{"url_path":"/sec/ivdn/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 Management’s Discussion and Analysis of Financial Condition and","topic":"sec","document":{"doc_type":"10-K/A","doc_date":"2026-05-18","source_url":"https://www.sec.gov/Archives/edgar/data/1190370/0001731122-26-000756-index.html","accession_number":"0001731122-26-000756","cik":"0001190370","ticker":"IVDN","issuer_name":"INNOVATIVE DESIGNS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1190370/0001731122-26-000756-index.html","primary_entity_key":"0001190370","primary_entity_name":"INNOVATIVE DESIGNS INC"},"word_count":1346,"has_tables":true,"body_markdown":"**Item 7. Management’s Discussion and Analysis of Financial Condition and\nResults of Operations**\n\n** **\n\n****General\n\n \n\nThe following information should be read in conjunction\nwith the financial statements and the notes thereto appearing elsewhere in this report.\n\n \n\nDisclosure Regarding Forward-Looking Statements\n\n \n\nCertain statements made in this report,\nand other written or oral statements made by or on behalf of the Company, may constitute “forward-looking statements” within\nthe meaning of the federal securities laws. When used in this report, the words “believes,” “expects,” “estimates,”\n“intends,” and similar expressions are intended to identify forward-looking statements. Statements regarding future events\nand developments and our future performance, as well as our expectations, beliefs, plans, intentions, estimates, or projections relating\nto the future, are forward-looking statements within the meaning of these laws. Examples of such statements in this report include descriptions\nof our plans and strategies with respect to developing certain market opportunities, and our overall business plan. All forward-looking\nstatements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected we\nbelieve that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements\nare based on current expectations and speak only as of the date of such statements. We undertake no obligations to publicly update or\nrevise any forward-looking statement, whether as a result of future events, new information or otherwise.\n\n \n\nBackground\n\n \n\nInnovative Designs, Inc. (hereafter\nreferred to as the “Company”, “we” or “our”) produces and sells a house wrap product using Insultex\na material with thermal resistance and buoyancy properties. We also offer a cold weather product line called “Artic Armor”\nwhich also uses Insultex. We no longer produce any Artic Armor products. We are only selling from our existing inventory. We obtain Insultex\nthrough a license agreement with the owner and manufacturer of the material. In December 2015, we took delivery of equipment capable of\nproducing our own Insultex. At such time as we have sufficient funding, we intend to put the equipment into production and use the Insultex\nfrom this equipment in the production of our House Wrap product and for the sale of Insultex to others.\n\n \n\n 13\n\n \n\n \n\nResults of Operations\n\n \n\nComparison of the fiscal year ended October 31, 2025, with the\nfiscal year ended October 31, 2024.\n\n \n\nThe following table shows a comparison of the results of operations\nbetween the fiscal years ending October 31, 2025, and October 31, 2024:\n\n \n\n  \nFiscal Year   Ended \n% \nFiscal Year   Ended \n% \nIncrease \n \n\n  \n10/31/2025 \nof sales \n10/31/2024 \nof sales \n(Decrease) \n% Change\n\n  \n  \n  \n  \n  \n  \n \n\nREVENUE - NET \n 2,765,149  \n 100.0% \n 1,382,734  \n 100.0% \n 1,382,415  \n 100.0%\n\n  \n    \n    \n    \n    \n    \n   \n\nOPERATING EXPENSES \n    \n    \n    \n    \n    \n   \n\nCost of sales \n 1,405,459  \n 50.8% \n 753,723  \n 54.5% \n 651,736  \n 86.5%\n\nSelling and G&A expenses \n 859,084  \n 31.1% \n 490,838  \n 35.5% \n 368,246  \n 75.0%\n\nTotal Operating Expenses \n 2,264,543  \n 81.9% \n 1,244,561  \n 90.0% \n 1,019,982  \n 81.9%\n\nIncome (loss) from operations \n 500,606  \n 18.1% \n 138,173  \n 10.0% \n 362,433  \n 262.3%\n\n  \n    \n    \n    \n    \n    \n   \n\nOther income (expenses) \n    \n    \n    \n    \n    \n   \n\nGain (loss) on sale of equipment \n —  \n —  \n —  \n 0.0% \n —  \n -100.0%\n\nInterest Income \n 980  \n 0.0% \n —  \n 0.0% \n 980  \n   \n\nInterest expense \n 1,313  \n 0.0% \n (36,272) \n -2.6% \n 37,585  \n 38.2%\n\nDepreciation \n (8,196) \n -0.2% \n (4,977) \n -0.4% \n (3,219) \n 100.0%\n\nTotal other income (expense) \n (5,903) \n -0.2% \n (41,249) \n -3.0% \n 35,346  \n 83.6%\n\nNet income (loss) \n 494,703  \n 17.9% \n 96,923  \n 7.0% \n 398,302  \n 132.2%\n\n  \n    \n    \n    \n    \n    \n   \n\nWeight average common shares outstanding - undiluted \n 38,316,256  \n    \n 37,276,150  \n    \n    \n   \n\nIncome (loss) per common share - undiluted \n 0.01  \n    \n 0.00  \n    \n    \n   \n\n**Results\nof Operations** \n    \n    \n    \n    \n    \n   \n\n \n\nRevenues for the fiscal year ended\nOctober 31, 2025, were $2,765,149 compared to revenues of $1,382,415 for the comparable period ending October 31, 2024. House Wrap product\nrevenue totaled $2,757,614 for the period compared to $1,324,127 for fiscal year ended October 31, 2025 and October 31, 2024, respectively.\nAll of the remaining revenues were derived from our Arctic Armor and related product lines which totaled $7,535 for the period compared\nto revenues of $51,602 for the fiscal year ended October 31, 2025 and October 31, 2024, respectively. Revenues are net of returns and\ndiscounts. We continue to work on rebuilding our House Wrap product line brand.\n\n \n\nCost of goods sold for the fiscal year ended\nOctober 31, 2025, was $1,405,459, compared to $753,723 for the fiscal year ended October 31, 2024. The increase of $651,736\nwas due to the significant increase of the sales.\n\n \n\nSelling, general and administrative\nexpenses increased from $490,838 in fiscal year ended October 31, 2024 to $859,084 in the fiscal year ended October 31, 2025. This increase\nreflects was also due to the increase of sales with more activities, specifically reflected in the professional fees of $300,535, payroll\nexpenses of $254,417,outside services of $65,754, etc.\n\n \n\n 14\n\n \n\n \n\nDuring the fiscal\nyear ended October 31, 2025, we funded our operations from revenues and the private sales of our common stock and the stock issuance for\nservices which helped the cash flows. We received a total of $42,000 from the sale of stock. We will continue to fund our operations from\nrevenues, private borrowings and the sale of our common stock until we are able to produce sales sufficient to cover our cost structure\nor to secure commercial lending arrangements.\n\n \n\nOn July 12, 2015,\nthe Company reached an agreement with Ketut Jaya to purchase machinery and equipment utilized to produce the INSULTEX material. The purchase\nprice 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.\nThe 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\ninstallment of $100,000 is to be made once the machinery and equipment is producing INSULTEX, and the fourth and final installment of\n$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\npayments of $600,000. In addition to the final payments, the Company will have to have the equipment and machines installed and ensure\nthat the machine can be operated in compliance with environmental regulations. The Company has not made an estimate of the costs required\nfor bringing the machine into compliance, but it is considered to be substantial. Given the expected time and cost of bringing the equipment\ninto production mode and our current financial condition we are unable to estimate when we will be able to do so.\n\n \n\nWe also must purchase\nnew quality control testing equipment for use in testing Insultex. The testing equipment is finished, and we are in discussions with the\nvendor regarding certain charges. Once we take delivery of the equipment it will have to go through a certification process. Once the\ntesting equipment is certified, we intend to begin the process of having Insultex certified by ICC Evaluation Services, LLC (“ICC-ES”).\nICC-ES certifies, among other items, building materials and products of which our House Wrap falls under. The reason we need to have ICC-ES\ncertification is that we believe in order to get large orders for House Wrap ICC-ES certification will be required. The other component\npart of the House Wrap produced by a third party is ICC-Es certified. Getting ICC-ES certification is costly and time consuming.\n\n \n\nDuring the period\nwe paid $10,396 on our loans. Short Term: We funded our operations with revenues from sales, private sales of our common stock and from\na legal settlement.\n\n \n\nThe Company intends\nto repay these debt obligations with funds it generates from revenues, from the possible sale of its securities, either debt or equity,\nfrom advances from our stockholders or others. Because we cannot currently access commercial lending facilities, should we not be able\nto continue to obtain funding from these sources should our revenues decrease, our operations would be severely affected as we would not\nbe able to fund our purchase orders to our suppliers for finished goods. The Company continues to pay its creditors when payments are\ndue.\n\n \n\nLong Term: The Company\nwill continue to fund operations from revenues, borrowings and the possible sale of its securities. Should we not be able to continue\nto rely on these sources our operations would be severely affected as we would not be able to fund our purchase orders to our suppliers\nfor finished goods."}