INNOVATIVE DESIGNS INC - FORM 10-K - XML - IDEA: XBRL DOCUMENT - January 28, 2013

Borrowings at October 31, 2012 and 2011 consisted of the following:

Maturities of long-term debt are as follows:

THE COMPANY HAS RECEIVED VARIOUS ADVANCES FROM JOSEPH RICCELLI WHICH HAVE BEEN USED TO FuND OPERATIONS. THESE advances TOTALED $84,100 AS OF OCTOBER 31, 2012. EFFECTIVE NOVEMBER 1, 2011, MANAGEMENT AUTHORIZED ACCRUED INTEREST TO BE APPLIED ON ALL ADVANCES MADE BY JOSEPH RICCELLI SINCE INCEPTION. THIS RESULTED IN INTEREST EXPENSE OF APPROXIMATELY $77,000.

In September 2005, the Company entered into a new loan agreement with James Kearney for a note payable. This new agreement is for a prior note payable of $100,000, dated July 2004. Interest of $8,000 per quarter was charged from October 2005 through October 2008. Interest accrued and due on this note was $92,000 as of October 31, 2012. The principal and interest are due and payable in full at any time after December 10, 2005. The principal balance as of October 31, 2012 and 2011 was $12,500 and $25,000, respectively.

In July 2005, the Company was approved for a low interest promissory note from the U.S. Business Administration in the amount of $280,100. The Company qualified for the loan due to the significant loss of inventory, raw materials, and equipment when its leased warehouse, in which it maintained these items, was flooded by the remnants of Hurricane Ivan in September 2004. The note bears interest at an annual rate of 2.9%. Monthly installment payments, including principal and interest of $1,186 began five months from the date of the promissory note. The note is payable over 30 years. Certain guarantees of collateral were made by the Company’s Chief Executive Officer and shareholder, Joseph Riccelli to service the note. The Company was to use the loan proceeds to repair or replace the following: approximately $6,200 for machinery and equipment; approximately $80,100 for furniture and fixtures; approximately $148,700 for inventory; and approximately $45,100 for working capital. The Company received the full amount of this loan at October 31, 2005. In January 2006 the Company amended the promissory note with the Small Business Administration increasing the principal balance to $430,500. The note still 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 each month beginning February 13, 2006. All remaining principal and accrued interest are due and payable on July 13, 2035. The loan balance was $362,076 and $374,338 at October 31, 2012 and 2011, respectively.

In July 2011, the Company entered into a note payable with Corinthian Development, LLC 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% for 120 days. This note was paid in full during the current year.

In July 2011, the Company entered into a note payable with Frank Riccelli for $10,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 120 days. This note was extended through a verbal agreement. The loan balance at October 31, 2012 was $10,000.

In August 2011, the Company entered into a note payable with Xunjin Hua for $34,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 120 days. This note was paid in full during the current year.

In June 2011, the Company entered into a note payable with the Sol & Tina Waxman Family Foundation for $50,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 180 days. The Company has pledged 250,000 shares of its stock, as collateral. This note is also personally guaranteed by the Company’s president. This note was paid in full during the current year.

In September 2011, the Company entered into a note payable with Dr. John Bailliet for $5,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 90 days. This note was paid in full during the current year.

In September 2011, the Company entered into a note payable with Darryl Zaontz for $15,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 120 days. This note was paid in full during the current year.

In September 2011, the Company entered into a note payable with Aaron Riccelli 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% for 120 days. This note was paid in full during the current year.

In October 2011, the Company entered into a note payable with Janet Thomas for $25,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 90 days. This note was paid in full during the current year.

In February 2012, the Company entered into a note payable with Roberta Riccelli for $8,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 120 days. The loan balance at October 31, 2012 was $8,000.

In March 2012, the Company entered into a note payable with Prime Rate Premium Finance for $8,477. This loan was to be used to finance insurance premiums of the Company. Monthly payments of $992 were due beginning April 10, 2012, including interest at 12.5%. The loan balance at October 31, 2012 was $1,885.

In May 2012, the Company entered into a note payable with the Sol & Tina Waxman Family Foundation for $100,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 180 days. The Company has pledged 250,000 shares of its stock, as collateral. This note is also personally guaranteed by the Company’s president. The loan balance at October 31, 2012 was $75,000.

In July 2012, the Company entered into a note payable with its president, Joseph Riccelli for $50,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 120 days. The loan balance at October 31, 2012 was $50,000.

In July 2012, the Company entered into a note payable with Darryl Zaontz for $27,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 180 days. The loan balance at October 31, 2012 was $27,000.

In July 2012, the Company entered into a note payable with Hilary Ackermann for $25,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 120 days. The loan balance at October 31, 2012 was $25,000.

In September 2012, the Company entered into a note payable with Aaron Riccelli for $50,000. This loan was to be used to fund operations of the Company. This loan is due on demand, including interest at 10% for 120 days. The loan balance at October 31, 2012 was $50,000.