securities with a price of less than $5.00. Our shares may be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.

Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or “accredited investor” must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth, exclusive of one’s residence, in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with his or her spouse is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:

	●	Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;

	●	Disclose commissions payable to the broker-dealer and its registered representatives and current bid and offer quotations for the securities;

	●	Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and

	●	Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account.

13Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our stock, which may affect the ability of shareholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities if our securities become publicly traded. In addition, the liquidity of our securities may be adversely affected, with a corresponding decrease in the price of our securities.

Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our stock, which may affect the ability of shareholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities if our securities become publicly traded. In addition, the liquidity for our securities may be adversely affected, with a corresponding decrease in the price of our securities.

ITEM 1B

Unresolved Staff Comments.

None.

ITEM 1C

Cybersecurity

We do not maintain any information systems that would be subject to a cybersecurity threat. Our credit card processing is outsourced to a third party that uses a double authentication protocol.

ITEM 2.

PROPERTIES.

We lease warehouse space for our inventory and raw materials at 124 Cherry Street, Etna, Pennsylvania. We also use this space as our principal executive offices. This facility encompasses 13,000 square feet of storage space on the first floor and 2,000 square feet for our sales department offices located on the second floor. We have entered into a verbal agreement with the owner of the building, and we pay $3,500 per month for the space. This facility is composed of: (a) warehouse and storage areas including four (4) shipping bays and a distribution area consisting of square footage to store upward of 250,000 finished goods products; and (b) four (4) offices, one (1) conference room, with presentation area and sample display and (2) bathrooms totaling approximately 2,000 square feet located on the second floor. Mr. Frank Riccelli is the brother to our Chief Executive Officer and the owner of the property. The condition of our leased property is good and suitable for our needs.

ITEM 3. LEGAL PROCEEDINGS. See Note 1315 of the Notes to Financial Statement appearing elsewhere in this Report.

ITEM 4. ~~REMOVED AND RESERVED~~.

1411

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our Common Stock is traded on the OTCQB tier under the symbol IVDN. As of ~~January~~February 3012, ~~2023~~2024, we had 249 holders of record of our common stock (not including beneficial holders of stock held in street names).

We have one class of stock outstanding. We have no shares of our preferred stock outstanding.

Dividends

We have not declared any cash dividends on our stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payment of dividends will depend on our earnings and financial position and such other factors as the Board of Directors deems relevant.

Recent Sales of Unregistered Securities.

On October 5, 2022, we issued 125,000 shares of our Common Stock to a marketing consultant for services.

Subsequent to the period we sold 500,000 Units to one investor in a private placement and received $110,000 in proceeds. Each Unit contained one share of Common Stock and one common stock purchase warrant. The warrant has a term of two years with an exercise price of $.45. The common stock also has piggy-back registration rights for one year. Each Unit cost $. 22.

The Company relied in Section 4(2) of the Securities Act of 1933, as amended and Regulation D, Rule 506 (c) promulgated thereunder. The securities are “restricted securities” as that term is defined under the Securities Act and each stock certificate bears a legend restricting their transferability.

ITEM 6.

SELECTED FINANCIAL DATA.

As a smaller reporting company, under SEC regulations, we are not required to furnish selected financial data.

ITEM 7.

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 appearing elsewhere in this report.

Disclosure Regarding Forward-Looking Statements

Certain statements made in this report, and other written or oral statements made by or on behalf of the Company, may constitute “forward-looking statements” within the meaning of the federal securities laws. When used in this report, the words “believes,” “expects,” “estimates,” “intends,” and similar expressions are intended to identify forward-looking statements. Statements regarding future events and developments and our future performance, as well as our expectations, beliefs, plans, intentions, estimates, or projections relating to the future, are forward-looking statements within the meaning of these laws. Examples of such statements in this report include descriptions of our plans and strategies with respect to developing certain market opportunities, and our overall business plan. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected we believe that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. We undertake no obligations to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.

Background

Innovative Designs, Inc. (hereafter referred to as the “Company”, “we” or “our”) produces and sells a house wrap product using Insultex a material with thermal resistance and buoyancy properties. We also offer a cold weather product line called “Artic Armor” which also uses Insultex. We no longer produce any Artic Armor products. We are only selling ~~form~~from our existing inventory. We obtain Insultex through a license agreement with the owner and manufacturer of the material. In December 2015, we took delivery of equipment capable of producing our own Insultex. At such time as we have sufficient funding, we intend to put the equipment into production and use the Insultex from ~~this~~ this equipment in the production of our House Wrap product and for the sale of Insultex to others.

Results of Operations

Comparison of the fiscal year ended October 31, 2022, with the fiscal year ended October 31, 2021.

The following table shows a comparison of the results of operations between the fiscal years ended October 31, ~~2022~~2023, and October 31, ~~2021~~2022:

	Fiscal Year						Fiscal Year
	Ended						Ended
	October 31,			% of			October 31,			% of			Increase			%
	2022			Sales			2021			Sales			(Decrease)			Change
	2023			Sales			2022			Sales			(Decrease)			Change
REVENUE	$	~~258~~347,~~734~~763			100.00	%	$	~~225~~258,~~601~~734			100.00	%	$	3389,~~133~~029			1525.6	%
OPERATING EXPENSES
Cost of sales		~~118~~167,~~997~~788			4648.2	%		96146,~~728~~912			4356.8	%		22(20,~~269~~876	)		2312.4	%
Selling, general and administrative expenses		~~666~~464,~~239~~065			~~257~~133.47	%		~~411~~666,~~716~~239			~~182~~257.5	%		~~254~~(202,~~523~~174	)		62(43.6	)%
		785,236			-303	%		508,444			225	%		276,792			54	%
Total operating expenses		631,853			55	%		813,151			225	%		276,792			54	%
Loss from operations		(~~526~~284,~~502~~090	)		~~-203~~(81.7	)%		(~~282~~554,~~843~~417	)		~~-125~~214.3	%		(~~243~~270,~~659~~327	)		86(95.2	)%
OTHER INCOME/(EXPENSE)
Other income		~~371,000~~—			~~143~~	%	$	33371,~~652~~000			15100.0	%		~~337~~(371,~~348~~000	)		~~1002~~100	%
Interest expense		(4224,~~072~~807	)		~~-16~~(7.1	)%		(4942,~~112~~072	)		~~-22~~16.3	%		7(66,~~040~~879	)		~~-14~~(269.6	)%
Loss on disposal of equipment		-0-			0	%		(24,429	)		-11	%		(24,429	)		100	%
Gain (Loss) on sale of property and equipment		7,519							)						)
Net loss	$	(~~197~~301,~~574~~378	)		~~-76~~(86.7	)%	$	(~~322~~225,~~732~~489	)		~~-143~~(87.2	)%	$	~~125~~(75,~~158~~889	)		~~-39~~25.2	%
Weighted average common shares outstanding - undiluted		3435,~~650~~487,~~560~~572						3234,~~263~~650,560
Loss per common share - undiluted	$	(0.01	)				$	(0.01	)

Results of Operations

Revenues for the fiscal year ended October 31, ~~2022~~2023, were $ ~~258~~347,~~734~~763 compared to revenues of $~~225~~258,~~601~~734 for the comparable period ending October 31, ~~2021~~2022. House Wrap product revenue totaled $ ~~193~~312,~~302~~983 for the period compared to $~~169~~193,~~375~~302 for fiscal year ended October 31, 2022. ~~Nearly~~All ~~all~~ of the remaining revenues were derived from our Arctic Armor and related product lines which totaled $6534,~~432~~780 for the period compared to revenues of $~~56,226~~65.432 for the fiscal year ~~ended~~ ended October 31, ~~2021~~2022. Revenues are net of returns and discounts. We continue to work on rebuilding our House Wrap product line brand ~~after~~ after doing no advertising during the time of the FTC litigation, November 2016 to July 2021, and the effect of the litigation on our ~~House~~ House Wrap products acceptance, and the use of Insultex in other applications in the marketplace.

~~Selling~~However, ~~general~~until ~~and~~we ~~administrative~~are ~~expense~~able ~~increased from $411,716 in fiscal year 2021,~~ to ~~$666,239~~have inInsultex ~~the~~ICC-ES certified ~~fiscal~~we ~~year~~do ~~ending~~not ~~October~~believe ~~31,~~we ~~2022.~~will ~~This~~be ~~increase~~able ~~reflects,~~to insignificantly ~~part, $53,000 more for advertising and marketing, a payroll~~ increase ofour ~~$75,000,~~revenue afrom ~~reinstatement fee of $14,000 for listing on the OTCQB and stock base compensation to~~ our ~~directors~~House ofWrap ~~$71,000 and $75,000 in stock based compensation to a marketing consultant~~product. ~~Profession fees decreased during the period by $17,000 as the FTC litigation wound down.~~

~~Our~~Selling, ~~cost~~general ofand ~~sales~~administrative ~~increased~~expenses decreased from $96666,~~728~~339 asin offiscal year 2022, to $464,065 in the fiscal year ending October 31, ~~2021~~2023. This decrease reflects, toin part, a decrease in stock-based compensation of $~~118~~200,~~997~~000, professional fees decreased by $,9,000, payroll decreased by $18,000 and office supplies decreased asby $8,000. Some of ~~October~~the 31increases were travel expenses increased by $17,000, ~~2022~~shipping costs increased by $8,000, product testing increased by $8,000 and sales commission increased by $5,000.

Our cost of sales increased from $146,912 as of October 31, 2022, to $16,00 as of October 31, 2023, as a result of more sales.

Liquidity and Capital Resources

During the fiscal year ended October 31, ~~2022~~2023, we funded our operations from revenues, ~~a legal settlement~~ and the private sales of our common stock. ~~During~~and the ~~period,~~exercise weof certain common stock purchase warrants. We received a total of $~~260~~355,000 from athe ~~settlement~~sale ~~with~~of ~~the~~stock ~~FTC~~and ~~for~~warrant ~~legal~~exercise. ~~fees~~During ~~incurred~~the inperiod ~~connection~~we ~~with~~repaid ~~the~~advances ~~FTC~~from ~~litigation~~stockholders totaling $107,630. Subsequent to the period, we receive proceeds totaling $~~110~~ 218,~~000~~ 831 from the sale of our ~~Common~~common ~~Stock~~stock. We will continue to fund our operations from revenues, private borrowings and the sale of our common stock until we are able to produce sales sufficient to cover our cost structure or to secure commercial lending arrangements.

On July 12, 2015, the Company reached an agreement with Ketut Jaya to purchase 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 be made after the first commercial production run of INSULTEX is completed. As of October 31, 2016, the Company has made payments of $600,000. In addition to the final payments, the Company will have to have the equipment and machines installed and ensure that the machine can be operated in compliance with environmental regulations. The Company has not made an estimate of the costs required for bringing the machine into compliance, but it is considered to be substantial. Given the expected time and cost of bringing the equipment into production mode and our current financial condition we are unable to estimate when we will be able to do so.

We also must purchase new quality control testing equipment for ~~our~~use ~~House~~in ~~Wrap~~testing ~~product~~Insultex. ~~line~~The ~~which~~testing equipment is finished, and we ~~estimate~~are ~~will~~in ~~cost~~discussions ~~approximately~~with ~~$100,000~~the vendor regarding certain charges. ~~However,~~Once we ~~have~~take ~~not~~delivery asof ~~yet~~the ~~received~~equipment it will have to go through a ~~quote~~certification process. Once the testing equipment is certified, ~~from~~we intend to begin the ~~vendor.~~process Weof ~~have~~having ~~placed~~Insultex acertified $7by ICC Evaluation Services,~~000~~ ~~deposit~~LLC ~~with~~(“ICC-ES”). ~~the~~ICC-ES ~~vendor~~certifies, among other items, building materials and products of which our House Wrap falls under. ~~Once~~The ~~the~~reason ~~equipment~~we need to have ICC-ES certification is ~~built~~that itwe ~~will~~believe ~~have~~in order to goget ~~through~~large aorders for House Wrap ICC-ES certification will be required. The other component part of the ~~process~~House Wrap produced by a third party is ICC-Es certified. Getting ICC-ES certification is costly and time consuming.

During the period we paid $~~144,666~~{Amount} on our loans. Subsequent to the period we paid an additional $[Amount} on the loans.

Short Term: We funded our operations with revenues from sales, private sales of our common stock and from a legal settlement. We could not access commercial lines of credit during our last fiscal year.

18The Company intends to repay these debt obligations with funds it generates from revenues, from the possible sale of its securities, either debt or equity, from advances from our stockholders or others. Because we cannot currently access commercial lending facilities, should we not be able to continue to obtain funding from these sources should our revenues decrease, our operations would be severely affected as we would not be able to fund our purchase orders to our suppliers for finished goods. The Company continues to pay its creditors when payments are due.

The Company intends to repay these debt obligations with funds it generates from revenues, from the possible sale of its securities either debt or equity, from advances from our stockholders or others. Because we cannot currently access commercial lending facilities, should we not be able to continue to obtain funding from these sources should our revenues decrease, our operations would be severely affected as we would not be able to fund our purchase orders to our suppliers for finished goods. The Company continues to pay its creditors when payments are due.

Long Term: The Company will continue to fund operations from revenues, borrowings and the possible sale of its securities. Should we not be able to continue to rely on these sources our operations would be severely affected as we would not be able to fund our purchase orders to our suppliers for finished goods.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

As a smaller reporting company under SEC Regulation, we are not required to provide this information.

ITEM 8.

FINANCIAL STATEMENTS.

1914

~~INDEX~~INNOVATIVE DESIGNS, ~~TO FINANCIAL STATEMENTS~~INC.

Report of Independent Registered Public Accounting Firms	F-2
Financial Statements:
Balance Sheets as of October 31, 2022 and 2021	F-4
Statements of Operations for the Years Ended October 31, 2022 and 2021	F-5
Statements of Changes in Stockholders’ Equity for the Years Ended October 31, 2022 and 2021	F-6
Statements of Cash Flows for the Years Ended October 31, 2022 and 2021	F-7
Notes to Consolidated Financial Statements	F-8

FINANCIAL STATEMENTS
FOR THE FISCAL YEARS ENDED

OCTOBER 31, 2023 AND 2022

F-1

TABLE OF CONTENTS

	PAGE

FINANCIAL STATEMENTS:

Report of Registered Public Accounting Firm	F-3

BALANCE SHEETS	F-5

STATEMENTS OF OPERATIONS	F-6

STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY	F-7

STATEMENTS OF CASH FLOWS	F-8

NOTES TO FINANCIAL STATEMENTS	F-9

F-2

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Innovative Designs, Inc.

Board of Directors of Innovative Designs, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Innovative Designs, Inc. (the Company) as of October 31, ~~2022~~2023 and ~~2021~~2022, the related statements of operations, changes in stockholders’ equity and cash flows, for each of the years in the two year period ended October 31, ~~2022~~2023, and the related notes (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as October 31, ~~2022~~2023 and ~~2021~~2022, and the results of its operations and its cash flows for each of the years in the two-year period ended October 31, ~~2022~~2023, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that that Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company had net losses and negative cash flows from operations for the years ended October 31, ~~2022~~2023 and ~~2021~~2022 and an accumulated deficit at October 31, ~~2022~~2023 and ~~2021~~ 2022. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance date of these financial statements. Management’s plans are described in Note 2. Our procedures included an evaluation of management’s plans to continue as a going concern and a conclusion as to whether management’s plans appear reasonable and achievable. The financial ~~statements~~ statements do not include adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the ~~responsibility~~ responsibility of the Company'’s management. Our responsibility is to express an opinion on the Company'’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight ~~Board~~ Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities ~~laws~~ laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

400 Old Forge Lane	Phone: 610-713-8208
Suite 401	Fax: 610-807-0370
Kennett Square, PA 19348-1914	www.rwgroupllc.com

F-3

F-2

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition

Critical Audit Matter Description

The Company’s recognition of revenue involves the evaluation against five criteria described by generally accepted accounting principles. With regards to the Company’s transaction classes the primary criteria is the satisfaction of their performance obligations.

How the Critical Audit Matter Was Addressed in the Audit

Our procedures related to the Company meeting their performance obligations included evaluation of initial sale transaction documentation, shipping records, and invoices.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

Critical Audit Matter Description

Due to the financial position and results of cumulative losses the Company evaluates it ability to continue as a going concern and has a plan in place to be able to conclude that it will be able to continue as a going concern for one year from the issuance date of the financial statements.

How the Critical Audit Matter Was Addressed in the Audit

Our procedures included an evaluation of management’s plans to continue as a going concern and a conclusion as to whether management’s plans appear reasonable and achievable.

RW Group, LLC

We have served as the Company'’s auditor since 2021.

Kennett Square, PA

February 1322, ~~2023~~2024

5020

F-3

INNOVATIVE DESIGNS, INC. BALANCE SHEETS OCTOBER 31, 2022 AND 2021

	October 31,
	2022			2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	263,293		$	480,451
Accounts receivable - net of allowance for doubtful accounts of $5,860		11,203			1,201
Inventory - net of obsolete inventory reserve of $75,468		494,580			542,588
Current portion of right of use asset		—			40,962
Total current assets		769,076			1,065,202
PROPERTY AND EQUIPMENT - NET		5,960			7,450
OTHER ASSETS
Inventory on consignment		1,625			1,625
Advance to employees		13,200			8,200
Deposits on inventory		80,000			—
Deposits on equipment		607,370			600,000
Total other assets		702,195			609,825
TOTAL ASSETS	$	1,477,231		$	1,682,477
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	162,063		$	228,667
Current portion of notes payable		20,128			18,628
Current portion of lease liability		—			40,962
Accrued interest expense		46,345			43,136
Due to stockholders		110,631			188,632
Accrued expenses		3,778			25,037
Total current liabilities		342,945			545,062
LONG-TERM LIABILITIES
Long-term portion of due to stockholders		66,667			133,332
Long-term portion of notes payable		64,547			71,722
Total long-term liabilities		131,214			205,054
TOTAL LIABILITIES		474,159			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 34,650,560 and 33,315,560 issued and outstanding		3,467			3,333
Additional paid-in capital		11,335,184			11,039,118
Accumulated deficit		(10,335,579	)		(10,110,090	)
Total stockholders' equity		1,003,072			932,361
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,477,231		$	1,682,477

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

F-4

INNOVATIVE DESIGNS, INC. ~~STATEMENTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 31, 2022 AND 2021~~

	2022			2021
REVENUES - NET	$	258,734		$	225,601
OPERATING EXPENSES:
Cost of sales		146,912			96,728
Selling, general and administrative expenses		666,239			411,716
Total Operating Expenses		813,151			508,444
LOSS FROM OPERATIONS		(554,417	)		(282,843	)
OTHER INCOME (EXPENSE)
Other income		371,000			33,652
Loss on disposal of equipment		—			(24,429	)
Interest expense		(42,072	)		(49,112	)
Total other income (expense)		328,928			(39,889	)
NET LOSS	$	(225,489	)	$	(322,732	)
PER SHARE INFORMATION - UNDILUTED
Net Loss Per Common Share	$	(0.01	)	$	(0.01	)
Weighted Average Number of Common Shares Outstanding		34,650,560			32,263,560
PER SHARE INFORMATION - FULLY DILUTED
Net Loss Per Common Share	$	(0.01	)	$	(0.01	)
Weighted Average Number of Common Shares Outstanding		35,330,560			32,313,560

BALANCE SHEETS

OCTOBER 31, 2023 AND OCTOBER 31, 2022


	2023			2022

ASSETS

CURRENT ASSETS:
Cash	$	238,677			263,293
Accounts receivable, net		31,050			11,203
Inventory, net		549,277			494,580

Total current assets		819,004			769,076

PROPERTY AND EQUIPMENT, net		23,479			5,960

OTHER ASSETS:
Inventory on consignment		—			1,625
Deposits on inventory		—			80,000
Advance to employees		8,200			13,200
Deposits on equipment		652,944			607,370

Total other assets		661,144			702,195

TOTAL	$	1,503,627		$	1,477,231

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	216,626		$	162,063
Current portion of note payable		20,397			20,128
Accrued interest on stockholder loans		42,873			46,345
Current portion of stockholder loans		70,668			110,631
Accrued expenses		—			3,778

Total current liabilities		350,564			342,945

LONG-TERM LIABILITIES:
Long-term portion of note payable		44,429			64,547
Long-term portion of stockholder loans		—			66,667

Total long-term liabilities		44,429			131,214

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 36,532,560 and 34,650,560 issued and outstanding		3,656			3,467
Additional paid-in capital		11,741,935			11,335,184
Accumulated deficit		(10,636,957	)		(10,335,579	)

Total stockholders' equity		1,108,634			1,003,072

TOTAL	$	1,503,627		$	1,477,231

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

F-5

INNOVATIVE DESIGNS, INC. ~~STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED OCTOBER 31, 2022 AND 2021~~

	Common Stock				Common Stock		Additional Paid-in		Accumulated
	Shares		Amount		To be Issued		Capital		Deficit			Total
Balance at October 31, 2020		31,211,560	$	3,123	$	—	$	10,574,828	$	(9,787,358	)	$	790,593
Shares issued for services		770,000		77				130,923				$	131,000
Sale of stock		1,334,000		133		—		333,367		—		$	333,500
Net loss		—		—		—		—		(322,732	)	$	(322,732	)
Balance at October 31, 2021		33,315,560		3,333		—		11,039,118		(10,110,090	)	$	932,361
Shares issued for services		875,000		88				209,912					210,000
Sale of stock		460,000		46		—		86,154		—			86,200
Net loss		—		—		—		—		(225,489	)		(225,489	)
Balance at October 31, 2022		34,650,560	$	3,467	$	—	$	11,335,184	$	(10,335,579	)	$	1,003,072

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022


	2023			2022

REVENUES, net	$	347,763		$	258,734

OPERATING EXPENSES:
Cost of sales		167,788			146,912
Selling, general and administrative expenses		464,065			666,239

Total operating expenses		631,853			813,151

Income (loss) from operations		(284,090	)		(554,417	)

OTHER INCOME (EXPENSE):
Miscellaneous income (expense)		—			371,000
Gain (loss) on sale of property and equipment		7,519			—
Interest expense		(24,807	)		(42,072	)

Total other income (expense)		(17,288	)		328,928

Net income (loss)	$	(301,378	)	$	(225,489	)

PER SHARE INFORMATION - UNDILUTED:
Net income (loss) per common share	$	(0.01	)	$	(0.01	)

Weighted average number of common shares outstanding		35,487,572			34,650,560

PER SHARE INFORMATION - DILUTED:
Net income (loss) per common share	$	(0.01	)	$	(0.01	)

Weighted average number of common shares outstanding		36,529,252			35,330,560

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

F-6

INNOVATIVE DESIGNS, INC. ~~STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED OCTOBER 31, 2022 AND 2021~~

	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(225,489	)	$	(322,732	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of equipment		—			24,429
Write off of accounts payable		(111,000	)		—
Common stock issued for services		210,000			131,000
Depreciation		1,490			33,308
Amortization of right of use asset		40,962			38,775
(Increase) decrease from changes in:
Accounts receivable		(10,002	)		18,699
Inventory		48,008			34,197
Deposits on inventory		(80,000	)
Increase (decrease) from changes in:
Accounts payable and accrued expenses		23,137			(31,641	)
Accrued interest expense		3,209			27,389
Net cash used in operating activities		(99,685	)		(46,576	)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in advances to employees		(5,000	)		—
Increase in deposts on equipment		(7,370	)		—
Net cash used in investing activities		(12,370	)		—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock		86,200			333,500
Proceeds from stockholder loans		—			250,000
Forgivness from loans		—			(33,652	)
Payments on stockholder loans		(144,666	)		(29,797	)
Payments on lease liability		(40,962	)		(38,775	)
Proceeds on notes payable		1,818			—
Payments on notes payable		(7,493	)		(2,258	)
Net cash (used in) provided by financing activities		(105,103	)		479,018
Net (decrease) increase in cash		(217,158	)		432,442
CASH, BEGINNING OF YEAR		480,451			48,009
CASH, END OF THE PERIOD	$	263,293		$	480,451
Supplemental disclosure of cash flow information:
Cash paid for interest	$	38,863		$	21,723
Non-cash financing activities - forgivness of debt	$	—		$	33,652
Non-cash investment activities - common stock issue for services	$	210,000.00		$	131,000.00
Cash paid for taxes	$	—		$	—

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022


	Common 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		460,000		46		—		86,154		—			86,200

Exercise of warrants		—		—		—		—		—			—

Shares issued for services		875,000		88		—		209,912		—			210,000

Net income (loss)		—		—		—		—		(225,489	)		(225,489	)

Balance at October 31, 2022		34,650,560		3,467		—		11,335,184		(10,335,579	)		1,003,072

Sale of stock		1,635,000		164		—		354,836		—			355,000

Exercise of warrants		40,000		4		—		9,996		—			10,000

Shares issued for services		207,000		21		—		41,919		—			41,940

Net income (loss)		—		—		—		—		(301,378	)		(301,378	)

Balance at October 31, 2023		36,532,560		3,656		—		11,741,935		(10,636,957	)		1,108,634

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

F-7

INNOVATIVE DESIGNS, INC.

~~NOTES~~CONDENSED STATEMENTS OF CASH FLOWS TOFOR THE ~~FINANCIAL~~YEARS ~~STATEMENTS~~ENDED OCTOBER 31, 2023 AND 2022

Years Ended October 31, 2022 and 2021


	2023			2022

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(301,378	)	$	(225,489	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Write off of accounts payable		—			(111,000	)
Common stock issued for services		41,940			210,000
Depreciation		3,074			1,490
Amortization of right of use asset		—			40,962
Gain on sale of asset		(7,519	)		—
(Increase) decrease from changes in:
Accounts receivable		(19,847	)		(10,002	)
Inventory		(53,072	)		48,008
Deposits on inventory		80,000			(80,000	)
Increase (decrease) from changes in:
Accounts payable and accrued expenses		50,785			23,137
Accrued interest expense		(3,472	)		3,209

Net cash provided by (used in) operating activities		(209,489	)		(99,685	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(20,593	)		—
Deposits on equipment		(45,574	)		(7,370	)
Proceeds from sale of equipment		7,519			—
Advances to employees		5,000			(5,000	)

Net cash provided by (used in) investing activities		(53,648	)		(12,370	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock		355,000			86,200
Proceeds received from the exercise of warrants		10,000			—
Payments on stockholder loans		(106,630	)		(144,666	)
Payments on lease liability		—			(40,962	)
Proceeds on notes payable		—			1,818
Payments on notes payable		(19,849	)		(7,493	)

Net cash provided by (used in) financing activities		238,521			(105,103	)

NET INCREASE (DECREASE) IN CASH		(24,616	)		(217,158	)

CASH, BEGINNING OF YEAR		263,293			480,451

CASH, END OF YEAR	$	238,677		$	263,293

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for interest	$	28,279		$	38,863

Non-cash financing activities - common stock issued for services	$	41,940		$	210,000

1.The ~~SUMMARY~~accompanying OFnotes ~~SIGNIFICANT~~are ~~ACCOUNTING~~an ~~POLICIES~~integral part of these financial statements.

Nature of Operations - Innovative Designs, Inc. (the “Company”), which was incorporated in the State of Delaware on June 25, 2002, markets cold weather recreational and industrial clothing products, as well as house wrap, which are made from INSULTEX, a low density foamed polyethylene, a material with buoyancy, scent block, and thermal resistant properties. Our clothing and housewrap is offered and sold by retailers, distributors, and companies throughout the United States and Canada.

We operate two reportable segments: Apparel and House Wrap. Our apparel segment offers a wide variety of extreme cold weather apparel and related items. Our House Wrap segment offers our INSULTEX House Wrap which has an R-value of 3 and an R-value of 6 and our own seam tape.

Basis of Accounting - The financial statements are prepared using the accrual basis of accounting in which revenues are recognized when earned and expenses are recognized when incurred.

Fiscal Year End - The Company’s fiscal year ends on October 31. The fiscal years ending October 31, 2022 and 2021 are referred to as 2022 and 2021, respectively, throughout the Company’s financial statements.

Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results may differ from these estimates and assumptions.

Cash and Cash Equivalents - The Company defines cash and cash equivalents as those highly liquid investments purchased with a maturity of three months or less.

Revenue Recognition - The Company recognizes recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive for those goods or services, including any variable consideration. Revenue is derived from sales of the Company’s recreational products, such as Arctic Armor, and our house wrap line of products. Sales of these items are recognized when the items are shipped. The Company offers a 5-day return policy and no warranty on its products. All sales outside the United States are entered into using the U.S. dollar as its functional currency.

Fair Value of Financial Instruments - The carrying value of cash and cash equivalents, accounts receivable, of these instruments. The fair value of the Company’s debt instruments approximates their fair values as the interest is tied to or approximates market rates.

Estimated Uncollectable Accounts - 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 and applied an allowance of $5,860 for the fiscal years ended October 31, 2022 and 2021.

Other Income - Management during fiscal year 2022 reevaluated certain disputed accounts payable amounts and have determined that accrued professional fees of $111,000 were not longer payable. Therefore, the Company during fiscal year 2022 have recorded it as income. In addition, the Company received $260,000 for costs recovered for defending a lawsuit. Total other income is $371,000 and $33,652 in 2022 and 2021, respectively.

F-8

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

~~Inventory - Inventory consists primarily of finished goods~~1. ~~Inventory~~NATURE isOF ~~stated~~OPERATIONS atAND ~~the~~SUMMARY ~~lower~~OF ofSIGNIFICANT ~~cost~~ACCOUNTING orPOLICIES ~~net~~NATURE ~~realizable~~OF value and is valued based on first-in-first-out. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.OPERATIONS

~~During~~Innovative Designs, Inc. (the ~~fiscal~~“Company”), ~~year~~which ~~ended~~was ~~October~~incorporated 31in the State of Delaware on June 25, ~~2010~~2002, ~~the~~markets ~~Company~~cold ~~discontinued~~weather recreational ~~its~~and ~~hunting~~industrial ~~and~~clothing ~~swimming~~products, ~~lines~~as ofwell ~~apparel.~~as Ahouse ~~reserve~~wrap, ~~balance~~which ofare ~~approximately $75~~made from INSULTEX,~~468~~ ~~was~~a ~~recorded~~low asdensity offoamed ~~October~~polyethylene, a 31material with buoyancy, ~~2022~~scent block, and ~~2021~~thermal resistant properties. The ~~reserve~~Company’s clothing and house wrap is ~~evaluated~~offered and onsold aby ~~quarterly~~retailers, ~~basis~~distributors, and ~~adjusted~~companies ~~accordingly~~throughout the United States and Canada.

~~Deposits on Inventory -~~ The Company ~~only~~operates ~~has~~two ~~one~~reportable ~~manufacturer~~segments: ~~that produces the~~ apparel onand ~~behalf~~house ~~of the Company, located in Indonesia~~wrap. The ~~Company~~apparel ~~will~~segment ~~send~~offers ~~deposits~~a towide ~~the~~variety ~~manufacturer for future production~~ of ~~the~~extreme ~~apparel~~cold ~~based on approved purchase orders between the~~weather ~~Company~~apparel and ~~the~~related ~~manufacturer~~items. ~~Once~~The ~~finished~~house ~~purchase~~wrap ~~orders~~segment ~~are~~offers ~~received by~~ the ~~Company,~~INSULTEX ~~the~~house ~~deposits~~wrap ~~associated~~which ~~with~~has ~~those~~an ~~purchase orders~~R-value ~~are~~of ~~transferred~~3 ~~into~~and ~~inventory.~~an ~~The~~R-value ~~Company has deposits~~ of ~~$80~~6,~~000~~ as ~~and~~well ~~$0 on inventory~~ as ofthe ~~October~~Company’s ~~31,~~seam ~~2022 and 2021, respectively~~tape.

~~Property~~BASIS ~~and~~OF Equipment - Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to income as incurred. Additions, improvements and major replacements are capitalized. The cost and accumulated depreciation related to assets sold or retired are removed from the accounts and any gain or loss is credited or charged to income.ACCOUNTING

~~For~~The financial ~~reporting~~statements ~~purposes,~~of ~~depreciation~~the isCompany ~~primarily~~have ~~provided~~been prepared on the ~~straight-line~~accrual ~~method~~basis ~~over~~of ~~the~~accounting ~~estimated~~and, ~~useful~~accordingly, ~~lives~~report ofall ~~depreciable~~significant ~~assets~~receivables, ~~which~~payables, ~~range~~and ~~from~~other 5liabilities toas 7prescribed ~~years~~by accounting principles generally accepted in the United States of America (“U.S. GAAP”).

~~Deposits~~FISCAL onYEAR 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 be made after the first commercial production run of INSULTEX is completed. As of October 31, 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. During 2019, the Company determined the shipping costs of $17,000 were impaired and these costs were written down.END

~~During~~The ~~2022,~~Company’s ~~the~~fiscal ~~company~~year ~~has~~ends ~~made~~on aOctober ~~separate~~31st. ~~deposit~~The onfiscal ayears ~~different~~ended ~~piece~~October of31, ~~equipment~~2023 ofand $72022 are referred to as 2023 and 2022,~~370~~ respectively, throughout the Company’s financial statements.

~~Total~~USE ~~deposits~~OF ~~on Equipment as of October 31, 2022 and 2021 were $607,370 and $600,000.~~ESTIMATES

~~Impairment~~The preparation of ~~Long-lived~~financial ~~Assets -~~statements ~~Management~~in ofconformity ~~the~~with ~~Company~~U.S. ~~considers~~GAAP ~~the~~requires ~~valuation~~management ~~and~~to ~~depreciation~~make ofestimates ~~property~~ and ~~equipment.~~assumptions ~~Management considers~~that ~~both~~ affect the ~~current~~reported ~~and~~amounts ~~future levels~~ of ~~undiscounted~~assets ~~cash~~and ~~flow~~liabilities ~~generated~~at by the ~~Company~~date ~~and~~of the ~~continuing~~financial ~~value~~statements ~~of property~~ and ~~equipment~~the toreported ~~determine~~amounts ~~when~~of revenues and expenses ifduring ~~an impairment has occurred. Any write-downs due to impairment are charged to operations at~~ the ~~time~~ ~~the~~reporting ~~impairment is identified~~period. NoActual ~~such~~results ~~write-downs~~could ~~due~~differ tofrom ~~impairment~~those ~~have been recorded in 2022 and 2021~~estimates.

CASH AND CASH EQUIVALENTS

The Company defines cash and cash equivalents as those highly liquid investments purchased with a maturity of three months or less.

F-9

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

~~Income~~REVENUE Taxes - The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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.RECOGNITION

InRevenues ~~addition,~~are ~~ASC~~measured ~~740~~based ~~clarifies~~on the ~~accounting~~amount ~~for~~of ~~uncertainty~~consideration specified in ~~tax~~a ~~positions~~contract ~~and~~with ~~requires that~~ a ~~company~~customer. ~~recognize~~The inCompany ~~its~~recognizes ~~financial~~revenue ~~statements~~when ~~the~~and ~~impact~~as ofperformance aobligations ~~tax position~~(i.e., ~~only~~obligations ifto ittransfer isgoods ~~more~~and/or ~~likely~~services) ~~than~~are ~~not of being sustained upon examination~~satisfied, ~~based~~which ongenerally ~~the~~occurs ~~technical merits of~~with the ~~position.~~transfer ~~The~~of ~~Company~~control ~~recognized~~of nothe ~~material~~goods ~~adjustments~~or services to the ~~liability for unrecognized income tax benefits~~customer.

~~The~~To ~~Company’s~~determine ~~policy~~proper ~~regarding~~revenue recognition, the ~~classification~~Company ofevaluates ~~interest~~whether two or more contracts should be combined and ~~penalties~~accounted ~~recognized~~for as ina ~~accordance~~single ~~with~~contract ~~ASC~~and ~~740~~whether isa combined or single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment, and the decision to ~~classify~~combine ~~them~~contracts or separate a combined or single contract asinto ~~income~~multiple ~~tax~~performance ~~expense~~obligations could change the amount of revenue and profit recorded in ~~its~~a ~~financial~~given ~~statements,~~period. Contracts are considered to contain a single performance obligation if ~~applicable~~the promise to transfer individual goods or services is not separately identifiable from other promises in the contracts.

~~The~~For contracts with multiple performance obligations, the Company isallocates ~~subject~~the transaction price to ~~routine~~each ~~audits~~performance byobligation ~~taxing~~using the ~~jurisdictions;~~best ~~however,~~estimate ~~there~~of ~~are~~the ~~currently~~standalone noselling ~~audits~~price ~~for~~of ~~any~~each ~~tax~~distinct ~~periods~~good or service in ~~progress~~the contract.

~~Concentration~~FAIR ofVALUE ~~Credit~~OF ~~Risk -~~FINANCIAL The Company maintains its cash and cash equivalents with a financial institution which management believes to be of high credit quality. Their accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 in coverage. The balances in these accounts may, at times, exceed the federally insured limits. The Company has not experienced any losses on the deposits and management believes the Company is not exposed to any significant credit risk related to these accounts. The Company had uninsured cash balances as of October 31, 2022 and 2021.INSTRUMENTS

~~Shipping~~The ~~and~~carrying ~~Handling -~~value ~~Shipping~~of ~~costs~~cash ~~associated~~and ~~with~~net ~~acquiring~~accounts ~~inventories~~receivable ~~are~~approximates ~~charged~~fair ~~to cost of goods sold when incurred~~value. The ~~Company pays~~fair ~~shipping~~value ~~and handling costs on behalf~~ of ~~customers for purchased merchandise. These costs are billed back to~~ the ~~customer~~Company’s ~~through~~debt instruments ~~the~~approximates ~~billing~~their ~~invoice~~fair ~~and~~values ~~are~~as ~~included in revenue at~~ the ~~time~~interest ~~the merchandise~~ is ~~shipped.~~tied ~~The~~to ~~shipping~~or ~~and~~approximates ~~handling~~market ~~costs associated with customer orders was $24,791 and $7,723 for the fiscal years ended October 31, 2022 and 2021, respectively~~rates.

~~Net~~ESTIMATED ~~Income~~UNCOLLECTIBLE Per Common Share - The Company calculates net income per share in accordance with ASC Topic 260 “Earnings per Share”. Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding for the period. In 2021, the Company issued a convertible debt instrument and has calculated diluted earnings per share.ACCOUNTS

~~Stock-Based~~Management ~~Compensation -~~evaluates ~~The~~its ~~Company~~receivables ~~accounts~~on ~~for~~a ~~stock-based~~quarterly ~~compensation~~basis into ~~accordance~~assess ~~with ASC Topic 718 “Compensation - Stock Compensation”. In accordance with~~ the ~~provisions~~validity of ~~ASC~~remaining ~~718,~~receivables. ~~share-based~~Management ~~payment~~has ~~transactions~~determined ~~with employees are measured based~~that onthere ~~the~~is ~~fair~~not ~~value~~a ofsignificant ~~the~~doubt ~~nonequity~~regarding ~~instruments issued on~~ the ~~grant~~receivable ~~date~~balance oras ~~on the fair value~~ of ~~the~~October ~~liabilities~~31, ~~incurred~~2023. ~~Share-based payments~~Management tohas ~~nonemployees~~determined ~~are~~that ~~measured~~there is ~~and~~significant ~~recognized~~doubt ~~using~~regarding the ~~fair-value~~receivable ~~method,~~balance ~~based~~over on90 ~~the~~days ~~fair~~and ~~value~~applied ofan ~~the~~allowance ~~equity instruments issued or the fair value~~ of ~~goods or services received~~$5,860 ~~whichever~~for isfiscal ~~more~~year ~~reliably~~ended ~~measured~~October 31, 2022.

OPENING AND CLOSING BALANCE OF RECEIVABLES

The opening balance of accounts receivables was $1,201 which was net of the allowance for doubtful accounts of $5,860. The ending balance of accounts receivable was $31,050. There was not an allowance for doubtful accounts at the end of the period. The Company also does not have any contract assets or contract liabilities at the end of the period.

F-10

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

Recent Accounting Standards Update – Recently, various new ASUs were issued by the FASB. Management has determined, based on their review, the following ASUs issued recently that will be applicable to the Company. Management will continue to monitor the issuance of updates throughout the year to determine if the update will have an impact on the Company’s financial statements and should it have an impact, the update will be disclosed in the notes to the financial statements.INVENTORY

InInventory ~~February~~consists ~~2016,~~primarily ~~the~~of ~~FASB~~finished ~~issued~~goods. ~~ASU~~Inventory ~~2016-02,~~is ~~“Leases”,~~stated ~~which~~at ~~added~~the alower ~~requirement~~of ~~than~~cost anor ~~entity,~~net ~~when~~realizable ~~acting~~value asand ais ~~lessee, should~~valued ~~recognize~~based on first-in ~~the balance sheet a liability to make lease payments and a right~~first-~~of-use~~out. ~~asset~~Net ~~representing~~realizable ~~its~~value ~~right~~is tothe ~~use~~estimated ~~the~~selling ~~underlying asset~~price ~~for~~in the ~~lease~~ordinary ~~term.~~course ~~For~~of ~~public~~ business ~~entities~~, ~~ASU~~less ~~2016-02~~reasonably ispredictable costs ~~effective~~of ~~for fiscal years beginning after December 15~~completion, ~~2018 including interim periods within fiscal years beginning after December 15~~disposal, ~~2019.~~and ~~Management has adopted the guidance~~transportation.

2During the fiscal year ended October 31, 2010, the Company discontinued its hunting and swimming lines of apparel. ~~GOING~~Therefore, ~~CONCERN~~a reserve of $65,600 and $75,468 was recorded as of October 31, 2023 and 2022, respectively. The reserve is evaluated on a quarterly basis and adjusted accordingly.

DEPOSITS ~~These~~ON 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 net losses of $225,489 and $322,732 and a negative cash flow from operations of $99,685 and $46,576 for the years ended October 31, 2022 and 2021, respectively. In addition, the Company has an accumulated deficit of $10,335,579. 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. Managements plans include continued sales, sales of Company stock, and borrowings from private parties. 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.INVENTORY

3The Company has one manufacturer located in Indonesia that produces the apparel on behalf of the Company. ~~RIGHT~~The OFCompany ~~USE~~sends ~~ASSETS~~deposits to ~~AND~~the ~~LEASE~~manufacturer ~~LIABILITIES~~for future production of the apparel based on approved purchase orders between the Company and the manufacturer. Once finished, purchase orders are received by the Company and the deposits associated with the purchase orders are transferred into inventory. The Company did not have deposits on inventory as of October 31, 2023. Deposits on inventory amounted to $80,000 as of October 31, 2022.

PROPERTY ~~During~~AND the quarter ended April 30, 2019, the Company implemented Accounting Standards Update 2016-02, leases. Under the new guidance, a lessee must record 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 as 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.EQUIPMENT

4Property and equipment are stated at cost. ~~PROPERTY~~Expenditures ~~AND~~for ~~EQUIPMENT~~maintenance and repairs are charged to expense as incurred. Additions, improvements, and major replacements are capitalized. The cost and accumulated depreciation related to assets sold or retired are removed from the accounts and any gain or loss is recorded on the statements of operations.

~~Property~~For ~~and~~financial ~~equipment~~reporting ~~are~~purposes, ~~summarized~~depreciation byis ~~major~~primarily ~~classifications~~computed asusing ~~follows:~~the straight-line method over the estimated useful lives of depreciable assets, which range from 5 to 7 years.

Schedule of property and equipment summarized by major classifications
	2022		2021
Equipment	$	1,500	$	1,500
Containers		14,900		14,900
Automobile		8,111		8,111
		24,511		24,511
Less accumulated depreciation		18,551		17,061
Property and equipment – net	$	5,960	$	7,450

Depreciation expense for the fiscal years ended October 31, 2022 and 2021 was $1,490 and 33,308, respectively.

F-11

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

5.DEPOSITS ON ~~BORROWINGS~~EQUIPMENT

~~Borrowings~~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 be made after the first commercial production run of INSULTEX is completed. As of October 31, ~~2022~~2018, the Company has made payments of $500,000 in accordance with the agreement and made ~~2021~~a ~~consisted~~$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 ~~following:~~equipment. During 2019, the Company determined the shipping costs of $17,000 were impaired and these costs were written off the balance due. In February 2023 and August 2023, the Company made an additional prepayment of $10,000 and $6,000, respectively, on the equipment.

Schedule of borrowings
	2022		2021
Due to Stockholders
Note Payable $8,000 - Roberta Riccelli, February 2012.
Due June 17, 2012; interest is 10% for 120 days. Note was extended through a verbal agreement with no set maturity date.	$	3,000	$	3,000
Note Payable $20,000 - Corinthian Development,
January 15, 2013. Due May 15, 2013; payable on demand; interest is 10%; Note was extended through a verbal agreement with no set maturity date.		10,000		10,000
Note Payable $36,500 - Joseph Riccelli, Sr., September 2019.
No set maturity date.		-0-		12,500
Note Payable $38,000 - Joseph Riccelli, Sr., December 2019.
Interest is 10% for 180 days; No set maturity date.		18,500		29,000
Note Payable $50,000 Antonio Costa, May 2021. Maturity date
May 2022. Interest is 8% per year. Convertible into one common shares for every $.50 of outstanding principal and interest.		-0-		50,000
Note Payable $200,000 Lawrence Fraser, December 2020
Interest is 12% per year. $66,666 is due annually until maturity at December 2023. Secured by one of the Company’s patents.		133,334		200,000
Note Payable $40,672 - Riccelli Properties, August 7, 2017.
Due February 7, 2018; interest is 10%. Note was extended through a verbal agreement with no set maturity date		12,464		17,464
Total Due to Stockholders	$	177,298	$	321,964

During the fiscal year ended October 31, 2022, the Company made deposits on a separate piece of equipment of $7,370. During the fiscal year ended October 31, 2023, the Company made additional deposits of $29,574 on this piece of equipment. Total deposits for this piece equipment as of October 31, 2023 total $36,944.

Total deposits made were $652,944 and $607,370 as of October 31, 2023 and 2022, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS

Management considers the valuation and depreciation of property and equipment. Management considers both the current and future levels of undiscounted cash flow generated by the Company and the continuing value of property and equipment to determine when and if an impairment has occurred. Any write-downs due to impairment are charged to operations at the time the impairment is identified. No such write-downs due to impairment have been recorded for the fiscal years ended October 31, 2023 and 2022.

INCOME TAXES

The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes”, which requires an asset and liability approach for financial reporting purposes.

F-12

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

	2022		2021
Note Payable - U.S. Small Business Administration.
Due July 2035; payable in monthly installments of $1,820 including interest at 2.9% annum.
	$	84,675	$	90,350
Total Borrowings		261,973		412,314
Less Due to Stockholders Current		110,631		188,630
Less Current Portion of Notes Payable		20,128		18,628
Total Long Term Portion of Notes Payable	$	131,214	$	205,056

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.

~~Maturities~~In addition, FASB ASC Topic 740 clarifies the accounting for uncertainty in tax positions and requires that a company recognize the impact of ~~long-term~~a ~~debt~~tax ~~are~~position asin ~~follows:~~its financial statements only if it is more likely than not of being sustained upon examination, based on the technical merits of the position. The Company did not recognize any material adjustments to the liability for unrecognized income tax benefits.

Schedule of long-term debt maturities
Year Ending			Notes
October 31	Stockholders		Payable		Amount Due
2023	$	110,631		20,128		130,759
2024		66,667		20,239		86,906
2025				20,833		20,833
2025				21,449		21,449
2026				2,026		2,026
Total	$	177,298		84,675		261,973

The Company is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.

CONCENTRATION OF CREDIT RISK

The Company maintains its cash balances with a financial institution which management believes to be of high credit quality. The accounts are insured by the Federal Deposit Insurance Company (“FDIC”) up to $250,000 in coverage. The balances in the accounts may, at times, exceed the federally insured limits. The Company has not experienced any losses on deposits and management believes the Company is not exposed to any significant credit risk related to these accounts.

SHIPPING AND HANDLING

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 $32,962 and $24,791 for the fiscal years ended October 31, 2023 and 2022, respectively.

WARRANTIES

The Company provides a ten-year limited warranty covering defects in workmanship. These warranties are included in the contract and do not provide customers with a service in addition to assurance of compliance with agreed-upon specifications. The Company does not consider these assurance-type warranties to be separate performance obligations.

Management has determined that no warranty reserve is currently necessary on the Company’s products. Management will continue to evaluate the need for a warranty reserve throughout the year and make adjustments as needed.

F-13

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

~~DUE~~EARNINGS TOPER ~~STOCKHOLDERS~~SHARE

InThe ~~February~~Company ~~2012,~~calculates ~~the~~net ~~Company~~loss ~~entered~~per ~~into~~share ain ~~note~~accordance ~~payable~~ with ~~Roberta~~FASB ~~Riccelli~~ASC ~~for~~Topic ~~$8,000~~260 “Earnings Per Share”. ~~This~~Basic ~~loan~~earnings (loss) ~~was~~per toshare beis ~~used~~calculated toby ~~fund~~dividing ~~operations~~ net income (loss) by the weighted average number of common shares outstanding for the fiscal ~~Company~~year. ~~This~~During ~~loan~~the isfiscal ~~due~~years ~~on demand~~presented, ~~including~~the ~~interest~~Company atonly ~~10%~~has ~~for~~common ~~120~~stock ~~days~~outstanding. ~~This~~In ~~note~~2021, ~~was~~the ~~extended~~Company ~~through~~issued a ~~verbal~~convertible debt ~~agreement~~instrument. ~~The~~ ~~loan~~In ~~balance~~addition, the Company also has stock warrants of 954,000 and 994,000 as of October 31, ~~2022~~2023 and ~~2021~~2022, ~~was~~respectively. The ~~$3,000~~Company has calculated diluted earnings (loss) per share utilizing the outstanding stock warrants and convertible debt.

InSTOCK-BASED January 2013, the Company entered into a note payable with Corinthian Development for $20,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% with an original repayment date of May 2013. This note was extended through a verbal agreement. The loan balance at October 31, 2022 and 2021 was $10,000.COMPENSATION

~~During~~The ~~August 2017, the~~ Company ~~entered~~accounts ~~into~~for astock-based ~~note~~compensation ~~payable~~in ~~agreement~~accordance with ~~Riccelli~~FASB ~~Properties,~~ASC ~~which~~Topic is718 ~~wholly~~“Compensation ~~owned~~– ~~and~~Stock ~~operated by the Company’s~~Compensation”. ~~CEO,~~In ~~Joseph~~accordance ~~Riccelli,~~with in the ~~amount~~provisions of ~~$40~~FASB ASC Topic 718,~~672.~~ ~~This~~share-based ~~amount~~payment ~~reflects~~transactions ~~payments~~with ~~made~~employees byare ~~Riccelli~~measured ~~Properties~~based on the ~~Small~~fair ~~Business~~value ~~Association promissory~~of ~~note.~~the ~~Riccelli~~nonequity ~~Properties~~instruments ~~sold~~issued on the ~~real~~grant ~~estate~~date ~~that~~or ~~was~~on ~~collateral~~the onfair value of the ~~promissory~~liabilities ~~note~~incurred. ~~The~~Share-based payments ~~note~~to ~~has~~nonemployees aare ~~term~~measured ofand 6recognized ~~months and~~using anthe ~~interest~~fair ~~rate~~value ofmethod, ~~10%.~~based ~~The~~on ~~loan~~the ~~balance~~fair atvalue ~~October~~of ~~31,~~the ~~2022~~equity ~~and~~instruments issued ~~2021~~or ~~was~~the ~~$12,464~~fair value of goods and ~~$17~~services received,~~964,~~ ~~respectively~~whichever is more reliably measured.

~~In August 2019, the Company entered into a note payable with its CEO, Joseph Riccelli, for $36,500~~2. ~~This~~GOING ~~loan was to be used to fund operations of the Company. This loan has no set maturity date. The loan balance at October 31, 2022 and 2021 was $-0- and $12,500, respectively.~~CONCERN

InThese ~~December~~financial ~~2019~~statements have been prepared on a going concern basis, which implies that the Company ~~entered~~will ~~into~~continue ato ~~note~~realize ~~payable~~its assets ~~with~~and discharge its ~~CEO~~liabilities in the normal course of business. The Company had net losses of ($301,378) ~~Joseph~~and ~~Riccelli~~($225,489) and ~~for~~negative cash flows from operations of ($38209,~~000.~~489) ~~This~~and ~~loan~~($99,685) ~~was~~for tothe befiscal ~~used~~year toended ~~fund~~October ~~operations~~31, 2023 and 2022, respectively. ofIn addition, the Company. ~~This~~has ~~loan~~an isaccumulated ~~due~~deficit onof ~~demand~~($10,636,957). ~~including~~These ~~interest~~factors atraise ~~10%~~substantial ~~with~~doubt anregarding ~~original~~the ~~repayment~~Company’s ability ~~date~~to continue as a going concern for a period of ~~November~~one ~~2013.~~year ~~This~~from ~~note~~the ~~was~~issuance of these financial statements. Management’s ~~extended~~plans include cash receipts through asales, ~~verbal~~sales ~~agreement~~of Company stock, and borrowings from private parties. ~~The~~These ~~loan~~financial ~~balance~~statements do atnot ~~October~~include ~~31,~~any ~~2022~~adjustments to the recoverability and ~~2021~~classification ~~$18,500~~of recorded asset amounts and ~~$29,000,~~classification ~~respectively~~of liabilities that might be necessary should the Company be unable to continue as a going concern.

In December 2020, the Company entered into a note payable agreement with Lawrence Fraser for $200,000. This loan is secured by one of Company’s patent. The term of the loan is three years and with an interest rate of 12% per annum. The loan is to be repaid in yearly installments payable in December annually until maturity December 2023. The loan balance at October 31, 2022 and 2021 $133,334 and $200,000, respectively.

In May 2021, the Company issued a convertible promissory note to Antonio Costa for $50,000. The term of the note is one year with an interest rate of 8% per year. The principal of the loan and any accrued but unpaid interest may be converted into shares of the Company’s common stock. The conversion rate is one share of Company’s common stock for every $.50 of principal and unpaid interest. The loan balance at October 31, 2022 and 2021 $-0- and $50,000, respectively.

NOTES PAYABLE

In July 2005, the Company was approved for a low interest promissory note from the U.S. Small Business Administration in the amount of $280,100. In January 2006 the Company amended the promissory note with the Small Business Administration increasing the principal balance to $430,500. The note bears an annual interest rate of 2.9% and matures on July 13, 2035. Monthly payments, including principal and interest, of $1,820 are due monthly. A payment was made on the note of $40,672 during the year ended October 31, 2017 due to the sale of real estate by Riccelli Properties that was collateral on the promissory note. The loan balance was $84,675 and $90,350 at October 31, 2022 and 2021, respectively. This note is guaranteed by the Company’s CEO.

F-14

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~ NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

63. ~~EXCLUSIVE LICENSING AND MANUFACTURING AGREEMENT~~LEASE

OnFASB ~~April~~ASC 16Topic 842, ~~2006~~“Leases”, ~~the~~establishes ~~Company~~a ~~entered~~right ~~into~~of anuse ~~Exclusive License and Manufacturing Agreement~~ (~~the~~ “~~Agreement~~ROU”) ~~with~~model ~~the~~that ~~Ketut Group,~~requires ~~with~~a anlessee ~~effective date of April 1, 2006, whereby the Company acquired an exclusive license~~ to ~~develop,~~recognize a ~~use,~~ROU ~~sell,~~asset ~~manufacture~~ and ~~market~~lease ~~products~~liability ~~related~~on tothe orbalance ~~utilizing~~sheets. ~~INSULTEX™,~~ROU ~~Korean~~assets ~~Patent~~and ~~Number,~~lease ~~(0426429)~~liabilities orare ~~any~~recognized ~~INSULTEX~~at ~~Technology. At~~ the ~~behest~~commencement date ofbased ~~the~~on ~~Board of Directors,~~ the ~~INSULTEX~~present ~~trademark~~value ~~was~~of ~~chosen~~lease aspayments ~~the~~over ~~mark to identify~~ the ~~product~~lease ~~utilized~~term. byROU ~~Innovative~~assets ~~since~~are ~~its~~reduced ~~inception and~~each ~~was~~period ~~originally registered~~ by ~~Joseph~~an ~~Riccelli~~amount onequal ~~February 17, 2005. The new trademark, intended~~ to ~~avoid confusion arising from~~ the ~~use~~difference ofbetween the ~~old~~lease ~~Eliotex~~expense ~~trademark in association with a new, subsequent, different~~ and ~~separately-patented product, was assigned by Mr. Riccelli to~~ the ~~Company~~amount ~~on April 25, 2006, with that assignment to become effective upon final approval~~ of ~~the~~interest ~~Statement~~expense ofon ~~Use by~~ the ~~United~~ ~~States~~lease ~~Patent and Trademark Office. The License was awarded by the Korean inventor~~liability, anusing ~~individual who is part of~~ the ~~Ketut~~effective ~~Group, and~~interest ~~the manufacturer of INSULTEX™~~method. The Company ~~received~~used anthe ~~exclusive~~average ~~forty~~commercial ~~(40)~~real ~~year~~estate ~~worldwide~~interest ~~license,~~rate ~~except for Korea and Japan, with an initial term~~ of ~~ten~~5.50% ~~(10) years and an option~~ to ~~renew~~calculate the ~~License~~present ~~for~~value upof tothe ~~three (3) successive ten (10) year terms~~lease. The ~~first ten-year option was exercised. Additionally, the~~ Company ~~was granted the exclusive rights to any current or future inventions, improvements,~~ ~~discoveries,~~recognizes ~~patent~~lease ~~applications~~expense ~~and~~on ~~letters~~a ofstraight-line ~~patent~~basis ~~which~~over the ~~Ketut~~leased ~~Group~~term ~~controls~~on ~~or may control related to INSULTEX™. Furthermore,~~ the ~~Company~~statements ~~has the right to grant sub-licenses to other manufacturers for the use~~ of ~~INSULTEX™ or any INSULTEX Technology~~operations.

7The Company entered into a lease for office space at the time the Company was formed through June 2022. ~~CONCENTRATIONS~~Effective July 2022, the Company is leasing the office space on a month to month basis. As a result, the Company has elected to apply the short-term lease exemption to its lease of the facilities and therefore has not recorded a ROU asset and related lease liability.

~~Revenues from~~4. ~~two~~PROPERTY ~~customers~~AND ~~were approximately 35% and 55% of the Company’s revenues for the fiscal years ended October 31, 2022 and 2021, respectively.~~EQUIPMENT

~~The~~Property ~~Company~~and ~~only~~equipment ~~has~~are ~~one~~summarized ~~supplier~~by ofmajor ~~INSULTEX,~~classifications ~~the~~as ~~special material which is manufactured for the Company. Additionally, the Company only has 1 one manufacturer that produces house wrap on behalf of the Company in Massachusetts.~~follows:

Schedule of property and equipment
	2023		2022

Equipment	$	1,500	$	1,500
Containers		24,400		14,900
Automobile		11,093		8,111

Total		36,993		24,511

Less accumulated depreciation		13,514		18,551

Property and equipment, net	$	23,479	$	5,960

Depreciation expense for the fiscal years ended October 31, 2023 and 2022 was $3,074 and $1,490, respectively.

F-15

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

85. ~~INCOME~~NOTE ~~TAXES~~PAYABLE

In ~~prior~~July ~~years~~2005, the Company ~~incurred~~was ~~net~~approved ~~operating losses and, accordingly, no provision~~ for ~~income~~a ~~taxes~~low ~~has~~interest ~~been recorded. In addition,~~promissory nonote ~~benefit~~from ~~for~~the ~~income~~U.S. ~~taxes~~Small ~~has~~Business ~~been~~Administration ~~recorded~~in ~~due to~~ the ~~uncertainty~~amount of ~~the~~$280,100. ~~realization~~In ofJanuary ~~any~~2006, ~~tax~~the ~~assets.~~Company ~~For~~amended the ~~2021~~promissory note ~~tax~~to ~~year,~~increase ~~fiscal year~~the ~~end~~principal ~~October~~balance ~~31,~~to ~~2022~~$430,500. ~~the~~The ~~Company~~note ~~had~~calls ~~net~~for ~~operating~~monthly ~~loss~~payments ~~carryforwards~~ of ~~approximately~~ $71,~~630~~820,~~000~~ ~~for~~bears ~~tax~~interest ~~purposes.~~at ~~The~~an ~~carryforwards~~annual ~~are~~rate ~~available to offset taxable income~~ of ~~future~~2.9%, ~~periods~~ and ~~begin~~matures toon ~~expire~~July ~~after the Company’s 2037 tax year~~13, ~~fiscal year end October 31, 2038~~2035. ~~Effective~~A ~~for~~payment ~~tax~~of ~~years ending in 2019 or later~~$40,672 ~~net~~was ~~operating~~made ~~losses~~on ~~cannot~~the benote ~~carried~~during ~~back~~the ~~but~~fiscal ~~can~~year beended ~~carried~~October ~~forward~~31, to2017, ~~future~~due ~~tax years indefinitely. Realization of the deferred tax benefit related~~ to the ~~carryforward~~sale isof ~~dependent~~real ~~upon~~estate ~~the~~by ~~Company~~Riccelli ~~generating sufficient~~Properties ~~taxable~~that ~~income~~was incollateral ~~the~~on ~~future, against which~~ the ~~loss~~promissory ~~can be offset, which is not guaranteed~~note.

~~Deferred~~As ~~income taxes reflect the net tax effect~~ of ~~temporary~~October ~~differences~~31, ~~between~~2023 ~~carrying amounts of assets~~ and ~~liabilities for financial reporting purposes and the amounts used for income tax purposes~~2022, ~~as well as tax benefits of net operating loss carryforwards. The significant components of~~ the ~~Company’s~~note ~~deferred~~payable ~~tax~~had ~~assets and liabilities relate to~~ the following balances:

Schedule of deferred tax assets and liabilities
Schedule of note payable
	2022			2021
	2023			2022
Net operating loss carryforward	$	2,364,537		$	2,269,088
U.S. Small Business Administration	$	64,826		$	84,675
Depreciation		—			—
		64,826			84,675
Net deferred tax assets before valuation allowance		2,364,537			2,269,088
Less current portion		20,397			20,128
Less: Valuation allowance		(2,364,537	)		(2,269,088	)
Long-term portion of note payable	$	44,429		$	64,547
Net deferred tax assets	$	—		$	—

For financial reporting purposes, the Company has incurred losses in previous years. Based on the available objective evidence, including the Company’s previous losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets as of October 31, 2022 and 2021, respectively.

Schedule of long term debt maturity
Year Ending
October 31,	Amount

2024	$	20,397
2025		20,934
2026		21,485
2027		2,010

Total	$	64,826

~~The effective~~6. ~~income~~STOCKHOLDER ~~tax rate varied from the statutory Federal tax rate as follows:~~LOANS

Schedule of effective income tax rate varied from statutory federal tax rate
	2022			2021
Federal statutory rate		21	%		21	%
Effect of net operating losses		(21	%)		(21	%)
Effective income tax rate		—			—

ROBERTA RICCELLI

~~The~~In February 2012, the Company’s ~~effective~~entered ~~tax~~into ~~rate~~a isloan ~~lower~~agreement ~~than~~with ~~what~~Robert ~~would~~Riccelli befor ~~expected~~$8,000 ifto fund operations of the ~~federal~~Company. ~~statutory~~This loan is due on demand, including interest at an annual rate ~~were~~of ~~applied~~10% towith ~~income~~an ~~(loss)~~original ~~before~~maturity date of June 2012. The loan was extended ~~taxes,~~through ~~primarily~~a ~~due~~verbal toagreement ~~net~~and ~~operating~~currently ~~loss~~has ~~carryforwards~~no set maturity date.

F-16

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

~~9. COMMITMENTS~~CORINTHIAN DEVELOPMENT

~~The~~In ~~Company~~January ~~leases~~2013, ~~its~~the ~~executive~~Company ~~offices/warehouse~~entered ~~space~~into ~~from~~a ~~Frank~~loan ~~Riccelli,~~agreement awith ~~stockholder~~Corinthian ~~and~~Development ~~brother~~for of$20,000 ~~our~~to ~~Chief~~fund ~~Executive~~operations ~~Officer,~~of ~~for $3,500~~the ~~per month~~Company. This ~~The~~loan ~~lease~~ is ~~based~~due on ademand, ~~verbal~~including ~~agreement~~interest ~~with~~at ~~month~~an toannual ~~month~~rate ~~terms.~~of ~~For~~10% ~~the~~with ~~fiscal~~an ~~years~~original ~~ended~~maturity ~~October~~date ~~31,~~of ~~2022~~May ~~and~~2013. This loan ~~2021~~was ~~rent~~extended ~~expense~~through ~~totaled~~a ~~$42,000~~verbal agreement and ~~$24,500,~~currently ~~respectively~~has no set maturity date.

~~10. SEGMENT INFORMATION~~RICCELLI PROPERTIES

WeDuring ~~have~~August ~~organized~~2017, ~~our~~the ~~operations~~Company entered into ~~two~~a 2loan ~~segments~~agreement aswith ~~discussed~~Riccelli inProperties, ~~Note~~which 1is towholly owned and operated by the ~~financial~~Company’s CEO, ~~statements~~Joseph Riccelli, Sr., Wein ~~rely~~the amount of $40,672 which reflects the payment made by Riccelli Properties on anthe ~~internal~~U.S. Small Business ~~management~~Administration ~~reporting~~note ~~process~~payable. ~~that~~The ~~provides~~loan ~~segment~~had ~~information~~a ~~for~~term ~~purposes~~of six months, including an annual interest rate of ~~making~~10%. ~~financial~~The ~~decisions~~loan ~~and~~was ~~allocating~~paid in ~~resources~~full during the fiscal year ended October 31, 2023.

~~The~~JOSEPH ~~following tables present our business segment information for the fiscal years ending October 31~~RICCELLI, ~~2022 and 2021:~~SR.

Schedule of business segment information
	2022		2021
Revenues:
Apparel	$	65,432	$	56,226
Housewrap		193,302		169,375
Total Revenues	$	258,734	$	225,601
Capital Expenditures:
Apparel	$		$	—
Housewrap				—
Total	$		$	—
Depreciation:
Apparel	$	-0-	$	9,410
Housewrap		1,490		23,898
Total	$	1,490	$	33,308

In December 2019, the Company entered into a loan agreement with its CEO, Joseph Riccelli, Sr., for $38,000 to fund operations of the Company. This loan is due on demand, including interest at an annual rate of 10% with an original maturity date of November 2013. This loan was paid in full during the fiscal year ended October 31, 2023.

LAWRENCE FRASER

In December 2020, the Company entered into a loan agreement with Lawrence Fraser for $200,000. The loan is payable in yearly installments of $66,666, with the balance due and payable in December 2023 at an annual interest rate of 12%. The loan is secured by one of the Company’s patents.

As of October 31, 2023 and 2022, stockholder loans had the following balances:

Schedule of stockholder loans
	2023		2022
Roberta Riccelli	$	2,000	$	3,000
Corinthian Development		10,000		10,000
Riccelli Properties		—		12,464
Joseph Riccelli, Sr.		—		18,500
Lawrence Fraser		58,668		133,334
Total stockholder loans	$	70,668	$	177,298

F-17

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

~~11.~~Maturity ~~COMMON~~of ~~STOCK~~the stockholder loans is as follows:

During the fiscal year ended October 31, 2021, the Company sold 1,334,000 shares of common stock to thirty-five investors for total proceeds of $333,500. The stock was issued at $.25 per share. The Company issued 770,000 shares of common stock to twelve individuals for services valued at $131,000. The stock was issued between $0.12 and $.25 per share. 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 for the restrictions on their transferability and sale.


Year Ending
October 31,	Amount

2024	$	70,668

Total	$	70,668

~~During the fiscal year ended October 31, 2022, the Company sold 460,000 shares of common stock to seven investors for total proceeds of $86,200~~7. ~~The~~ ~~stock~~OTHER was issued between $.17 and $.25 per share. The Company issued 875,000 shares of common stock to eight individuals for services valued at $210,000. The stock was issued between $0.20 and $.25 per share. 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 for the restrictions on their transferability and sale.INCOME

12Management, during fiscal year ended October 31, 2022, reevaluated certain disputed accounts payable amounts and have determined that accrued professional fees of $111,000 were no longer payable. ~~RELATED~~In ~~PARTY~~addition, ~~TRANSACTIONS~~the Company received $260,000 for costs recovered for defending a lawsuit. As such, total miscellaneous income was $371,000 for the fiscal year ended October 31, 2022.

~~The Company has entered into various debt agreements with related parties~~8. ~~These~~EXCLUSIVE ~~agreements~~LICENSING ~~are~~AND ~~classified~~MANUFACTURING ~~as shareholder loans within Note 5 to the financial statements.~~AGREEMENT

~~The~~On ~~Company~~April ~~has~~16, 2006, the Company entered into aan ~~verbal~~exclusive ~~lease~~licensing and manufacturing agreement with the Ketut Group, with an effective date of April 1, 2006, whereby the Company acquired an exclusive license to develop, use, sell, manufacture, and market products related to or utilizing the INSULTEX brand, Korean patent number 0426429, or any INSULTEX technology. At the behest of the Board of Directors, the INSULTEX trademark was chosen as ~~further~~the ~~discussed~~mark to identify the product utilized by the Company since its inception and was originally registered to Joseph Riccelli, Sr. on February 17, 2005. The new trademark, intended to avoid confusion arising from the use of the old Eliotex trademark in ~~Note~~association 14with a new, subsequent, different, and separately patented product, was assigned by Joseph Riccelli to the ~~financial~~Company ~~statements~~on April 25, 2006, with that assignment to become effective upon final approval of the statement of use by the United States Patent and Trademark Office. The license was awarded by the Korean inventor, an individual who is part of the Ketut Group, and the manufacturer of INSULTEX. The Company received an exclusive forty year worldwide license, except for Korea and Japan, with an initial term of ten years and an option to renew the license for up to three successive ten year terms. The first ten year option was exercised. Additionally, the Company was granted the exclusive rights to any current or future inventions, improvements, discoveries, patent applications, and letters of patent which the Ketut Group controls, or may control, related to INSULTEX. Furthermore, the Company has the right to grant sub-licenses to other manufacturers for the use of INSULTEX or any INSULTEX technology.

13. LITIGATION

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.

F-18

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

~~In November 2021, in connection with the FTC litigation, the Company filed an application for attorney fees, expenses and cost in the U~~9.~~S. District~~ Court for the Western District of Pennsylvania, Case No.2:16-cv-01669-NBF. On June 29, 2022, a settlement order was signed by the Court. Pursuant to the Order, the FTC paid the Company $260,000 to resolve all such claims. The parties agreed to waive all rights to appeal or otherwise challenge or contest the validity of the Order.CONCENTRATIONS

~~14.~~Revenues from ~~RIGHT~~two OFcustomers ~~USE~~were ~~ASSETS~~approximately 45% and 35% of the Company’s revenues for the fiscal years ended October 31, 2023 and 2022, respectively.

The Company ~~entered~~only ~~lease~~has atone ~~the~~supplier ~~time the Company was formed that is classified as right~~ of ~~use~~INSULTEX, ~~asset and lease liability. The lease for~~ the ~~Company’s~~special ~~office~~material ~~space~~which is ~~estimated~~manufactured tofor bethe ~~through June 2022~~Company. ~~In accordance with ASU 2016-02~~Additionally, the Company ~~calculated the present~~ ~~value~~only ofhas ~~the~~one ~~leases~~manufacturer ~~using~~in ~~the~~Massachusetts ~~average~~that ~~commercial~~produces ~~real~~house ~~estate~~wrap ~~interest~~on ~~rate~~behalf of ~~5.50% at~~ the ~~commencement of the office lease. Effective July 2022, the~~ Company ~~is leasing the property on a month to month basis~~.

~~As of~~10. ~~October~~INCOME ~~31, 2022, the right of use assets associated with future operating lease is as follows:~~TAXES

Schedule of 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		(150,496	)
Total right of use asset as of October 31, 2022	$	-0-
Less current portion due within one year		-0-
Long-term right of use asset	$	-0-

In prior years, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. For the 2022 tax year, fiscal year ended October 31, 2023, the Company had net operating loss carryforwards of approximately $8,001,000 for tax purposes. The carryforwards are available to offset taxable income of future periods and begin to expire after the Company’s 2038 tax year, fiscal year ending October 31, 2039. Effective for tax years ending in 2019 or later, net operating losses cannot be carried back, but can be carried forward to future tax years indefinitely. Realization of the deferred tax benefit related to the carryforward is dependent on the Company generating sufficient taxable income in the future, against which the loss can be offset, which is not guaranteed.

~~Total~~Deferred ~~amortization~~income ~~expense~~taxes ~~related~~reflect to the ~~right~~net tax effect of ~~use~~temporary differences between carrying amounts of assets ~~under~~and liabilities for financial reporting purposes and the ~~verbal~~amounts ~~lease~~used ~~agreement~~for ~~was~~income ~~$40~~tax purposes,~~962~~ ~~and~~as ~~$38,775~~well ~~for~~as ~~the~~tax ~~years~~benefits ~~ended~~of net operating loss carryforwards. ~~October~~The ~~31,~~significant ~~2022~~components of the Company’s deferred tax assets and ~~2021,~~liabilities ~~respectively.~~relate to the following:


	2023		2022

Net operating loss carryforward	$	2,479,510	$	2,364,537
Depreciation		—		—

Net deferred tax assets before valuation allowance		2,479,510		2,364,537

Less valuation allowance		2,479,510		2,364,537

Net deferred tax assets	$	—	$	—

F-19

INNOVATIVE DESIGNS, INC. ~~NOTES TO FINANCIAL STATEMENTS~~

~~Years~~NOTES ~~Ended~~TO ~~October~~FINANCIAL ~~31, 2022 and 2021~~STATEMENTS

~~15.~~The effective ~~LEASE~~income ~~LIABILITY~~tax rate varied from the statutory Federal tax rate as follows:

As disclosed in Note 14, the Company entered into a verbal lease for office space prior to the year ended October 31, 2022 that is classified as a right of use asset and lease liability.


	2023			2022
Federal statutory rate		21	%		21	%
Effect of net operating losses		-21	%		-21	%
Effective income tax rate		0	%		0	%

AsThe ofCompany’s ~~October~~effective ~~31,~~income ~~2022,~~tax ~~the~~rate ~~lease~~is ~~liability~~lower ~~associated~~than ~~with~~what ~~future~~would ~~payments~~be ~~due~~expected ~~under~~if the ~~verbal~~Federal ~~lease~~statutory israte aswere ~~follows:~~applied to income (loss) before taxes, primarily due to net operating loss carryforwards.

Schedule of future minimum lease payments
Total present value of future lease payments	$	150,496
Principal payments made as of the year ended October 31, 2022		(150,496	)
Total right of use lease liabilities as of October 31, 2022	$	-0-

11.

COMMITMENTS

16The Company leases its executive offices/warehouse space from Frank Riccelli, a stockholder and brother of Joseph Riccelli, Sr., ~~SUBSEQUENT~~the Company’s ~~EVENTS~~CEO, for $3,500 a month. The lease is based on a verbal agreement with month-to-month terms. For the fiscal years ended October 31, 2023 and 2022, rent expense was $35,000 and $42,000, respectively.

~~The Company~~12. ~~sold~~SEGMENT ~~500,000 shares of common stock for $110,000 in November 2022.~~INFORMATION

The Company has organized operations into two segments as discussed in Note 1 to the financial statements, based on an internal management reporting process that provides segment information for purposes of making financial decisions and allocating resources.

The following tables present the Company’s business segment information for the fiscal years ended October 31, 2023 and 2023:


Revenues:	2023		2022
Apparel	$	34,780	$	65,432
House wrap		312,983		193,302
Total revenues	$	347,763	$	258,734
Capital expenditures:
Apparel	$	—	$	—
House wrap		20,593		—
Total assets	$	20,593		—

F-20

INNOVATIVE DESIGNS, INC.

NOTES TO FINANCIAL STATEMENTS

Depreciation:
Apparel	$	—	$	—
House wrap		3,074		1,490

Total depreciation	$	3,074	$	1,490

13.

COMMON STOCK

During the fiscal year ended October 31, 2023, the Company sold 1,635,000 shares of common stock to sixteen investors for total proceeds of $355,000, one investor exercised 40,000 warrants for stock for total proceeds of $10,000, and 230,000 shares were issued to two investors for services valued at $41,940. The stock was issued between $0.20 and $0.25 per share. Management believes 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 of general advertising involved in these transactions. The Company placed legends on the stock certificate stating that the securities were not registered under the Securities Act and set for the restrictions on their transferability and sale.

During the fiscal year ended October 31, 2022, the Company sold 460,000 shares of common stock to seven investors for total proceeds of $86,200, and 875,000 shares of common stock were issued to eight individuals for services valued at $210,000. The stock was issued between $0.17 and $0.25 per share. Management believes 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 of general advertising involved in these transactions. The Company placed legends on the stock certificate stating that the securities were not registered under the Securities Act and set for the restrictions on their transferability and sale.

14.

RELATED PARTY TRANSACTIONS

The Company has entered into various loan agreements with related parties. These agreements are classified as stockholder loans as described in Note 6 to the financial statements.

The Company has also entered into a verbal lease agreement as described in Notes 3 and 11 to the financial statements.

F-21

INNOVATIVE DESIGNS, INC.

NOTES TO FINANCIAL STATEMENTS

15.

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, 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 to redress a rescission of revenue the Company received from the sale of the 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 U.S. Court of Appeals for the Third District affirmed the District Court’s ruling in favor of the Registrant. The ruling was in connection with the FTC complaint filed against the Registrant in November 2016, alleging, among other matters, that the Registrant did not have substantiation for claims made by the Registrant regarding the R-value and energy efficiency of its INSULTEX house wrap products.

In November 2021, in connection with the FTC litigation, the Company filed an application for attorney fees, expenses and cost in the U.S. District Court for the Western District of Pennsylvania, Case No.2:16-cv-01669-NBF. On June 29, 2022, a settlement order was signed by the Court. Pursuant to the Order, the FTC paid the Company $260,000 to resolve all such claims. The parties agreed to waive all rights to appeal or otherwise challenge or contest the validity of the Order.

16.

SUBSEQUENT EVENTS

The Company has evaluated subsequent events in accordance with ASC Topic 855, “Subsequent Events”, through February 22, 2024, which is the date financial statements were available to be issued.

During December 2023, the Company entered into a convertible promissory note in the amount of $50,000 due and payable in December 2024 at an annual interest rate of 6.0%. Any principal and unpaid accrued interest outstanding as of the due date may be converted to common stock at a value of $0.20 per share.

F-22

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE.

	Previously reported.

ITEM 9A.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Management of Innovative Designs, Inc. is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer/Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.

At the end of the period covered by this report, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was carried out under the supervision and with the participation of our Chief Executive Officer/Chief Financial Officer. Based on his evaluation of our disclosure controls and procedures and in connection with the audit of our financial statement, he concluded that during the period covered by this report, such disclosure controls and procedures were not effective. This conclusion is based on the identification of the deficiency in internal controls over financial reporting described below. Notwithstanding the deficiency that existed as of October 31, ~~2021~~2023, our Chief Executive Officer/Chief Financial Officer has concluded that the financial statements included in this Annual report on Form 10-K present fairly, in all material respects, the financial position, results of operations and cash flows of the Company in conformity with accounting generally accepted in the United States of America.

Our Chief Executive Officer is also our Chief Financial Officer.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; (iii) provide reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of October 31, 2021. This evaluation was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, Internal Control-Integrated Framework. Based upon such assessment, our Chief Executive Officer/Chief Financial Officer concluded that our internal controls over financial reporting were not effective as of October 31, ~~2021~~2023. In particular, our controls over financial reporting were not effective in the specific areas described in the paragraphs below.

As of October 31, 2021, our Chief Executive Officer/Chief Financial Officer identified the following specific material weaknesses in the Company’s internal controls over its financial reporting processes:15

●As ~~The~~of ~~Company~~October ~~is not maintaining supporting schedules~~31, ~~or the schedules being maintained are inaccurate to support amounts presented and disclosed in the financial statements. Specific schedules in relation to inventory deposits~~2023, ~~inventory~~our ~~reserves,~~Chief ~~fixed~~Executive ~~assets,~~Officer/Chief Financial ~~debt~~Officer ~~balance~~identified ~~(and related accrued interest) were not available, or in~~ the ~~case~~following ofspecific ~~debt~~material ~~schedules~~weaknesses ~~were not accurate and~~ in ~~accordance with~~ the ~~loan documents ● The~~ Company’s internal controls ~~policies~~over ~~are~~its ~~ineffective, or not being complied with, to identify errors, in the~~ financial statements. These deficiencies may be considered as “material weaknesses”. ● In addition, the Company does not utilize an internal accounting system that captures all Company activity on a timely basis. Certain transactions, such as sales and receivables are maintained in one system and disbursements and accounts payable are maintained manually. On a quarterly basis this information is sent to an external accountant to retroactively enter the information into a general ledger system and then prepare the financial statements. The lack of a single accounting system presents multiple opportunities for errors to occur, and further contributes to a lack of timely internal and external financial reporting. processes:

●

The Company does not utilize an internal accounting system that captures all the Company’s activity on a timely basis. Certain transactions, such as sales and receivables, are maintained in one system and disbursements and accounts payable are maintained manually. On a quarterly basis this information is sent to an external accountant to retroactively enter the information into a general ledger system and then prepare the financial statements. The lack of a single accounting system presents multiple opportunities for error to occur and further contributes to the lack of timely internal and external financial reporting.

●

The Company’s record-keeping system is not sufficient to ensure that all invoices or similar support are maintained to corroborate transactions. Certain transactions directly charged to credit cards and certain online payments were not supported by invoices or other documentation to support that the payment was properly a Company related transaction.

The Company’s accounting system is not being utilized to track inventory costs on a FIFO method. This results in either the inventory being carried over or under its cost or net realizable value depending on whether there were price increases or decreases.

This was due to our limited resources, including the absence of an internal financial staff member with accounting and financial expertise and deficiencies in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls.

Management plans to address these matters by among actions, meeting more with its external accountant to ensure that issues such as described above are correct going forward. The Company will also ~~restructure~~look ~~its~~at ~~loan~~hiring ~~recording~~an ~~system~~external tobookkeeper bein ~~able~~order to ~~present~~have a ~~more~~single ~~informative report to its external account. Management will also reevaluate its~~ accounting ~~software and will make a determination as to whether to continue to use it or implement another type of program. Either decision will allow all information to be entered into one~~ system ~~which should alleviate the significant deficiency described above~~.

However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

There have been no significant changes in our internal control over financial reporting during the fiscal year ended October 31, ~~2022~~2023, and ~~2021~~2022, or subsequent to October 31, 2022, that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting, except as discussed above.

2116

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive Officers

Our executive officers are elected annually by our board of directors. A majority vote of the directors who are in office is required to fill vacancies on the board. Each director shall be elected for the term of one (1) year and until his successor is elected and qualified, or until his earlier resignation or removal. The directors named below will serve until the next annual meeting of our shareholders or until a successor is elected and has accepted the position.

Our directors and executive officers are as follows:

Name	Age	Position	Term
Joseph Riccelli	72	Chief ~~Eecutive~~Executive Officer, Chief Financial Officer, Principal Accounting Officer, Chairman	1 year
Constantine “Dean” P. Kolocouris	5254	Director	1 year
Daniel P. Rains	7071	Director	1 year
Donald V. Garlotta, PhD.	63	Director	1 year
Robert K. Adams	67	Director	1 year

Donald V. Garlotta, PhD. 62 Director 1 year

Robert K. Adams 66 Director 1 year

Mr. Riccelli has been our Chief Executive Officer and Chairman of the Board since our inception in June 2002. Mr. Riccelli was the owner of Pittsburgh Foreign and Domestic, a sole proprietor car dealership located in Glenshaw, Pennsylvania. He attended Point Park College located in Pittsburgh, Pennsylvania from 1971 to 1972.

Mr. Kolocouris has been one of our directors since our inception in June 2002. From December 1996 to December, Mr. Kolocouris was a Loan Officer and Assistant Vice President at Eastern Savings Bank located in Pittsburgh, Pennsylvania. Since that time, he has been in private lending. In June 1993, Mr. Kolocouris received a bachelor’s degree in ~~Finance~~finance from Duquesne University located in Pittsburgh, Pennsylvania. Mr. Kolcouris was in banking for over fifteen years and his knowledge of finance and business experience is helpful to the Company.

Mr. Rains has been a director since March 2007. Mr. Rains is currently Vice President of business development at McCarl’s, Inc., a mechanical contracting firm. He has held this position for over fifteen years. From 1981 through 1987, Mr. Rains was a professional football player for the Chicago Bears. He is a graduate of the University of Cincinnati. Mr. Rains has been in professional sports and in business for over twenty years. His experience and knowledge of these fields are helpful to the Company. As the Company enters the building construction market with its House Wrap product, Mr. Rains’ experience in that industry will be especially helpful.

Dr. Garlotta has been a director since February 2022. He is currently the Technical Director at Airex Rubber Products Corporation as well as a technical advisor for the Company. Prior to his role at Airex Rubber Products Corporation, he worked at Lowe’s Home Improvement. He earned a Ph.D. in Polymer Science / Plastics Engineering from the University of Massachusetts at Lowell. He also holds a Master of Science Degree in Polymer Science from the University of Massachusetts at Lowell and a Baccalaureate Degree in Polymer Science from ~~the~~ Pennsylvania State University.

Dr. Garlotta is an author or co-author of several peer-reviewed publications and patents related to biopolymers. He also has experience developing elastomers, water-soluble polymers, syntactic polymer foams and hands-on experience with extrusion and injection molding of plastics.

Mr. Adams has been a director since November 2022. He has worked for the Department of Defense for over thirty years. He graduated from Texas A&I University with a degree in Electrical Engineering.

Delinquent Section 16(a) Reports.

MrDr. ~~Adams~~Donald Garlotta filed ~~one~~a ~~report~~Form ~~late.~~4 ~~Mr. Kolocouris filed one report~~ late.

Audit Committee

We do not have a separate standing Audit Committee. Therefore, our entire Board of Directors acts as the Audit Committee. The Board of Directors has determined that Mr. Kolocouris is its financial expert. Mr. Kolocouris is a former loan officer for a bank and has a degree in Finance.

Nominating and Compensation Committees

We do not have either a nominating committee or a compensation committee. The basis for the Board of Directors to not have a nominating committee is the fact that our principal stockholder who is also our CEO and Chairman of the Board controls approximately thirty-four percent of the voting stock. And the Company has never held an Annual Meeting of stockholders. New board members are recommended to the Board by the Chairman of the Board.

Board of Directors Meetings

During the last full fiscal year, there were no meetings of the Board of Directors.

Code of Ethics

We have not, as yet adopted a code of ethics. We have only one full time executive officer/ chief financial officer who also acts as our principal accounting officer. To date, our operations have been so minimal and our staff so small that we have not considered a formal standard relating to the conduct of our personnel.

ITEM 11.

EXECUTIVE COMPENSATION.

The following Executive Compensation Chart highlights the terms of compensation for our Executives.

Summary Compensation Table
Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Joseph Riccelli CEO, Chairman		~~2022~~2023	$	6778,~~700~~000				0		0		0		0		0	$	6778,~~700~~000
Joseph Riccelli CEO, Chairman		~~2021~~2022	$	67,000		0		~~30,000~~		0		0		0		0	$	9767,700

There are no employment agreements between us and our executive officer Joseph Riccelli. There are no change of control arrangements, either by means of a compensatory plan, agreement, or otherwise, involving our current or former executive officers. There are no automobile lease agreements or key man life insurance policies that are to the benefit of our executive officers, in which we would make such payments. There are no standard or other arrangements in which our directors are compensated for any services as a director, including any additional amounts payable for committee participation or special assignments. There are no other arrangements in which any of our directors were compensated during our last fiscal year for any service provided as a director.

Other than Mr. Riccelli, who is our CEO, and Dr. Garlotta who serves as a consultant to the Company we consider the remaining Directors to be independent.

Director Compensation
Name	Fees Paid or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Constantine “Dean “P. Kolocouris		0	$	3,000		0		0		0		0		3,000
Daniel P. Rains Rains		0	$	3,000		0		0		0		0	$	3,000
Joseph Riccelli Riccelli		0	$	30,000		0		0		0		0	$	30,000

Securities Authorized for Issuance under Equity Compensation Plans.

Equity Compensation Plan Information

Plan Category	Number of securities to be issued upon exercise of outstanding options, warranties and rights		Weighted-average exercise price of outstanding options, warranties and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding those reflected in column (a))
	(a)		(b)			(c)
Equity compensation plans approved by security holders	$	0	$	0.90	(1)		400,000

(1)	Weighted average price was based on market value of the shares on or about the date the service was performed. Market value of the price per share ranged from $1.90 to $0.76 per share over the period of time in which the various services were performed.

(2)	All stock that has been issued by the Company out of the equity compensation plan was for the exchange of professional services. were sold for cash.

Use of Proceeds from Registered Securities

Not Applicable

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS.

The following table sets forth the ownership as of February 9, ~~2022~~2024, (a) by each person known by us to be the beneficial owner of more than five percent (5%) of our outstanding common stock, and/or (b) by each of our directors, by all executive officers and our directors and executive officers as a group.

To the best of our knowledge, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in our control.

Security Ownership of Management

Title of Class

Name and Address

Amount

Nature

Percent

Common Stock

Joseph Riccelli

7,655,000

Direct

22.3

Chief Executive Officer

Chairman

(1)

421,478

Indirect

Common Stock

Constantine” Dean” P. Kolocouris

117,000

Direct

Director

Common Stock

Daniel P. Rains

160,000

Direct

Director

Common Stock

Donald V. Garlotta

70,000

Direct

Director

Common Stock

Robert K. Adams

343,000

Direct

Director

All Directors and Executive Officers as a Group

8,766,478

24,8%

Security Ownership of Management

Title of Class

Name and Address

Amount

Nature

Percent

Common Stock

Joseph Riccelli

7,655,000

Direct

21.2

Chief Executive Officer

Chairman

(1)

421,478

Indirect

Common Stock

Constantine” Dean” P. Kolocouris

117,000

Direct

Director

Common Stock

Daniel P. Rains

160,000

Direct

Director

Common Stock

Donald V. Garlotta

110,000

Direct

Director

Common Stock

Robert K. Adams

343,000

Direct

Director

All Directors and Executive Officers as a Group

8,808,478

23,2

Represents less than one percent.

(1)	Represents shares of common stock held in the Gino A. Riccelli Trust. The Trust is for a son of our Chief Financial Officer. Mr. Joseph Riccelli is the trustee of the trust.

By virtue of his stock ownership or control over our stock, Mr. Riccelli may be deemed to “control” the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

Our officers and directors may encounter conflicts of ~~interests~~interest between our business objectives and their own interests. We have not formulated a policy for the resolution of such conflicts. Future transactions or arrangements between or among our officers, directors and shareholders, and businesses they control, may result in conflicts of interest, and the conflicts may be resolved in favor of businesses that our officers or directors are affiliated, which may have an adverse effect on our revenues.

Our officers and directors have the following conflicts of interests:

●· We lease our warehouse and office space from the brother of our Chief Executive Officer. We pay $3,500 per month for a total of $42,000 per year. Dr. Donal Garlotta, a director, serves as a technical advisor to the Company.. During the fiscal year ended October 31, 2023, we paid Dr. Garlotta $1,000 and have a payable to him of $6,395. Subsequent to the period we issued him 40,000 shares of our restricted common stock .at a price of $.20 per share. We do not have a formal policy regarding related party transactions.

Independence of Board Members

The Company has adopted the NASDAQ Listing Rules; Rule 5605 and 5605 (a) (20, for determining the independence of its directors. Directors are deemed independent only if the Board affirmatively determines that the director has no material relationship with the Company directly or as an officer, share owner or partner of an entity that has a relationship with the Company or any other relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

~~Audit~~Our ~~Fees~~independent principal account for part of fiscal year 2022 was Isdaner and Company, LLC (“Isdaner”). As previously reported RW Group, LLC demerged from Isdaner in fiscal 2022, and was our principal account for fiscal year 2023.

The aggregate fees billed for the fiscal years ended October 31, 2022 and 2021 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows: During 2022 Isdaner & Co. billed the company $ 7,125 for professional services, (b) , our current auditors, RW Group, LLC billed the Company $ 14,248 for professional services.

Audit Related Fees

~~None~~Fiscal year 2022. Fees paid to Isdaner were $$7,125. Fees paid to RW Group; LLC were $11,500.

Fiscal year 2023, RW Group, LLC $29,250.

Tax Fees

None.

All Other Fees

None.

2721

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Exhibit Number	Description

3.1	Revised Certificate of Incorporation****
3.2	Bylaws*
4	Specimen Stock Certificate*
10.1	Exclusive License and Manufacturing Agreement by and between Ko-Myung Kim, Ketut Jaya and Innovative Designs, Inc. [Confidential Treatment Requested] **
10.2	Authorization dated April 1, 2008 by and between Jordan Outdoor Enterprises, Ltd and Innovative Designs, Inc.***
10.3	License Agreement effective May 30, 2005 by and between Haas outdoors, Inc. and Innovative Designs, Inc.***
10.4	Loan Authorization Agreement, dated July 12, 2005 between the U. S. Small Business Administration and Innovative Designs, Inc.***
10.6	Motor Vehicle Installment Sale Contract dated September 26, 2005. ***
10.7	Machinery Purchase Agreement *****
23.1	Consent of RW Group, LLC (filed herewith)
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99	Test Results from Vartest Lab.*
100	Test Results from Texas Research Institute Austin, Inc.*
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Statement of Operations for the years ended October 31, 2020 and 2019, (ii) the Balance Sheets at October 31, 2020 and 2019, (iii) the Statements of Cash Flows for the years ended October 31, 2020 and 2019 and (iv) the notes to the Financial Statements.

*	Previously filed as exhibits to Registration Statement on Form SB-2 filed on March 11, 2003
**	Previously filed as exhibit to Form 10-KSB filed on February 8, 2008
***	Previously filed as exhibits to Form 10-K/A filed November 23, 2009
****	Previously filed as exhibit to Form 10-K filed February 12, 2015
*****	Previously filed as exhibit to Form 10-K filed January 28, 2016

2822

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	~~INNOVATIVE DESIGNS, INC.~~	INNOVATIVE DESIGNS, INC.
	~~(Registrant)~~	(Registrant)
Date: February 13, 20223	by:	/s/ Joseph Riccelli
Date:	February 23, 20224	by:	/s/ Joseph Riccelli
		~~Joseph Riccelli~~	Joseph Riccelli
		~~Chief Executive Officer~~	Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:	February 1323, ~~2023~~2024	by:	/s/ Joseph Riccelli
			Joseph Riccelli
			Chief Executive Officer,
			Chief Financial Officer, Principal
			Accounting Officer, and Chairman
			of the Board of Directors

Date:	February 1323, ~~2023~~2024	By:	/s/ Constantine “Dean” P. Kolocouris
			Constantine “Dean” P. Kolocouris
			Director

Date:	February 13, 2023	By:	/s/ Daniel P. Rains
			Daniel P. Rains
			Director

Date:	By:	*
		Daniel P. Rains
		Director

Date:	February 1323, ~~2023~~2024	By;	/s/ Donald V. Garlotta
			Donald V. Garlotta Director

Date:	February 1323, ~~2023~~2024	By:	/s/ Robert K. Adams
			Robert K. Adams Director

2923

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