Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 31, 2017 | Mar. 17, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | INNOVATIVE DESIGNS INC | |
Entity Central Index Key | 1,190,370 | |
Document Type | 10-Q | |
Trading Symbol | IVDN | |
Document Period End Date | Jan. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 25,400,310 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) | Jan. 31, 2017 | Oct. 31, 2016 |
CURRENT ASSETS | ||
Cash | $ 459,007 | $ 502,777 |
Accounts receivable | 71,172 | 72,143 |
Inventory - net of obsolete inventory reserve of $40,000 | 862,512 | 936,587 |
Inventory on consignment | 1,625 | 1,625 |
Prepaid expenses | 12,155 | 17,485 |
Total current assets | 1,406,471 | 1,530,617 |
PROPERTY AND EQUIPMENT - NET | 179,195 | 176,925 |
OTHER ASSETS | ||
Advance to employee | 4,000 | 4,000 |
Deposits on equipment | 617,000 | 617,000 |
TOTAL ASSETS | 2,206,666 | 2,328,542 |
CURRENT LIABILITIES | ||
Accounts payable | 141,764 | 116,512 |
Current portion of notes payable | 15,467 | 15,467 |
Accrued interest expense | 52,554 | 49,885 |
Due to shareholders | 102,100 | 119,000 |
Accrued expenses | 92,123 | 93,333 |
Total current liabilities | 404,008 | 394,197 |
Long-term portion of notes payable | 176,444 | 188,891 |
TOTAL LIABILITIES | 580,452 | 583,088 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.0001 par value, 100,000,000 shares authorized, and 25,370,310 issued and outstanding as of January 31, 2017 and October 31, 2016 | 2,537 | 2,537 |
Additional paid-in capital | 9,455,674 | 9,455,674 |
Accumulated deficit | (7,831,997) | (7,712,757) |
Total stockholders' equity | 1,626,214 | 1,745,454 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,206,666 | $ 2,328,542 |
CONDENSED BALANCE SHEETS (Unau3
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Jan. 31, 2017 | Oct. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Inventory obsolete reserve | $ 40,000 | $ 40,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 25,370,310 | 25,370,310 |
Common stock, outstanding | 25,370,310 | 25,370,310 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Income Statement [Abstract] | ||
REVENUES - NET | $ 169,210 | $ 227,886 |
OPERATING EXPENSES: | ||
Cost of sales | 77,126 | 98,754 |
Selling, general and administrative expenses | 202,838 | 243,864 |
Total operating expense | 279,964 | 342,618 |
LOSS FROM OPERATIONS | (110,754) | (114,732) |
OTHER EXPENSE | ||
Miscellaneous expense | 1,437 | |
Interest expense | 7,049 | 18,480 |
Total other expense | 8,486 | 18,480 |
NET LOSS | $ (119,240) | $ (133,212) |
PER SHARE INFORMATION | ||
Net Loss Per Common Share (in dollars per share) | $ (0.005) | $ (0.005) |
Weighted Average Number of Common Shares Outstanding (in shares) | 25,370,310 | 24,614,082 |
CONDENSED STATEMENTS OF CHANGES
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Oct. 31, 2015 | $ 2,437 | $ 8,902,744 | $ (7,080,334) | $ 1,824,847 |
Balance at beginning (in shares) at Oct. 31, 2015 | 24,371,310 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued for services | $ 12 | 67,188 | 67,200 | |
Shares issued for services (in shares) | 120,000 | |||
Shares issued for fixed assets | $ 3 | 23,997 | 24,000 | |
Shares issued for fixed assets (in shares) | 30,000 | |||
Sale of stock | $ 85 | 461,745 | 461,830 | |
Sale of stock (in shares) | 849,000 | |||
Net loss | (632,423) | (632,423) | ||
Balance at end at Oct. 31, 2016 | $ 2,537 | 9,455,674 | (7,712,757) | 1,745,454 |
Balance at end (in shares) at Oct. 31, 2016 | 25,370,310 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (119,240) | (119,240) | ||
Balance at end at Jan. 31, 2017 | $ 2,537 | $ 9,455,674 | $ (7,831,997) | $ 1,626,214 |
Balance at end (in shares) at Jan. 31, 2017 | 25,370,310 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (119,240) | $ (133,212) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock issued for services | 52,200 | |
Depreciation | 7,730 | 2,212 |
Changes in assets and liabilites: | ||
(Increase) decrease in accounts receivable | 971 | (37,431) |
(Increase) decrease in inventory | 74,075 | (96,588) |
Decrease in deposits on inventory | 78,320 | |
Decrease in prepaid expenses | 5,330 | 6,254 |
Increase (decrease) in accounts payable | 25,252 | (473) |
Increase (decrease) in accrued interest expense | 2,669 | (40,997) |
Increase (decrease) in accrued expenses | (1,210) | 72,651 |
Net cash used in operating activities | (4,423) | (97,064) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Deposits on equipment | (147,000) | |
Capital expenditures | (10,000) | (78,299) |
Net cash used in investing activities | (10,000) | (225,299) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of stock | 314,830 | |
Payments on shareholder advances | (16,900) | (33,229) |
Payments on notes payable | (12,447) | (10,193) |
Net cash (used in) provided by financing activities | (29,347) | 271,408 |
Net decrease in cash | (43,770) | (50,955) |
CASH, BEGINNING OF YEAR | 502,777 | 1,151,904 |
CASH, END OF THE PERIOD | 459,007 | 1,100,949 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 4,380 | $ 59,477 |
Accounting Changes and Error Co
Accounting Changes and Error Corrections | 3 Months Ended |
Jan. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Accounting Changes and Error Corrections | NOTE 1. In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly Innovative Designs, Inc.’s financial position as of January 31, 2017, the changes therein for the three month period then ended and the results of operations for the three month period ended January 31, 2017 and 2016. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Jan. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 2. The financial statements included in the Form 10-Q are presented in accordance with the requirements of the Form and do not include all of the disclosures required by accounting principles generally accepted in the United States of America. For additional information, reference is made to the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2016. The results of operations for the three month period ended January 31, 2017 and 2016 are not necessarily indicative of operating results for the full year. |
INVENTORY
INVENTORY | 3 Months Ended |
Jan. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3. INVENTORY Inventory consists principally of purchased apparel inventory and House Wrap which is manufactured by the Company. Inventory is stated at the lower of cost or net realizable value on a first-in, first-out basis. Innovative Designs, Inc. (the “Company”) has decided to discontinue the manufacturing of its hunting and swimming line of apparel. The Company has booked a reserve against this inventory at January 31, 2017 and October 31, 2016 of $40,000. Management will continue to evaluate its obsolete inventory reserve throughout the year and make adjustments as needed. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jan. 31, 2017 | |
PER SHARE INFORMATION | |
EARNINGS PER SHARE | NOTE 4. EARNINGS PER SHARE The Company calculates net income (loss) per share in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 260 “Earnings per Share” |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 5. INCOME TAXES The Company accounts for income taxes in accordance with ASC Topic 740 "Income Taxes" Deferred income taxes are provided for differences between the tax bases of assets and liabilities and the financial reporting amounts at the end of the period, and for net operating loss and tax credit carryforwards available to offset future taxable income. Changes in enacted tax rates or laws result in adjustments to recorded deferred tax assets and liabilities in the periods in which the tax laws are enacted or tax rates are changed. The Company will continue to evaluate its income tax obligation throughout the year and will record a tax provision when it is necessary. |
SHIPPING AND HANDLING COSTS
SHIPPING AND HANDLING COSTS | 3 Months Ended |
Jan. 31, 2017 | |
Shipping And Handling Costs | |
SHIPPING AND HANDLING COSTS | NOTE 6. SHIPPING AND HANDLING COSTS The Company pays shipping and handling costs on behalf of customers for purchased apparel merchandise. These costs are billed back to the customer through the billing invoice. The shipping and handling costs associated with merchandise ordered by the Company are included as part of inventory as these costs are allocated across the merchandise received. With House Wrap orders, the customer pays the shipping cost. The shipping and handling costs associated with customer orders was approximately $7,900 and $9,300 for the three month periods ended January 31, 2017 and 2016, respectively. |
DEPOSITS ON EQUIPMENT
DEPOSITS ON EQUIPMENT | 3 Months Ended |
Jan. 31, 2017 | |
Deposit Assets [Abstract] | |
DEPOSITS ON EQUIPMENT | NOTE 7. DEPOSITS ON EQUIPMENT On July 12, 2015 the Company reached an agreement with Ketut Jaya to purchase the machinery and equipment utilized to produce the INSULTEX material. The purchase price is $700,000 which was to be paid in four installments. The first installment of $300,000 was to be paid at the execution of the agreement. The second installment of $200,000 was to be paid when the machinery and equipment is ready to be shipped to the United States. The third installment of $100,000 is to be paid once the machinery and equipment is producing INSULTEX, and the fourth and final installment of $100,000 is to made after the first commercial production run of INSULTEX is completed. As of January 31, 2017, the Company has made payments of $600,000. During 2016 Ketut Jaya and the Company entered into a verbal agreement, due to delays in installing and having the machinery and equipment producing insultex, to advance the third installment of $100,000. As of March 17, 2017 the machinery and equipment is not installed or producing insultex. Additionally, the Company has incurred $17,000 of additional expenses related to shipping, site improvements and installation of the equipment, during the fourth quarter of 2016. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Jan. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 8. SEGMENT INFORMATION We have organized our operations into two segments. We rely on an internal management reporting process that provides segment information for purposes of making financial decisions and allocating resources. The following tables present our business segment information for the three month period ended January 31, 2017 and 2016: 2017 2016 Revenues: Apparel $ 146,063 $ 173,011 Housewrap 23,147 54,875 Total Revenues $ 169,210 $ 227,886 Assets: Apparel $ 955,112 $ 1,690,387 Housewrap 1,251,554 1,250,114 Total $ 2,206,666 $ 2,940,501 Capital Expenditures: Housewrap $ 10,000 $ 225,299 Total $ 10,000 $ 225,299 Depreciation: Apparel $ 1,775 $ 247 Housewrap 5,955 1,965 Total $ 7,730 $ 2,212 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jan. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9. SUBSEQUENT EVENTS The Company has evaluated subsequent events in accordance with ASC Topic 855, “ Subsequent Events On February 13, 2017, the Company issued 30,000 shares of stock for services valued at $7,500. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of business segment information | The following tables present our business segment information for the three month period ended January 31, 2017 and 2016: 2017 2016 Revenues: Apparel $ 146,063 $ 173,011 Housewrap 23,147 54,875 Total Revenues $ 169,210 $ 227,886 Assets: Apparel $ 955,112 $ 1,690,387 Housewrap 1,251,554 1,250,114 Total $ 2,206,666 $ 2,940,501 Capital Expenditures: Housewrap $ 10,000 $ 225,299 Total $ 10,000 $ 225,299 Depreciation: Apparel $ 1,775 $ 247 Housewrap 5,955 1,965 Total $ 7,730 $ 2,212 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | Jan. 31, 2017 | Oct. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 40,000 | $ 40,000 |
SHIPPING AND HANDLING COSTS (De
SHIPPING AND HANDLING COSTS (Details Narrative) - USD ($) | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Shipping And Handling Costs | ||
Shipping and handling costs | $ 7,900 | $ 9,300 |
DEPOSITS ON EQUIPMENT (Details
DEPOSITS ON EQUIPMENT (Details Narrative) - USD ($) | Jul. 12, 2015 | Oct. 31, 2016 | Jan. 31, 2017 |
Deposit Assets [Abstract] | |||
Description of assets contract | The purchase price is $700,000 and to be made in four installments. The first installment of $300,000 is to be made at the execution of the agreement. The second installment of $200,000 is to be made when the machinery and equipment is ready to be shipped to the United States. The third installment of $100,000 is to be made once the machinery and equipment is producing INSULTEX, and the fourth and final installment of $100,000 is to made after the first commercial production run of INSULTEX is completed. | ||
Purchase price of equipment | $ 700,000 | ||
First installment for equipment | 300,000 | ||
Second installment for equipment | 200,000 | ||
Third installment for equipment | 100,000 | ||
Fourth installment for equipment | $ 100,000 | ||
Deposits on equipment | $ 600,000 | ||
Shipping, site improvements and installation of the equipment expenses | $ 17,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Oct. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Total Revenues | $ 169,210 | $ 227,886 | |
Assets | 2,206,666 | 2,940,501 | $ 2,328,542 |
Capital Expenditures | 10,000 | 225,299 | |
Depreciation | 7,730 | 2,212 | |
Apparel Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 146,063 | 173,011 | |
Assets | 955,112 | 1,690,387 | |
Depreciation | 1,775 | 247 | |
Housewrap Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 23,147 | 54,875 | |
Assets | 1,251,554 | 1,250,114 | |
Capital Expenditures | 10,000 | 225,299 | |
Depreciation | $ 5,955 | $ 1,965 |
SEGMENT INFORMATION (Details Na
SEGMENT INFORMATION (Details Narrative) | 3 Months Ended |
Jan. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Feb. 13, 2017 | Oct. 31, 2016 |
Value of shares issued for professional service | $ 67,200 | |
Subsequent Event [Member] | ||
Number of shares issued for professional service | 30,000 | |
Value of shares issued for professional service | $ 7,500 |