General

The following information should be read in conjunction with the financial statements and accompanying notes and in conjunction with the MD&A on Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended. October 31, 2020.

Forward-looking statements



This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact, including statements
regarding future results of operation, made in this Quarterly Report on Form
10-Q are forward-looking statements. We use words such as expects, believes,
intends, and similar expressions to identify forward-looking statements. Forward
looking-looking statements reflect management's current expectations and are
inherently uncertain. Actual results could differ materially for a variety of
reasons, including, among others, , competition in our cold weather markets, our
ability to sell out HouseWrap product line, our inability to secure sufficient
funding to maintain and/or expand our current level of operations and the
seasonality of our cold weather product line. These risks and uncertainties, as
well as other risks and uncertainties that could cause our actual results to
differ significantly from management's expectations, are described in greater
detail in our Annual Report on Form 10-K for the fiscal year ended October 31,
2020. The Company undertakes no obligation to publicity update or revise any
forward-looking statement, whether as a result of new information, future events
or otherwise except as required by law.



Background


Innovative Designs, Inc. (hereinafter referred to as the "Company", "we" or
"our") was formed on June 25, 2002. We market and sell clothing products such as
outdoor apparel, and cold weather gear called "Arctic Armor" that are made from
INSULTEX, a material with buoyancy, scent block and thermal resistant
properties. We also market our House Wrap product line which is a building
material with thermal qualities. House Wrap is also made from INSULTEX. We
obtain INSULTEX through a license agreement with the owner and manufacturer of
the material. Since our formation we have devoted our efforts to:



  ? Completing the development, design and prototypes of our products,
  ? Obtaining retail stores or sales agents to offer and sell our products,
  ? Developing our website to sell more of our products.




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                            INNOVATIVE DESIGNS, INC.



Results of Operations



Comparison of the completed three-month period January 31, 2021 with the three month period ended January 31, 2020.


                    Three Month                    Three Month
                    Period Ended                   Period Ended
                    Januray 31,        % of        Januray 31,        % of         Increase
                        2021           Sales           2020           Sales       (Decrease)       % Change

REVENUE - NET      $     40,017           100 %   $     47,426           100 %   $    (7,409 )           -16 %

OPERATING

EXPENSES

Cost of sales            18,635            47 %         20,388            43 %        (1,753 )            -9 %
Selling, general
and
administrative
expenses                 72,883           182 %         83,218           175 %       (10,335 )           -12 %
                         91,518           229 %        103,606           218 %       (12,088 )           -12 %

Loss from
operations              (51,501 )        -129 %        (56,180 )        -118 %         4,679              -8 %
Other income
(expense)                28,823            72 %            833             2 %        27,990            3360 %
Other Expense
Interest expense         (4,960 )         -12 %         (5,216 )         -11 %           256              -5 %
Depreciation
expense                  (8,327 )         -21 %         (8,327 )         -18 %             -               0 %

Net Loss           $    (35,965 )         -90 %   $    (68,890 )       
-145 %   $    32,925             -48 %




Revenues for the three month period ended January 31, 2021 were $40,017 compared
to revenues of $47,426 for the three month period ended January 31, 2020. The
decrease in revenue is attributable a decrease in our apparel products revenue,
$33,937 for the period compared to $ 43,661 for the three month period ended
January 31, 2020. The decrease in revenue for our apparel products is
attributable, in part, to the fact that during the period we devoted a
significant portion of our limited resources to the Federal Trade Commission
legal matter. HouseWrap sales were $6,080 for the period compared to $3,765 in
sales for the period ended January 31, 2020. We believe our HouseWrap sales were
adversely affected by the COVID pandemic as many contractors could not access
other building materials on account of supply chain bottlenecks. See Note 13 of
the Notes to the Condensed Financial Statements appearing elsewhere in this
Report for a description of our segment products sales. Our net loss for the
three month period ended January 31, 2021 was ($35,965).



Our Cost of Goods sold expenses were $18,635 for the three month period ended
January 31, 2021 compared to $20,388 for the three month period ended January
31, 2020. Professional fees for the three month period ended January 31, 2021
were $24,555 compared to $6,660 for the three month period ended January 31,
2020. The majority of our professional fees relate to the legal fees incurred in
connection to the FTC matter. We expect our professional fees to decrease going
forward.



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                            INNOVATIVE DESIGNS, INC.


Liquidity and capital resources



During the three month period ended January 31, 2021, we funded our operations
from revenues from sales, a loan of $200,000 and sale of our common stock in the
amount of $25,000. In May of 2020, we were granted a Paycheck Protection Program
loan in the amount of $ 33, 652. The loan was forgiven in June 2021.



Short Term: We will continue to fund our operations from sales and the sale of
our securities. We continue to pay our creditors when payments are due. We will
require more funds to be able to order the material for our INSULTEX products
and to purchase equipment needed for the manufacture of the INSULTEX product.
The Company reached an agreement with the manufacturer of the INSULTEX material
to purchase a machine capable of producing the INSULTEX material. Also included
in the proposed agreement will be the propriety formula that creates INSULTEX.
The Company took delivery of the equipment in December 2015. The Company will
have to have the machine installed and ensure that it can be operated in
compliance with all environmental rules and regulations. It is the Company
intentions to have the equipment operational but cannot currently provide a time
estimate. Among the factors affecting the time estimate are financial resources
available to the Company, finding a suitable facility and bringing technical
personal from abroad to install the equipment. The Company has currently made
deposits of $600,000 on the equipment. The Company has incurred $17,000 of
additional expenses related to shipping. The Company will produce INSULTEX under
its own brand name. See Note 10 of the Notes to the Condensed Financial
Statements.



Long Term: The Company will continue to fund its operations from revenues,
borrowings from private parties and the possible sale of our securities. Should
we not be able to rely on the private sources for borrowing and /or increased
sales, our operations would be severely affected as we would not be able to fund
our purchase orders to our suppliers for finished goods and our efforts to
produce our own INSULTEX would be delayed.

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