{"url_path":"/sec/ivdn/10-q/2026/item-2","section_key":"item-2","section_title":"Item 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-06-17","source_url":"https://www.sec.gov/Archives/edgar/data/1190370/0001731122-26-000868-index.html","accession_number":"0001731122-26-000868","cik":"0001190370","ticker":"IVDN","issuer_name":"INNOVATIVE DESIGNS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1190370/0001731122-26-000868-index.html","primary_entity_key":"0001190370","primary_entity_name":"INNOVATIVE DESIGNS INC"},"word_count":1270,"has_tables":true,"body_markdown":"**ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION\nAND RESULTS OF OPERATIONS**\n\n \n\n**General**\n\n \n\nThe following\ninformation should be read in conjunction with the financial statements and the notes thereto and in conjunction with Management’s\nDiscussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended October\n31, 2025.\n\n \n\n**Forward-Looking\nStatements**\n\n \n\nThis Quarterly\nReport on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All\nstatements other than statements of historical fact, including statements regarding future results of operation, made in this Quarterly\nReport on Form 10-Q are forward-looking statements. We use words such as expects, believes, intends, and similar expressions to identify\nforward-looking statements. Forward looking-looking statements reflect management’s current expectations and are inherently uncertain.\nActual results could differ materially for a variety of reasons, including, among others, competition in our cold weather markets, our\nability to sell out HouseWrap product line, our inability to secure sufficient funding to maintain and/or expand our current level of\noperations and the seasonality of our cold weather product line. These risks and uncertainties, as well as other risks and uncertainties\nthat could cause our actual results to differ significantly from management’s expectations, are described in greater detail in our\nAnnual Report on Form 10-K for the fiscal year ended October 31, 2021. The Company undertakes no obligation to publicly update or revise\nany forward-looking statement, whether as a result of new information, future events or otherwise except as required by law.\n\n \n\n**Background**\n\n \n\nInnovative\nDesigns, Inc. (hereinafter referred to as the “Company”, “we” or “our”) was formed on June 25, 2002.\nWe market and sell clothing products such as outdoor apparel, and cold weather gear called “Arctic Armor” that are made from\nIINSULTEX, a material with buoyancy, scent block and thermal resistant properties. We also market our House Wrap product line, which is\na building material with thermal qualities. House Wrap is also made from IINSULTEX. We obtain IINSULTEX through a license agreement with\nthe owner and manufacturer of the material. Since our formation we have devoted our efforts to:\n\n \n\n●Complete\nthe development, design and prototypes of our products,\n\n \n\n●Obtaining\nretail stores or sales agents to offer and sell our products’\n\n \n\n●Developing\nour website to sell more of our products.\n\n \n\n12\n\n \n\n \n\n**Results of Operations**\n\n** **\n\nComparison\nof the Three-Month Period Ended April 30, 2026, with the Three-Month Period Ended April 30, 2025.\n\n \n\nThe following\ntable shows a comparison of the results of operations between the three month periods ended April 30, 2026, and April 30, 2025:\n\n \n\n \n \nThree Month\n \n \n \nThree Month\n \n \n \n \n \n \n\n \n \nEnded\n \n%\n \nEnded\n \n%\n \nIncrease\n \n \n\n \n \n4/31/2026\n \nof sales\n \n4/31/2025\n \nof sales\n \n(Decrease)\n \n% Change\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nREVENUE - NET\n \n \n808,666\n \n \n \n100.0\n%\n \n \n796,369\n \n \n \n100.0\n%\n \n \n12,297\n \n \n \n15.4\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOPERATING EXPENSES\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCost of sales\n \n \n414,835\n \n \n \n51.3\n%\n \n \n395,872\n \n \n \n49.7\n%\n \n \n18,963\n \n \n \n4.8\n%\n\nSelling and G&A expenses\n \n \n285,133\n \n \n \n35.3\n%\n \n \n199,824\n \n \n \n25.1\n%\n \n \n85,309\n \n \n \n42.7\n%\n\nTotal Operating Expenses\n \n \n699,968\n \n \n \n86.6\n%\n \n \n595,696\n \n \n \n74.8\n%\n \n \n104,272\n \n \n \n17.5\n%\n\nIncome (loss) from operations\n \n \n108,698\n \n \n \n13.4\n%\n \n \n200,673\n \n \n \n25.2\n%\n \n \n(91,975\n)\n \n \n-45.8\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOther income (expenses)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nMiscellaneous income (expense)\n \n \n1,634\n \n \n \n0.1\n%\n \n \n153\n \n \n \n0.0\n%\n \n \n1,481\n \n \n \n968.0\n%\n\nInterest expense\n \n \n(2,151\n)\n \n \n-0.2\n%\n \n \n5,849\n \n \n \n0.7\n%\n \n \n(8,000\n)\n \n \n-136.8\n%\n\nDepreciation\n \n \n(2,121\n)\n \n \n-0.2\n%\n \n \n(2,487\n)\n \n \n-0.3\n%\n \n \n366\n \n \n \n14.7\n%\n\nTotal other income (expense)\n \n \n(2,638\n)\n \n \n0.3\n%\n \n \n3,515\n \n \n \n0.4\n%\n \n \n(1,853\n)\n \n \n-40.4\n%\n\nNet income (loss)\n \n \n106,060\n \n \n \n13.1\n%\n \n \n204,188\n \n \n \n25.6\n%\n \n \n(98,128\n)\n \n \n-48.1\n%\n\n \n\nRevenues\nfor the three-month period ended April 30, 2026, were $808,666 compared to revenues of $796,369 for the three-month period ended April\n30, 2025. The increase in revenue is attributable solely to an increase in sales of our House wrap product line.\n\n \n\nOur costs\nof sale, selling, general and administrative expenses (“SG&A”) were $285,133 for the three months ended April 30, 2026,\ncompared to $199,824 for the three-month period ended January 31, 2025. In February of 2024, we hired a son of our former CEO as a consultant\nto increase the sales.\n\n \n\n**Liquidity and Capital Resources**\n\n \n\nDuring the\nthree-month period ended April 30, 2026, we funded our operations from revenues and the sale of our common stock.\n\n \n\nShort Term:\nWe will continue to fund our operations from sales and the sale of our securities. We continue to pay our creditors when payments are\ndue. We will require more funds to be able to order the material for our Insultex products and to purchase equipment needed for the manufacture\nof the Insultex product. The Company reached an agreement with the manufacturer of the Insultex material to purchase a machine capable\nof producing the Insultex material. Also included in the proposed agreement will be the propriety formula that creates Insultex. The Company\ntook delivery of the equipment in December 2015. The Company will have to have the machine installed and ensure that it can be operated\nin compliance with all environmental rules and regulations. It is the Company’s intention to have the equipment operational but\ncannot currently provide a time estimate. Among the factors affecting the time estimate are the financial resources available to the Company,\nfinding a suitable facility and bringing technical personnel from abroad to install the equipment. The Company has currently made deposits\nof $652,944 on the equipment. The Company will produce Insultex under its own brand name. See Note 13 of the Notes to the Condensed Financial\nStatements.\n\n \n\n13\n\n \n\n \n\nThe new quality\ncontrol testing equipment for our House Wrap Product line has been built. We have reached an agreement with the vendor on the final amount.\nAs of April 30, 2026, we have paid approximately $39,139 in deposits for the equipment. We expect to accept delivery of the equipment\nwhen we are able to reach an agreement with a testing laboratory that will house the equipment. Once the equipment is installed it will\nhave to go through a certification process before we will be able to conduct tests on our Insultex products. Once the testing equipment\nis certified, we intend to begin the process of having Insulted certified by ICC Evaluation Services, LLC (“ICC-ES”). ICC-ES\ncertifies, among other items, building materials and products of which our House Wrap falls under. The reason we need to have ICC-ES certification\nis that we believe in order to get large orders for House Wrap, ICC-ES certification will be required. The other component part of the\nHousewrap produced by a third party is ICC-Es certified. Getting ICC-ES certification is costly and time consuming.\n\n \n\nLong Term:\nThe Company will continue to fund its operations from revenues, borrowings from private parties and the possible sale of our securities.\nShould we not be able to rely on the private sources for borrowing and /or increased sales, our operations would be severely affected\nas we would not be able to fund our purchase orders to our suppliers for finished goods and our efforts to produce our own IINSULTEX would\nbe delayed.\n\n \n\n** Off-Balance Sheet Arrangements**\n\n \n\nWe do not have any off-balance sheet arrangements\nthat have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues\nor expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.\n\n \n\n**Critical Accounting Policies and Estimates**\n\n \n\nRevenue Recognition: We recognize revenue from product\nsales when all of the following criteria for revenue recognition have been met: pervasive evidence that an agreement exists; the services\nhave been rendered; the fee is fixed and determinable and not subject to refund or adjustment; and collection of the amount due is reasonable\nassured.\n\n \n\n14\n\n \n\n \n\nPART\nII – OTHER INFORMATION"}