U.S.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FORM 10-K/A

(Amendment No. 1)

For the transition period from __________________ to _____. ____________

Commission file number: 0-5278

IEH Corporation

(Exact name of registrant as specified in its charter)

Commission File Number0-5278

IEH CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

140 58th, Suite 8E, Brooklyn, NY 11220

(Address of principal executive offices) (Zip Code)

Issuer’sRegistrant’s telephone number, including area code:(718) 492-4440

Securities registered pursuant to Section 12(b) of the Exchange Act: None

NONE

Securities registered pursuant to Section 12(g) of the Securities Exchange Act:

Common Stock, $.01 Par Value Per Share

Indicate by check mark if Registrantthe registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yeso ☐ Nox ☒

Indicate by check mark if the Registrantregistrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act. Yeso ☐ Nox ☒

Indicate by check mark whether the Registrantregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx ☐ Noo ☒

Indicate by check mark whether the Registrantregistrant has submitted electronically and posted on its corporate Website, if any, every Interactive DateData File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to submit and post such files).o Yes ☐ No ☒

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.o

Indicate by check mark whether the Registrantregistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See definitionsthe definition of “large accelerated filer,” “accelerated filer”filer, “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrantregistrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso ☐ Nox ☒

State theThe aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference toof the price at which the common equity was last sold, or the average bid and askedregistrant on September 30, 2022, based on a closing price of such common equity, as$10.50 was $12,929,000.

As of October 6, 2023, the last business dayregistrant had 2,370,251 shares of the Registrant’s most recently completed second fiscal quarter (September 28, 2018): $18,108,029.30.

Indicate the number of shares outstanding of each of the Registrant’s classes ofits common stock, as of the latest practicable date: On July 12, 2019, the Registrant had 2,323,468 shares of common stock issued andpar value $0.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (e) under the Securities Act of 1933 (“Securities Act”).

None

EXPLANATORY NOTE

We are filing this Amendment No. 1 to Form 10-K (Amendment No. 1) on Form 10-K/A to our Annual Report on Form 10-K for the year ended March 29, 2019 (“Original Form 10-K”), which amends and restates the Original Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on July 12, 2019. The reasons for filing this Amendment No. 1 to Form 10-K on Form 10-K/A are (1) amending the Management’s Report on Internal Control over Financial Reporting to reference the date of 2013 to the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Item 9A. Controls and Procedures; (iii) amending, restating and inserting a new revised Report of Independent Registered Public Accounting Firm that coverage for the fiscal ended March 29, 2019 and March 30, 2018, and (iii) amending, restating and inserting the revised Consent of Manuel Reina, CPA, Registered Independent Accounting Firm to the date of the revised Report.

Except as described above, no other changes have been made to the Original Form 10-K, including, without limitation, no changes to the Company’s audited financial statements and accompanying notes for the fiscal year ended March 29, 2019, as set forth in Item 15 of the Original Form 10-K.

With this Amendment No. 1 on Form 10-K/A, the principal executive officer and principal financial officer of the Company have reissued their certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, respectively, including in Part IV, Item 15 and attached as Exhibits 31.1, 31.2 and 32.1 to the Amendment No. 1 on Form 10-K/A.

IEH CORPORATION

INDEX TO FORM 10-K/ATABLE OF CONTENTS

FOR THE YEAR ENDED MARCH 29, 2019

References in this Annual Report to, the terms “Company”, “IEH”, “we”, “us” and “our” refer to IEH Corporation, unless otherwise stated or the context clearly indicates otherwise.

IEH CORPORATION

Cautionary Statements Concerning Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act. Any statements contained in this report that are not statements of historical fact may be forward-looking statements. When we use the words “anticipates,” “plans,” “estimates,” “expects,” “believes,” “should,” “could,” “may,” “will” and similar expressions, we are identifying forward-looking statements. All statements that express expectations, estimates, forecasts or projections are forward-looking statements within the meaning of the Securities Act and the Exchange Act, respectively. We have based these forward-looking statements largely on our current expectations and projections about future financial events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Forward-looking statements involve risks and uncertainties whichdescribed under “Risk Factor Summary” below, “Risk Factors” in Part I, Item 1A, and elsewhere in this Annual Report on Form 10-K, and may cause our actual results, performance or achievementsinclude statements related to, be materially different from those expressed or implied by forward-looking statements.  Theseamong other things: macroeconomic factors, include our limited experience with our business plan;including inflationary pressures, supply shortages and recessionary pressures; accounting estimates and assumptions; pricing pressures on our product caused by competition; the risk that our products will not gain market acceptance; our ability to obtain additional financing; our ability to successfully prevent our registration with the SEC from being suspended or revoked and to timely file our SEC reports; our ability to operate our accounting system and material weaknesses identified in connection with our migration to such accounting system; our ability to protect intellectual property; our ability to integrate our satellite facility into our operations; and our ability to attract and retain key employees. No forward-looking statement is a guarantee of future performance and you should not place undue reliance on any forward-looking statements. Our actual results may differ materially from those projected in any forward-looking statements, as they will depend on many factors about which we are unsure, including many factors beyond our control.

Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in this report as a result of new information or future events or developments. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully review and consider the various disclosures we make in this report and our other reports filed with the Securities and Exchange Commission (“SEC”) that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business.

Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:

IEH CORPORATION

PART I

IEH Corporation (hereinafter referred to as “IEH” or the “Company”) was organized under the laws of the State ofbegan operations in New York, on March 22, 1943 under the name Industrial Heat Treating Company, Inc. On March 15, 1989, the Company changed its name to its current name. The Company’s executive offices and manufacturing facilities are located at 140 58^th Street, Suite 8E, Brooklyn, New York 11220. The Company’s telephone number is (718) 492-4440; Fax: 718-492-9898; its email address is ieh@iehcorp.com.

The majority of our customers require that we maintainin 1941 and was incorporated as a quality systemNew York corporation in strict accordanceMarch 1943, when Louis Offerman founded L. Offerman Tool & Die with ISO 9001. This is an International Standard Organization (ISO) specificationhis two sons, Bernard and we have been recently auditedSeymour.

In the late 1960’s, IEH bought a license to manufacture HYPERBOLOID sockets, and have received certification to ISO 9001:2015. Our quality policy is: “Listening to our Customers and Meeting their Needs, while Continuously Improving our Processes and Services.”

The Company has developed a web site that reflects the standard catalog items produced along with custom offerings. New product lines currently under development will be added later this year. You can view it by going to: http://www.iehcorp.com.

The Company designs, develops and manufacturesbegan making printed circuit board (“PCB”) connectors for the defense and aerospace industries, in accordance with the MIL-DTL-55302 military specification.  We have been making these connectors and custom interconnectsvariations of them ever since, and today, we are one of the leaders in HYPERBOLOID connectors and contacts.

In use for high performance applications. Allnearly 50 years under demanding conditions, HYPERBOLOID technology has proven itself to be the leading design for integrity and reliability. On avionics platforms, military and commercial aerospace equipment, engine control systems, missiles and torpedoes, vehicular electronics, satellites and rocket launchers, medical devices, industrial and environmental controls, test equipment, pin grid array (“PGA”) sockets and countless other rugged applications, HYPERBOLOID aims to be the highest reliability connector available.

At IEH, we design and manufacture HYPERBOLOID connectors that not only accommodate, but exceed military and aerospace specification standards. Years after inception, our HYPERBOLOID solutions continue to prove their reliability and benefits. Our engineers have long provided reliable and innovative HYPERBOLOID interconnect solutions for defense, commercial, aerospace and medical use.

We are a family managed business, as Louis’ great-grandson David is the President and Chief Executive Officer, and we believe that we still manufacture the highest quality products for the most demanding environments. But most importantly, we are always looking ahead. We are committed to developing new technology that meets the demands of our connectors utilize the HYPERBOLOID contact design, a rugged, high-reliability contact system ideally suited for high-stress environments. We believefast-paced customers, and we are the only independent producer of HYPERBOLOID printed circuit board connectorssteadfast about always exceeding our customers’ expectations.

IEH serves customers in the United States.

States and internationally. Our customers consist of OEMs (Original Equipment Manufacturers)include defense contractors, commercial aerospace equipment manufacturers, medical device manufacturers, oil and distributors who resell our products to OEMs.gas exploration firms, and commercial space launch companies. We sell our productsboth directly and through 25 independent sales representativesdistributors.  We maintain a Military Specification QPL (Qualified Product Listing), and distributors located in all regions ofan ISO (International Standards Organization) 9001:2015 Certification.

For the United States, Canada, the European Union (EU), Southeast Asia, Central Asiafiscal years ending March 31, 2023 and the Middle East.

The customers we service are in the Military, Aerospace, Space, Medical, Oil2022, approximately 56.3% and Gas, Industrial, Test Equipment and Commercial Electronics markets. We appear on the Military Qualified Product Listing “QPL” to MIL-DTL-55302 and supply customer requested modifications to this specification. Sales to the Commercial electronics (inclusive of commercial aerospace, space, oil & gas, medical and miscellaneous markets) and Military markets were 49.9% and 50.1%59.1%, respectively, of the Company’s net sales were for defense applications, 25.7% and 14.7%, respectively, for commercial aerospace, and 18.0% and 26.2%, respectively, for the year ended March 29, 2019. Our offering of “QPL” items has recently been expanded to include additional products.

In order to remain competitive, the Company has an internal program to upgrade, addremainder for commercial space launch, medical, oil and maintain machinery, review material costsgas and increase labor force productivity. During the fiscal years ended March 29, 2019 and March 30, 2018, the Company purchased several machines to increase the productivity of certain processes. This will help us meet this goal.industrial markets.

New Product DevelopmentDevelopment:

The Company is sought after by manyIEH continues to expand the scope and range of its customersPCB connector offerings. We have also increased the breadth of our products by introducing high-speed connectors for data transmission, as well as hybrid power/signal connectors.  New product developments are primarily driven by customer demand. IEH also continues to designspecialize in custom interconnects designed specifically for customer applications.  Our engineers work in conjunction with customer engineers to create, refine and manufacture custom connectors. This has created many new productsconnectors and interconnect solutions that meet their specific, demanding needs.  IEH engineers are renowned for their flexibility and creativity in solving customer interconnect challenges and providing innovative designs and employ new technologies. The Company continues to be successful because of its ability to assist its customers and create new designs, including engineering drawing packages, in a relatively short period of time. We will continue to support our customers to the best of our ability.solutions.

A recent product line featuring high-speed and hybrid power signal connectors has been added to the Company’s product offering. The Company expects to recognize meaningful revenue from these product lines and we expect it to contribute substantially to the bottom line in the coming years.

The standard printed circuit board connectors we produce are continually being expanded and utilized in many of the military programs being built today. We have recently received approval for additional products that we can offer under the Military Qualified Product Listing “QPL.”

IEH CORPORATION

PART I

Item 1.      Business(continued)

Commitments

The Company has a collective bargaining multi-employer pension plan (“Multi-Employer Plan”) with the United Auto Workers of America, Local 259 (the “Union”). Contributions are made in accordance with a negotiated labor contract and are based on the number of covered employees employed per month. With the passage of the Multi-Employer Pension Plan Amendments Act of 1990 (the “1990 Act”), the Company may become subject to liabilities in excess of contributions made under the collective bargaining agreement. Generally, these liabilities are contingent upon the termination, withdrawal, or partial withdrawal from the Multi-Employer Plan. The Company has not taken any action to terminate, withdraw or partially withdraw from the Multi-Employer Plan nor does it intend to do so in the future. Under the 1990 Act, liabilities would be based upon the Company’s proportional share of the Multi-Employer Plan’s unfunded vested benefits, Based upon such Plan’s information and data as of December 31, 2018 furnished to the Company (including, without limitation, unfunded vested benefits, accumulated benefits and net assets), such Plan is fully funded. Based thereupon, the Company’s proportional share of the liability through December 31, 2018 is fully funded. The total contributions charged to operations under such Plan were $65,075 for the year ended March 29, 2019 and $151,314 for the year ended March 30, 2018.

Marketing and SalesSales:

The market for connectors and interconnect devices, domestic and worldwide, is highly fragmented as a result of the manufacture by many companies of a multitude of different types and varieties of connectors and interconnects. For example, connectors include: printed wiring board, rectangular I/O, circular, planar (IOC)(“IOC”) RF coaxial, IC socket and fiber optic. The Company has been servicing a niche in the market by manufacturing connectors containing HYPERBOLOID contact designs in the printed wiring board style of connectors.

The Company is continuously experimenting with innovative connection designs, which may cause it to alter its marketing plans in the future if a market should develop for any of its current or future innovative designs. The Company is continually reviewing product lines being sold in the connector and interconnect marketplace. We are committed to expanding our product offering and we consider that many of our current or future custom designs will become product lines.

The Company’s products are marketed to OEM’s (OriginalOriginal Equipment Manufacturers)Manufacturers (“OEM”) directly and through authorized representatives and distributors serving primarily the Military,Defense, Aerospace, Medical, Space, Industrial, Test Equipment and Commercial Electronics markets. The Company is also involved in developing new connectors for specific uses, which result from changes in technology. The Company assists customers in the development and design of connectors for specific customer applications. This service is marketed to customers who require the development of connectors and interconnection devices specially designed to accommodate the customers’ own products.

The Company is primarily a manufacturer and its products are essentially basic components of larger assemblies of finished goods. Approximately 90%During the year ended March 31, 2023, there were no individual customers whose revenues were 10% or more of the Company’s net sales forrevenues. During the yearsyear ended March 29, 2019 and March 30, 2018, respectively, were made directly to manufacturers of finished products with the balance31, 2022, approximately 37.1% of the Company’s products sold to distributors. Distributors often purchase connectors for customers who do not require large quantities of connectors over a short period of time but rather require small allotments of connectors over an extended period of time.

During the fiscal year ended March 29, 2019, two customers accounted for $7,451,032 constituting 26.2% of the Company’s net sales. One of those customers accounted for 13.7% of the Company’stotal net sales while the second customer accounted forrepresented three customers, and consisted individually of 12.5%, 12.3% and 12.3% of the Company’s net sales.revenues.

During the fiscal year ended March 30, 2018, one customer accounted for $2,685,250 constituting 11.4% of the Company’s net sales.

The Company currently employs 2522 independent sales representativesorganizations to market its products in all regions in the United States as well as in Canada, the European Union (EU)(“EU”), Southeast Asia, Central Asia and the Middle East. These

IEH CORPORATION

PART I

Marketing and Sales(continued)

independent sales representatives also promote the product lines of other electronics manufacturers; however, they do not promote the product lines of manufacturers which compete directly with the Company’s products. These sales representatives accounted for approximately 95%75% of Companythe Company’s net sales for the fiscal year ended March 29, 201931, 2023 (with the balance of Company net sales being generated via direct customer contact).

International sales accounted for approximately 18.3%14.8% and 23.8% of net sales for the yearfiscal years ended March 29, 201931, 2023 and 20%2022, respectively. Approximately 39.8% and 68.2% of the aforementioned international net sales for the yearfiscal years ended March 30, 2018, respectively.31, 2023 and 2022, respectively, represent sales to customers located in China.

We also market our products and capabilities through our website, www.iehcorp.com. Our product series HBH Hybrid Power/Signal HYPERBOLOID Connectors, has a configuration tool that allows users to build their own hybrid connector and download 3D models to incorporate into their modules. 

Backlog of Orders/Capital RequirementsRequirements:

TheOur customers typically enter into supply arrangements for the purchase of our products which we will produce and deliver over time. On an as-needed basis, our customers place specific production orders, and these orders are generally filled and shipped within twelve weeks. Our backlog consists of supply arrangements where the anticipated unfulfilled shipping dates are within approximately twelve months. Because of the possibility of customer changes in delivery schedules or the cancellation of orders, for the Company’s productsour backlog as of any particular date may not be indicative of revenue in any future period. The backlog amounted to approximately $18,407,000$13,724,000 at March 29, 201931, 2023 as compared to $15,658,000$7,909,000 at March 30, 2018. 31, 2022. The increase in total backlog as of March 31, 2023 compared with the previous year is primarily due to increases in aerospace and defense customer demand, driven in large part by the recovery of commercial aviation after the earlier grounding of the Boeing 737 Max jet and the impact of COVID-19, as well as increases in orders from our defense customers.

A portion of these backlog orders are subject to cancellation or postponement of delivery dates and, therefore, no assurance can be given that actual sales will result from these orders. The Company does not foresee any problems which would prevent it from fulfilling itsthese orders.

Forward Looking Business Trends:

Impact of COVID-19 and Other Factors:

Since early 2020, the world has been impacted by the novel coronavirus (COVID-19) pandemic. In previous periods, COVID-19 (including its variants and mutations) and measures to prevent its spread disrupted our business in a number of ways, including strains on supply chains, and general economic conditions. Although restrictions in the United States have largely been lifted, in international markets, such as in China, there continue to be disruptions from the COVID-19 pandemic. If new COVID-19 variants emerge or additional governmental restrictions are imposed domestically or internationally, our business may be harmed. For example, in the future, the COVID-19 pandemic may cause reduced demand for certain products we provide. We are not able to predict the full extent of the impact of the COVID-19 pandemic on our financial and operating results and how the COVID-19 pandemic will evolve domestically and internationally.

Additionally, our operations are subject to global economic and geopolitical risks. For example, while the Company does not have a presence in these regions, the ongoing conflict between Russia and Ukraine has impacted economic activity as well as the availability and price of raw materials and energy. The Company continues to actively monitor these factors and find ways to mitigate the impact on its operations.

For additional information on risk factors that could impact our results, please refer to “Risk Factors” in Part II, Item 1A of this Form 10-K.

Competition:

The design, development, manufacture and distribution of electrical connectors and interconnection devices is a highly competitive field. The Company principally competes with both large and small companies who also produce high performance connectors in printed circuits and wiring boards for high technology application.applications. The Company competes by adapting certain technologies to meet specific product applications, producingaiming to produce connectors cost-effectively, and through its production capabilities. In addition, there are many companies who offer connectors with designs similar to those utilized by the Company and are direct competitors of the Company.

The primary basis upon which the Company competes is product performance and production capabilities. The Company usually receives job orders after submitting bids pursuant to customer-issued specifications for connectors and interconnects. The Company’s bid can be for a new item that requires the item to perform under harsh environment requirements or it can be for a standard catalog item. The Company also offers engineering services to its customers in designing and developing connectors for specialized products and specific customer applications. This enables the Company to receive a competitive advantage over those companies who basically manufacture connectors based solely or primarily on cataloged specifications.

ManySome of the Company’s competitors may have greater financial resources than the Company and no assurances can be given that the Company will be able to compete effectively with these companies in the future.

Suppliers of Raw Materials and Component PartsParts:

The Company utilizes a variety of raw materials and manufactured component parts, which it purchases from various suppliers. These materials and components are available from numerous sources and the Company does not believe that it will have a problem obtaining such materials and parts in the future.

However, any delay in the Company’s ability to obtain necessary raw materials and component parts may affect its ability to meet customer production needs. In anticipation of such delays, the Company carries an inventory of raw materials and component parts to avoid shortages and to insure continued production. However, as global supply chains continue to be constrained, there can be no certainty that we will not be affected in the future, and we believe that there is risk that raw materials and supply chains will continue to be affected in 2024.

Additionally, inflationary pressures have been impacting virtually all aspects of our materials and suppliers, including power prices and labor costs, and are likely to impact our fiscal year 2024 results.

Employees

The Company presently employs approximately 199

Human Capital Management:

Our employees are our greatest resource and an integral component to our operations. Their health, safety and well-being is a priority for us.

Talent

We are focused on sourcing, attracting, and retaining talent, especially those with technical backgrounds. We recognize and reward performance while continually working to develop, engage and retain high-performing employees. We have made significant investments to provide ongoing training and career development for our employees. We provide competitive compensation and comprehensive benefits.

As of March 31, 2023, we employed 156 people two (2) of whomwhich 154 are executive officers; six (6) are engaged in management activities; eight (8) provide general and administrative services; and approximately 183 are employed in manufacturing and testing activities.full-time employees. Most of the employees engaged in manufacturing and testing activities are covered by

IEH CORPORATION

PART I

a collective bargaining agreement with the Union,United Auto Workers of America, Local 259 (the “Union”), which will expireexpires on March 31, 2021.2024. The Company believes that it has a good relationship with its employees and the Union.Union and has not experienced any significant work stoppages or other labor problems.

Diversity and Inclusion

We treat each other with respect and value each individual’s unique perspective and background. We are committed to a culture where everyone belongs and diversity and inclusion drives business results. Diversity is crucial to our ongoing success to manage our business.

Safety/Health and Wellness

We are committed to providing a safe and healthy work environment for our employees. Aligned with our values, we strive to continuously monitor our work environment to keep our employees safe. We have an open-door policy for all employees to report concerns or safety issues. Our commitment to employee safety also includes ongoing safety communications with safety topics and providing safety training.

Governmental RegulationsRegulations:

The Company is subject to federal regulations, principally under the Occupational Safety and Health Act (“OSHA”) and the Defense Supply Command Columbus (“DSCC”).

OSHA provides federal guidelines and specifications to companies in order to insure the health and safety of employees.

DSCC oversees the quality and specifications of products and components manufactured and sold to the government and the defense industry. DSCC’s primary customer is the U.S. military. Many of our products appear on the DSCC Qualified Products Listing (“QPL”). To remain qualified, the Company submits its products to an outside testing laboratory which performs all required testing. After review by the Company of the testing results the data is then submitted to the DSCC. The Company and its products are only approved and remain on the QPL if the Company has passed all testing requirements. Although DSCC continuously requires products to an outside testing laboratory which performs all required testing. After review by the Company of the testing results the data is then submitted to the DSCC. The Company and its products are only approved and remain on the QPL if the Company has passed all testing requirements. Although DSCC continuously requires suppliers to meet changing specifications, the Company has not encountered any significant problems meeting such specifications and its products have, in the past, been approved. The Company is unaware of any changes in the Government’s regulations which are expected to materially affect the Company’s business.

Available Information

We are a “smaller reporting company”

Our website is www.iehcorp.com. On our website we make available at no cost our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished as defined by Regulation S-K andsoon as reasonably practicable after we electronically file such are not requiredmaterial with, or furnish them to, provide the SEC. The information contained inon our website is not a part of this item pursuant to Regulation S-K. Notwithstanding the foregoing sentence, the Company is providing the following information concerning risk factors:annual report on Form 10-K.

You

In evaluating our company and our business, you should carefully consider the risks and uncertainties described below, together with all of following risk factors and the other information included in this report,Annual Report on Form 10-K. The occurrence of one or more of the events or circumstances described in consideringthese risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on our business, herein as well asreputation, revenue, financial condition, results of operations or future prospects, in which case the information included inmarket price of our common stock could decline, and you could lose part or all of your investment. The material and other reports and prospects. The risks and uncertainties summarized in this Annual Report on Form 10-K and described below are not intended to be exhaustive and are not the only ones facing our Company.we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also may impair our business operations, financial condition and/or operating results. If any of the matters or events describedbusiness. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the followingforward-looking statements as a result of a number of factors, including the risks actually occurs, our business, financial condition or results of operations could be harmed. In such case,described below. See the trading price of our common stock could decline, and you may lose all or part of your investment due to any of these risks.section titled “Cautionary Statement Regarding Forward-Looking Statements”.

Risks Related to Our BusinessBusiness:

FailureWe operate in a niche industry and our business results may vary from year to increaseyear depending upon, among other things, the nature of the ordering cycle of our revenueproducts which makes it hard to predict demand for our business and keepmay adversely impact our expenses consistent with revenues could prevent usbusiness and results of operations.

We manufacture PCB connector offerings for specialized applications and our customers include defense contractors, commercial aerospace equipment manufacturers, medical device manufacturers, oil and gas exploration firms, and commercial space launch companies. Our products are typically a small part in a larger end product used by our customers. Supply shortages or other factors impacting third party suppliers that supply different parts to our customers for use in the same end product in which our product is used can impact demand for our products. For example, we believe that recent supply shortages for parts produced by other manufacturers in the end product in which our product is used has caused delays in ordering our products. In addition, due to the specialized nature of our products, we often manufacture limited quantities of our products. Since we are producing customized products in smaller quantities, we are not able to achieve economies of scale, we are unable to obtain bulk discounts on our orders for raw materials and sometimes the fulfillment of the supply of the raw materials used in our products is delayed because our suppliers may prioritize larger orders. All of these factors may have an adverse impact on our business and results of operations.

In addition, the ultimate end product in which our products are used have long and irregular ordering cycles which may cause our business results to vary year to year. For example, some of our products are used in airplanes which often are operable for about thirty years and thus are replaced over longer time horizons than many other products and are susceptible to changes in the demand for travel. The ordering cycle for our customers is often irregular and hard to predict. For example, our sales have declined, generally on a quarter over quarter basis, from achieving and maintaining profitability.

We have generated net income of $5,160,776, $2,565,559, and $1,473,976, respectively, for the fiscal yearsquarter ended

March 29, 2019, March September 30, 2018, and2020 through the quarter ended March 31, 2017. 2023, and we are unable to predict if or when they will increase in the future. This makes it difficult for us to anticipate when demand increases will occur and adjust our business and ordering to accommodate fluctuations in demand. If we are not able to ramp production up or down quickly enough in response to rapid changes in demand, we may not be able to effectively manage our costs, which could negatively impact operating results, and we may lose sales and market share.

The results forloss of certain substantial customers could materially and adversely affect us.

During the fiscal year ended March 29, 2019 reflect31, 2023, there were no individual customers whose revenues were 10% or more of the completionCompany’s net revenues. During the year ended March 31, 2022, approximately 37.1% of the Company’s total net sales were from three customers, and consisted individually of 12.5%, 12.3% and 12.3% of our total net sales for the year. We believe that the loss of one or more of our larger customers could have a largematerial adverse effect on our financial position and results of operations.  We have experienced significant concentrations of customers in prior years. Furthermore, factors that negatively impact the businesses of our major customers could materially and adversely affect us even if the customer contractrepresents a relatively small part of our net sales.

We may need additional funding in the amount of $3,766,000 which was fulfilled byfuture and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our production or business efforts.

Although we have enough working capital in the end of the first fiscal quarter. Our reasonable expectation at this time is that this customer’s business will not be repetitive and accordingly there can be no assurance that the operating revenues in future fiscal quarters will equal or exceed the results of the first fiscal quarter. We have expended, and will continue to be required to expend, substantial funds to pursue product development projects, enhance our marketing and sales efforts and to effectively maintain business operations. Therefore,short term, we willmay need to generate higher revenues to achieve and maintain profitability and cannot assure you that we will be profitableraise additional funding in any future period.

IEH CORPORATION

PART II: OTHER INFORMATION

Item 1A. Risk Factors(continued)

Risks Related to Our Business(continued)

Our capital requirements are significant and we have historically partially fundedconnection with our continuing operations through the financing of our accounts receivable.

We have an existing accounts receivable financing agreement with a commercial finance company whereby we can borrow up to 80 percent of our eligible receivables at an interest rate of 2.5% above JP Morgan Chase’s publicly announced prime rate with a minimum rate of 6% per annum. No assurances can be given that this financing agreement will continue intodebt or equity markets in the future. If we are unable to continueraise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our business efforts. Any capital raising efforts would also be impacted by our administrative proceeding with this agreement,the SEC pursuant to Exchange Act section 12(j), and whether the SEC suspends for up to twelve months, or revokes, the registration of our cash flow mightsecurities. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our business. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Additionally, market volatility resulting from macroeconomic conditions or other factors could also adversely impact our ability to access capital as and when needed. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities would dilute all of our stockholders and may decrease our stock price. The incurrence of indebtedness could result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell, or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with partners or others and we may be required to relinquish rights to some of our intellectual property or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. If we are unable to obtain funding on a timely basis, our business, financial condition and results of operations may be materially affected.

Our failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debt or equity capital.

We did not file our Quarterly and Annual Reports for the years ended March 31, 2022 and March 31, 2021 and the related quarterly periods until we filed a Form 10-K for these periods on June 22, 2023. The Quarterly and Annual reports for the fiscal year ended March 31, 2023 and the related quarterly periods were not filed until October 6, 2023. Thus, we have not remained current in our reporting requirements with the SEC. We are not currently eligible to use a registration statement on Form S-3 that would allow us to continuously incorporate by reference our SEC reports into the registration statement, or to use “shelf” registration statements to conduct offerings, until approximately one year from the date we regain and maintain status as a current filer. If we wish to pursue an offering now, we would be required to conduct the offering on an exempt basis, such as in accordance with Rule 144A, or file a registration statement on Form S-1. Using a Form S-1 registration statement for a public offering would likely take significantly longer than using a registration statement on Form S-3 and increase our transaction costs, and could, to the extent we are not able to conduct offerings using alternative methods, adversely impact our ability to raise capital or complete acquisitions of other companies in a timely manner.

The Company may have limited intellectual property protection.

The Company possesses certain proprietary intellectual property, including but not limited to, trade secrets, know-how and proprietary processes. The Company relies on this intellectual property, know-how and other proprietary information, and requires employees, consultants and suppliers to sign confidentiality agreements. However, these confidentiality agreements may be breached, and the Company may not have adequate remedies for such breaches. Third parties may independently develop substantially equivalent proprietary information without infringing upon any proprietary technology. Third parties may otherwise gain access to proprietary information and adopt it in a competitive manner. Any loss of intellectual property protection may have a material adverse effect on the business, results of operations or prospects.

We are a niche manufacturer of highly engineered products that are high value/short run, using a unique mix of labor and capital equipment.

Our engineers provide HYPERBOLOID interconnect solutions for defense, commercial, aerospace and medical use. Our products are specialized and require special equipment and skilled workers to operate our machinery. Our reliance on our skilled labor and capital equipment subjects us to a number of risks that could negatively affect our ability to manufacture our products and harm our business, including interruption of supply. We expect our overall reliance on our mix of labor and capital equipment to continue. Any significant delay or interruption in our mix of labor and capital equipment could impair our ability to meet the demand of our customers and could harm our business. With changes in demand, labor costs, and capital equipment costs, there can be no assurance that we will be able to maintain the labor and capital equipment mix and therefore maintain our margins.

A significant design, manufacturing or supplier quality issue could adversely affect profitability. 

As a manufacturer of highly engineered products, the performance, reliability and productivity of the Company’s products are some of its competitive advantages. While the Company prides itself on implementing procedures to ensure the quality and performance of its products and suppliers, a significant quality or product issue, whether due to design, performance, manufacturing or supplier quality issue, could lead to scrapping of raw materials, finished goods or returned products, the deterioration in a customer relationship, or other action that could adversely affect costs, future sales and profitability.

In December 2021, we opened a secondary facility in Allentown, PA and if we are unable to successfully achieve the planned volume and operating capacity in this facility, our manufacturing and business could be adversely impacted.

In December 2021, we opened a new manufacturing facility in Allentown, PA. We have commenced operations and have initially staffed and equipped the facility for targeted levels of production. We expect to continue to add staff and equipment within the facility as we target higher levels of production at the facility. We will need to hire additional personnel to staff and maintain this facility with the technical qualifications to do so. Labor is subject to external factors that are beyond our control, including our industry’s competitive market for skilled workers. Cost, inflation and workforce participation rates are additional factors that could impact our ability to effectively hire additional staffing. The failure to achieve targeted levels of production at the facility and the failure to successfully hire and train qualified personnel for the new facility could seriously harm our business and prospects. In addition, ramping up production at the new facility is time intensive, costly and inefficient. If we are unable to successfully ramp up and operate at targeted levels, our business and results of operations may be adversely affected.

A shortage of availability or an increase in the cost of raw materials and other resources may adversely impact our ability to manufacture our products at cost effective prices and thus may negatively impact profit margins.

Our results of operations may be materially adversely impacted by difficulties in obtaining raw materials, supplies, power, labor and any other items needed for the production of our products, as well as by the effects of quality deviations in raw materials and the effects of significant fluctuations in the prices. Many of these materials and components are produced by a limited number of suppliers and their availability to us may be constrained by supplier capacity. In 2021, pandemic-related issues created port congestion and intermittent supplier shutdowns and delays, resulting in additional expenses and increasing prices of raw materials generally.  In recent periods, we have seen the impacts of inflation drive up costs of materials and labor significantly. Any material disruption to or continuing increases in prices of our raw materials and other resources could materially adversely affect our financial results.  Profit margins will be materially and adversely impacted if we are not able to reduce our costs of production, introduce technological innovations, or pass through cost increases to customers.

We may be subject to work stoppages at our facilities or those of our principal customers and suppliers, which could seriously impact the profitability of our business.

Our unionized workforce and those of our customers and suppliers may experience work stoppages during collective bargaining agreement negotiations. In the future, if we are unable to negotiate an acceptable new agreement with the union, upon expiration of the existing contract, we could experience a strike or work stoppage. Contingency plans have been developed that would allow production to continue in the event of a strike.

Our success is dependent on the performance of our management and the cooperation, performance and retention of our executive officers and key employees.

Our business and operations are substantially dependent on the performance of our senior management team and executive officers. If our management team is unable to perform it may adversely impact our results of operations and financial condition. We do not maintain “key person” life insurance on any of our executive officers. The loss of one or several key employees could seriously harm our business. Any reorganization or reduction in the size of our employee base could harm our ability to attract and retain other valuable employees critical to the success of our business.

If we lose key personnel or fail to integrate replacement personnel successfully, our ability to manage our business could be impaired.

Our future success depends upon the continued service of our key management, technical, sales, finance, and other critical personnel. We cannot assure you that we will be able to retain them. Key personnel have left our Company in the past and there likely will be additional departures of key personnel from time to time in the future. The loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of Company initiatives, the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, and the results of our operations. In addition, hiring, training, and successfully integrating replacement sales and other personnel could be time consuming, may cause additional disruptions to our operations, and may be unsuccessful, which could negatively impact future revenues.

We are a small business that competes globally in a competitive industry that is highly fragmented.

The market for connectors and interconnect devices, domestic and worldwide, is highly fragmented as a result of the manufacture by many companies of a multitude of different types and varieties of connectors and interconnects. The Company has been servicing a niche in the market by manufacturing connectors containing HYPERBOLOID contact designs in the printed wiring board style of connectors. The connector and interconnect device industry is competitive and fragmented and includes numerous small organizations capable of competing in the markets we target. Although large companies tend to not compete directly with us due to the customized and small batch nature of our business, large companies compete in adjacent industries and possess substantially greater financial and other resources than we do. Larger competitors’ greater resources could allow those competitors to compete more effectively than we can. Our competitors have successfully built their names in the industry in which we compete. These various competitors may be able to offer products more competitively priced and more widely available than our offerings, and also have greater resources to acquire members and suppliers than us. Failure to compete in the industry in which we operate would adversely affect our results of operations.

Our reportedresults of operations and financial results couldcondition have been and may in the future be adversely affectedimpacted by the COVID-19 pandemic.

Occurrences of epidemics or pandemics, depending on their scale, may cause different degrees of disruption to the regional, state and local economies in which we offer our products. The COVID-19 pandemic caused changes in financial accounting standardscustomer behavior, as well as economic disruptions. Although consumer activity has improved since the start of the pandemic and government restrictions have been lifted in the United States, recovery varies globally and the ongoing COVID-19 pandemic and its effects continue to evolve. Supply chain issues, inflationary pressures, the emergence of new variants and the reinstatement and subsequent lifting of restrictions and health and safety related measures in response to the emergence of new variants have contributed in the past to the volatility of ongoing recovery. We are unable to predict the future path or by the applicationimpact of any global or regional COVID-19 resurgences, including existing or future accounting standardsvariants, or other public health crises. The reinstatement and subsequent lifting of these measures may occur periodically, which could adversely affect our business, operations and financial condition, as well as the business, operations and financial conditions of our customers and suppliers.

Accounting Related Risks and Other Factors:

Management identified material weaknesses in our internal control over financial reporting. Such weaknesses may lead to additional risks and uncertainties, including stockholder lawsuits or other actions, loss of investor confidence and negative impacts on our stock price. Failure to achieve and maintain effective internal control over financial reporting could result in our failure to accurately or timely report our financial condition or results of operations, which could have a material adverse effect on our business and stock price.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on the effectiveness of our system of internal control. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. GAAP. As a public company, we are required to comply with the Sarbanes-Oxley Act and other rules that govern public companies. In particular, we are required to certify our compliance with Section 404 of the Sarbanes-Oxley Act, which requires us to furnish annually a report by management on the effectiveness of our internal control over financial reporting.

Management performed an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2023 and concluded that our internal control over financial reporting was not effective as of March 31, 2023, as certain of the Company’s controls associated with reconciliations of inventory and cost of products sold were not operating effectively. Further, the Company has not fully established an effective control environment due to the ineffective design and implementation of Information Technology General Controls (“ITGC”). The Company’s ITGC deficiencies included improperly designed controls pertaining to change management and user access rights over systems that are critical to the Company’s system of financial reporting. We have taken and continue to take remedial steps to improve our internal control over financial reporting. For further discussion of the material weaknesses identified and our remedial efforts, see Item 9A, Controls and Procedures.

Management is working to remediate the identified material weaknesses. Remediation efforts place a significant burden on management and add increased pressure to our financial resources and processes. We may not be able to fully remediate these material weaknesses until additional steps have been completed and have been operating effectively for a sufficient period of time. We cannot assure you that the measures we have taken to date and plan to take will be sufficient to remediate the material weaknesses we identified or avoid the identification of additional material weaknesses in the future. If we are unable to successfully remediate our existing material weaknesses or any additional material weaknesses in our internal control over financial reporting that may be identified in the future in a timely manner, the accuracy and timing of our financial reporting may be adversely affected; our liquidity, our access to capital markets, the perceptions of our creditworthiness and our ability to complete acquisitions may be adversely affected; we may be unable to maintain or regain compliance with applicable securities laws, applicable listing requirements and other requirements; we may be subject to regulatory investigations and penalties; investors may lose confidence in our financial reporting; our reputation may be harmed; we may suffer defaults, accelerations or cross-accelerations under our debt instruments or derivative arrangements to the extent we are unable to obtain additional waivers from the required creditors or counterparties or are unable to cure any breaches; and our stock price may decline.

Moreover, because of the inherent limitations of any control system, material misstatements due to error or fraud may not be prevented or detected and corrected on a timely basis, or at all. If we are unable to provide reliable and timely financial reports in the future, our business as it evolves.and reputation may be further harmed. Restated financial statements and failures in internal control may also cause us to fail to meet reporting obligations, negatively affect investor and customer confidence in our management and the accuracy of our financial statements and disclosures, result in events of default under our banking agreements, or result in adverse publicity and concerns from investors and customers, any of which could have a negative effect on the price of our common stock, subject us to regulatory investigations and penalties or stockholder litigation, and have a material adverse impact on our business and financial condition.

Efforts to comply with the applicable provisions of Section 404 of the Sarbanes-Oxley Act involve significant expenditures, and non-compliance with Section 404 of the Sarbanes-Oxley Act may adversely affect us and the market price of our common stock.

Under current SEC rules, we are required to report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We are required to review on an annual basis our internal control over financial reporting, and on a quarterly and annual basis to evaluate and disclose changes in our internal control over financial reporting. As a result, we expect to incur additional expenses that may negatively impact our financial performance. This process also results in a diversion of management’s time and attention. We cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or the impact of the same on our operations, and we may not be able to ensure that the process is effective or that our internal control over financial reporting is or will be effective in a timely manner. In the event that we are unable to maintain or achieve compliance with the applicable provisions of Section 404 of the Sarbanes-Oxley Act and related rules, we and the market price of our common stock may be adversely affected.

We identified certain misstatements to our previously issued financial statements and have restated the financial statements described below, which has exposed us to a number of additional risks and uncertainties.

On June 22, 2023, we filed our Form 10-K for the fiscal years ended March 31, 2022, 2021, and 2020. Included therein, we reported that we had restated our previously issued audited financial statements for the year ended March 31, 2020 and our interim financial statements for the quarterly periods ended September 27, 2019 and December 31, 2019. We further reported that these restatements were in connection with the Company’s migration to its then new accounting system, including the reconciliation of the old and new systems.

As a result of the enactmentmisstatements and the restatement, we have become subject to a number of additional risks and uncertainties and unanticipated costs for accounting, legal and other fees and expenses, including risks of lawsuits. Any actions, lawsuits or other legal proceedings related to the misstatements or the restatement could result in reputational harm, legal defense and other costs, regardless of the outcome of the lawsuit or proceeding. In addition, we continue to be at risk for loss of investor confidence, loss of key employees, changes in management or our board of directors and other reputational issues, all of which could have a material adverse effect on our business, financial position and results of operations.

Our ongoing efforts to remediate our internal control weaknesses may continue to divert management from the operation of our business. The absence of timely and accurate financial information has hindered and may in the future hinder our ability to effectively manage our business.

The Board of Directors, members of management, and our accounting and other staff previously has spent significant time on the restatement and remediation and will continue to spend significant time on remediation of internal control over our financial reporting. These resources have been, and will likely continue to be, diverted from the strategic and day-to-day management of our business and may have an adverse effect on our ability to accomplish our strategic objectives.

We may face litigation and regulatory action relating to the restatement of our financial statements.

We cannot ensure that litigation or other claims by shareholders will not be brought in the future arising out of the restatement of our financial statements. We may also be subject to further examinations, investigations, proceedings and orders by regulatory authorities, including a cease and desist order, suspension of trading of our securities, delisting of our securities and/or the assessment of possible civil monetary penalties. Any such further actions could be expensive and damaging to our business, results of operations and financial condition.

We have incurred and expect to continue to incur significant expenses related to the restatement and remediation of deficiencies in our internal control over financial reporting and disclosure controls and procedures, and any resulting litigation.

We have devoted and expect to continue to devote substantial internal and external resources towards remediation efforts relating to the restatement of our financial statements, the management review process and other efforts to implement effective internal controls. Because of these efforts, we have incurred and expect that we will continue to incur significant fees and expenses for legal, accounting, financial and other consulting and professional services, as well as the implementation and maintenance of systems and processes that will need to be updated, supplemented or replaced. As described in this Annual Report on Form 10-K, we have taken a number of steps in order to strengthen our accounting function so as to allow us to be able to provide timely and accurate financial reporting. However, we cannot assure you that these steps will be successful. To the extent these steps are not successful, we could be required to incur significant additional time and expense. The expenses we are incurring in this regard, as well as the substantial time devoted by our management towards identifying and addressing the internal control deficiencies, could have a material adverse effect on our business, results of operations and financial condition.

RISKS RELATED TO THE COMPANY’S EFFORTS TO BECOME CURRENT IN ITS PERIODIC REPORTING AND BEING A PUBLIC COMPANY

As a result of the Company’s late periodic filings, the SEC instituted an administrative proceeding pursuant to Section 12(j) of the Exchange Act to determine whether it is appropriate to suspend for up to twelve months or revoke the registration of the Company’s common stock. Although we have filed an answer to the Order, conducted a prehearing conference with the SEC’s staff, and filed an Opposition Brief to the SEC Division of Enforcement’s Motion for Summary Disposition, the ultimate outcome of the administrative proceeding may be adverse to the Company, and may result in the suspension or revocation of the registration of our common stock.

The Company is currently delinquent in its periodic reporting obligations and as a result the SEC instituted administrative proceedings on August 17, 2022 (the “Order”) pursuant to Section 12(j) of the Exchange Act to suspend or revoke the registration of our common stock. On October 3, 2022, we filed an answer to the Order and on October 13, 2022, we conducted a prehearing conference with SEC staff in the Division of Enforcement. On March 1, 2023 the SEC’s Division of Enforcement filed a Motion for Summary Disposition, on March 15, 2023, IEH filed an opposition brief to the SEC Division of Enforcement’s Motion for Summary Disposition, and on March 29, 2023, the SEC’s Division of Enforcement filed a Reply in Support of its Motion for Summary Disposition. The Commission will issue a decision on the basis of the record in the proceeding. The Company cannot at this time predict the timing of a decision by the Commission or the outcome of such decision. Although the Company continues to make progress towards completion of its periodic reports and intends to vigorously defend against the allegations in the Order to avoid possible suspension or revocation of the registration of its common stock, if the SEC issues a final order to suspend or revoke the registration of the Company’s common stock, brokers, dealers and other market participants would be prohibited from buying, selling, making a market in, publishing quotations of, or otherwise effecting transactions with respect to, such common stock until, in the case of suspension, the lifting of such suspension, or, in the case of a revocation, the Company files a new registration statement with the SEC under the Exchange Act and that registration statement is declared effective. As a result, public trading of the Company’s common stock would cease and investors would find it extraordinarily difficult to acquire or dispose of the Company’s common stock or obtain accurate price quotations for the Company’s common stock, which could result in a significant decline in the value of the Company’s stock. In addition, the Company’s business may be adversely impacted, including, without limitation, an adverse impact on the Company’s ability to issue stock to raise equity capital, engage in business combinations or provide employee incentives.

The Company faces challenges in producing accurate financial statements and periodic reports as required on a timely basis.

As discussed in this Annual Report on Form 10-K, we have identified material weaknesses in our accounting systems, processes and procedures in connection with the accounting for inventory and cost of products sold. Ultimately, there have been a number of issues with the SAP System, including system design and implementation issues as well as utilization issues. As a result, the Company has hired a number of third party consultants and additional personnel and enhanced many aspects of its accounting procedures. Although the Company believes it has discovered and made improvements to its critical inventory accounting systems, the Company is still in the process of making further refinements in these complex systems and making system and process changes to improve system utilization. The Company continues to have material weaknesses in internal control over financial reporting and, as a result, cannot assure you that the Company will not experience additional errors or delays with respect to the preparation of its financial statements and its periodic reports in the future.

In addition, as previously noted, the Company has engaged outside consulting firms and other external consultants to assist its finance organization in completing the preparation of its financial statements, and preparing this Annual Report and other periodic reports. The Company relies heavily on these third party consultants who assist in the preparation of financial statements, including extracting financial data from our SAP System, and the timely filing of periodic reports with the SEC. If our third party consultants are unable to provide the Company with the necessary assistance and financial information in a timely manner, the Company will be unable to file its periodic reports when due. In addition, replacing these consultants with new employees may result in the loss of important institutional knowledge or otherwise create transitional issues that could delay the preparation of financial statements and periodic reports. If we are unable to rely on our third party consultants in the future or we do not receive their assistance in a timely manner, we may in the future have delays in reporting which could adversely affect our business.

Potential for future errors in the application of accounting rules and pronouncements.

The completion of the audits of our financial statements involved significant review and analyses, including highly technical analyses of data and business practices and the extraction of data from the SAP System. Given the complexity and scope of this process, and despite the extensive time, effort and expense that went into it, additional accounting errors may in the future come to light in these or other areas that may result in future restatements.

Efforts by the Company to become current in its periodic reporting obligations have required diversion of management’s attention from business operations, led to concerns on the part of investors about the financial condition of the Company and potential loss of business opportunities and resulted in the incurrence of substantial expenses.

Since discovering the issues with the Company’s previously reported financials in connection with the Company’s transition to the SAP System and the Company’s recognition of related material weaknesses in its systems of internal control regarding the accounting for inventory and cost of product sold, the Company’s management, including its finance and accounting personnel, has devoted and continue to devote substantial time, effort and resources to its efforts to become current in its periodic reporting obligations, in addition to performing its day-to-day duties. These efforts and the exigent circumstances have diverted and may continue to divert, management’s attention away from our business. In addition, the delay in the completion of the Company’s periodic reports and the financial condition of the Company have caused concerns on the part of investors and may have resulted in the loss of potential business opportunities or declines in the value of the Company’s common stock.

In addition, to assist their respective finance and accounting teams, the Company engaged outside accounting consulting firms and other external consultants to assist in the preparation of financial statements and periodic reports and has incurred and continues to incur substantial expenses for their services, in addition to incurring substantial expenses for external legal, tax and other professional services.

The staff of the SEC may review the periodic reports of the Company and may request amendments of financial information or other disclosures.

Following its review of periodic reports (including, but not limited to, this Annual Report) filed with the SEC, the staff of the SEC may request that the Company make additional changes to its reporting of financial information contained in such periodic reports, potentially requiring amendments to our financial information or other disclosure.

Any further amendments to the financial information of the Company, among other things:

The requirements of being a public company may strain our resources, divert management’s attention and affect its ability to attract and retain qualified board members.

As a public company listed in the U.S., we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and any rules promulgated thereunder. Our management team may not successfully or efficiently manage being a public company that is subject to significant regulatory oversight and reporting obligations under the reviewfederal securities laws and the continuous scrutiny of securities analysts and investors. Operating a public company requires significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, results of operations and financial condition. For example, the requirements of these rules and regulations increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. In order to maintain and improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight is required and, as a result, management’s attention may be diverted from other business concerns. The costs of compliance with public company reporting requirements and our potential failure to satisfy these requirements could have a material adverse effect on our operations, business, financial condition or results of operations.

In order to satisfy our obligations as a public company, we may need to hire additional qualified accounting policiesand financial personnel with appropriate public company experience.

As a public company, we need to establish and maintain effective disclosure and financial controls and adhere to certain corporate governance practices. We may need to hire additional accounting and financial personnel with appropriate public company experience and technical accounting knowledge, and it may be difficult to recruit and retain such personnel. Even if we are able to hire appropriate personnel, our existing operating expenses and operations will be impacted by the SECdirect costs of their employment and national and international accounting standards bodies, the frequencyindirect consequences related to the diversion of accounting policy changes may accelerate. Possible future changes to accounting standards, could adversely affect our reported results of operations.management resources from other business concerns.

Risks Related to Our Common StockRISKS RELATED TO OUR COMMON STOCK

Our stock price is volatile and could decline; there is currently a limited trading market for our common stock and we cannot predict how liquid the market might become.

There has been a limited trading market for our common stock and we cannot predict how liquid the market for our common stock might become. On September 28, 2021 our stock began trading in accordance with the OTC Pink Sheet No Information tier. Broker dealer firms are not able to provide stock quotes for IEH’s common stock and transactions are limited to the “Expert” market. The quotation of our common stock on the OTC Pink Sheets does not assure that a meaningful, consistent and liquid trading market exists. The market price for our common stock is subject to volatility and holders of our common stock may be unable to resell their shares at or near their original purchase price, or at any price. In the absence of an active trading market, investors may have difficulty buying and selling, or obtaining market quotations for our common stock; market visibility for our common stock may be limited; and a lack of visibility for our common stock may have a very limited trading market.depressive effect on the market for our common stock. While we intend to regain listing on an actively traded platform, there can be no assurance that we will be successful.

The price of our common stock has been, and is likely to continue to be, volatile. For example, our stock price during the fiscal year ended March 29, 201931, 2023 traded as low as $7.30$6.20 and as high as $12.50 per share and during the fiscal year ended March 31, 2022, our stock price traded as low as $11.95 per share and as high as $22.00$18.25 per share. Fluctuations may be exaggerated since the trading volume is and would likely be volatile, limited, and sporadic. These fluctuations may or may not be based upon any business or operating results. We cannot assure you that your investment in our common stock will not decline.

Except for a single dividend declared and paid in 2017, we have not paid dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.

Except for a single dividend declared and paid in 2017, we have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

The Offerman family has substantial influence over our management and policies, and their interests may conflict with ours or yours in the future.

Gail Offerman and Dave Offerman, our Chief Executive Officer, (the “Offerman Investors”) beneficially own approximately 46.7% of our common stock as of October 6, 2023, and will generally vote together as a single class on matters submitted to a vote of our stockholders. As a result, the Offerman Investors may exert substantial influence on other actions requiring a shareholder vote, potentially in a manner that you do not support, including the election and removal of directors and the approval of any merger, consolidation or sale of all or substantially all of our assets. In addition, the ownership of such stockholders could preclude any unsolicited acquisition of us, and consequently, adversely affect the price of our common stock. In addition, the Offerman Investors and their affiliates exercise significant influence over the operations of our Company because the Company has been a business led by the Offerman family for generations. These stockholders may make decisions that are adverse to your interests.

None.

IEH CORPORATION

We have reduced disclosure and governance requirements applicable to smaller reporting companies, which could result in our common stock being less attractive to investors.

We have a public float of less than $250 million and therefore qualify as a smaller reporting company under the rules of the SEC. As a smaller reporting company, we are able to take advantage of reduced disclosure requirements, such as simplified executive compensation disclosures, exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of internal control over financial reporting and reduced financial statement disclosure requirements in our SEC filings. Decreased disclosures in our SEC filings due to our status as a smaller reporting company may make it harder for our investors to analyze our results of operations and financial prospects. We cannot predict if investors will find our common stock less attractive due to our reliance on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be volatile.

There are risks related to the implementation of our perpetual accounting system.

Since 2020, we have been operating on a new perpetual accounting system, SAP’s Business One system along with an add-on inventory and production module, Beas Manufacturing (“New SAP System”) in order to improve our financial reporting. Since implementation, we have been engaged in a multi-year process to refine the functionality of the New SAP System, most significantly around the accounting for inventory and costs of products sold. We have identified the causes of the errors that led to the restatement of previously reported financials and have made enhancements to the New SAP System to remediate those causes. There remains further work to improve and optimize the New SAP System, and that work is ongoing. Any significant deficiency in the design and implementation of the SAP System could negatively impact our financial data and may result in inaccurate financials or delays in our periodic reports with the SEC, which may have a material adverse effect on our business, financial condition or results of operations.

Risks Related to General Economic Conditions and Other Factors:

Changes in general economic conditions, geopolitical conditions, U.S. trade policies and other factors beyond the Company’s control may adversely impact our business and operating results.

PART 1

The Company’s operations and performance depend significantly on global, regional and U.S. economic and geopolitical conditions. The United States has from time to time experienced challenging economic conditions, including in connection with the COVID-19 pandemic, and the global financial markets have recently undergone and may continue to experience significant volatility and disruption. Our business, financial condition and results of operations may be materially adversely affected by changes in consumer confidence, levels of unemployment, inflation, interest rates, tax rates and general uncertainty regarding the overall future economic environment. A recession or slowdown in the economy may cause a decline in demand for our products and have a negative impact on our business.

We are also impacted by changes in trade policy. In recent years, there has been discussion and dialogue regarding potential significant changes to U.S. trade policies, legislation, treaties and tariffs. Changes to current policies by the U.S. or other governments could affect our business, including potentially through increased import tariffs and other influences on U.S. trade relations with other countries. The imposition of additional tariffs or other trade barriers could increase our costs in certain markets, and may cause our customers to find alternative sourcing. In addition, other countries may change their own policies on business and foreign investment in companies in their respective countries. Additionally, it is possible that U.S. policy changes and uncertainty about such changes could increase market volatility and currency exchange rate fluctuations. Market volatility and currency exchange rate fluctuations could have a material adverse effect on our business, financial condition, results of operations or cash flows. As a result of these dynamics, we cannot predict the impact to our business of any future changes to the U.S.’s trading relationships.

A number of other economic and geopolitical factors both in the United States and abroad could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows, such as:

The global nature of our operations exposes us to numerous risks that could materially adversely affect our financial condition and results of operations.

We serve customers in the United States and abroad, with a sales presence in over 40 countries. Sales outside of the United States are subject to various risks that may not be present or as significant for our U.S. operations. Economic uncertainty in some of the geographic regions in which we sell our products could result in the disruption of commerce and negatively impact cash flows from our operations in those areas. Risks inherent in our international operations include, among others:

If we are unable to anticipate and effectively manage these and other risks, it could have a material and adverse effect on our business, our results of operations and financial condition.

We are the primary source for various commercial and aerospace applications in China. There is always a risk of being second sourced by domestic manufacturers, and trade tensions or nationalizing supply chains adversely impacting our business.

Sales to customers located outside the U.S. accounted for approximately 14.8% and 23.8% of our revenue in the fiscal years ended March 31, 2023 and March 31, 2022, respectively. Of these amounts, approximately 39.8% and 68.2% were attributable to sales to customers located in China in the fiscal years ended March 31, 2023 and March 31, 2022, respectively. We expect that revenue from international sales to China will continue to be a significant part of our total revenue. Any weakness in the Chinese economy could result in a decrease in demand for consumer products that contain our products, which could materially and adversely affect our business. In addition, there is a risk that manufacturers in China may compete with us and replace us. The imposition by the U.S. of tariffs on goods imported from China, countermeasures imposed by China in response, U.S. export restrictions on sales of products to China and other government actions that restrict or otherwise adversely affect our ability to sell our products to Chinese customers may have a material impact on our business. In addition, we may be subject to rules and regulations of the PRC or the jurisdiction of other governmental agencies in the PRC that may adversely affect our rights and obligations. In the event of a dispute, we will likely be subject to the exclusive jurisdiction of foreign courts.

Fluctuations in exchange rates could adversely affect our business and the value of our securities.

The value of our securities will be indirectly affected by the foreign exchange rate between the U.S. dollar and RMB and between those currencies and other currencies in which our sales may be denominated. Appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations.

To date, we have not entered into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

If relations between the U.S. and China worsen, our business could be adversely affected by the trade war and investors may be unwilling to hold or buy our stock and our stock price may decrease.

At various times during recent years, the U.S. and China have had significant disagreements over political and economic issues. Controversies may arise in the future between these two countries. Any political or trade controversies between the U.S. and China, whether or not directly related to our business, could reduce the price of our common stock. These controversies also could make it more difficult for us to sell our products to our customers in China. The international trade policies of China and the U.S. could adversely affect our business, and the imposition of trade sanctions relating to import and export of goods, taxes, tariffs and duties and other charges on imports from China or exports to China. Due to an increase in tariffs imposed by China on products from the U.S., some of our customers might seek alternatives, which could have a negative impact on our sales as we mainly sell our own products to customers in China. In order to avoid these tariffs, the market has shifted towards an uncertain era including sourcing from other countries. Our sales during this stage may also be negatively impacted by this shift in behavior.

Changes in defense expenditures may reduce the Company’s sales.

Approximately 56.3% and 59.1% of the Company’s net revenues for the fiscal years ended March 31, 2023 and March 31, 2022, respectively, came from sales to the defense market. The Company participates in a broad spectrum of defense programs. Accordingly, the Company’s sales are affected by changes in the defense budgets and policies of the U.S. government. A significant decline in U.S. government defense expenditures for programs in which we participate could have an adverse effect on the Company’s business, financial condition and results of operations. U.S. government expenditures are also subject to political and budgetary fluctuations and constraints, which may result in significant unexpected changes in levels of demand for our products.

We may be adversely affected by natural disasters, pandemics and other catastrophic events and by man-made problems such as terrorism that could disrupt our business operations, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Our business operations are located in Brooklyn, New York and Allentown, PA. If a disaster, power outage, computer hacking, or other event occurred that prevented us from using all or a significant portion of our facilities, that damaged critical infrastructure, such as enterprise financial systems, IT systems, manufacturing resource planning or enterprise quality systems, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. As an example, the New York City area was significantly impacted by the COVID-19 pandemic and, due to safety considerations for our employees and government restrictions, including stay-at-home orders, certain of our employees worked from home for an extended period of time. In addition, our suppliers’ facilities are located in locations susceptible to natural disasters or similar events, such as tornadoes, fires, explosions or large-scale accidents or power outages, or IT threats, pandemics, acts of terrorism and other geo-political unrest, which could severely disrupt our operations and have a material adverse effect on our business, financial condition, operating results and prospects. All of the aforementioned risks may be further increased if we do not implement a disaster recovery plan or our partners’ or manufacturers’ disaster recovery plans prove to be inadequate. To the extent that any of the above should result in delays in the manufacture or distribution of our products, our business, financial condition, operating results and prospects would suffer.

Our business and operations would suffer in the event of system failures, cyber-attacks or a deficiency in our cyber-security.

Despite the implementation of security measures, our internal computer systems and those of our contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war, artificial intelligence related cyber-attacks, and telecommunication and electrical failures. The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber-terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations.

None.

The Company renewed its lease term for its manufacturing facility located at 140 58^th Street, Suite 8E, Brooklyn, New York runs fromon December 1, 20102020, and entered into a 120 month lease agreement extension, running through November 30, 2020.2030. The basic minimum annual rentals remaining are as follows:

The Company leaseslease is approximately 20,400 square feet of space, of which it estimatesis estimated that 6,000 square feet are used as executive, sales and administrative offices and 14,400 square feet are used for its manufacturing, testing and plating operations.

The basic minimum annual rental expensepayments remaining on this lease is $2,325,237 as of March 31, 2023.

The Company entered into a lease on January 29, 2021 for a building at 200 Cascade Drive, Bldg. 2, Suite H, Allentown, PA 18109 running through March 30, 2028. The lease is approximately 28,800 square feet of space, of which it is estimated that 4,800 square feet are used as executive and administrative offices and 24,000 square feet are used for its manufacturing and testing operations. The basic minimum annual rental payments remaining on this lease is $1,256,346 as of March 31, 2023.

There are no legal proceedings that have occurred within the past year concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.

On August 17, 2022, the SEC issued an Order Instituting Administrative Proceedings and Notice of Hearing pursuant to Section 12(j) of the Exchange Act. The stated purpose of the administrative proceeding is for the years endedCommission to determine whether it is necessary and appropriate for the protection of investors to suspend for a period not exceeding twelve months, or revoke the registration of each class of securities registered pursuant to Section 12 of the Exchange Act of the Company. The Company filed an Answer in the proceeding on October 3, 2022 and on October 13, 2022 we conducted a prehearing conference with SEC staff in the Division of Enforcement. On March 1, 2023 the SEC’s Division of Enforcement filed a Motion for Summary Disposition, on March 15, 2023, IEH filed an opposition brief to the SEC Division of Enforcement’s Motion for Summary Disposition, and on March 29, 2019 and March 30, 2018 and was $183,720 and $178,360, respectively. In addition to2023, the base rent,SEC’s Division of Enforcement filed a Reply in Support of its Motion for Summary Disposition. The Commission will issue a decision on the Company pays insurance premiums and utility charges relating to the usebasis of the premises. The Company considers its present facilities to be adequate for its present and anticipated future needs.

The Company is not a party to or aware of any pending or threatened legal proceedings which,record in the opinion of the Company’s management, would result in any material adverse effect on its results of operations or its financial condition.proceeding.

Not applicable.

Not applicable

IEH CORPORATION

PART II

Principal MarketMarket:

OnBeginning on September 28, 2021, as a result of the SEC’s amendments to Exchange Act Rule 15c2-11 which requires listed companies to be current in their SEC periodic reports or provide alternative information, trading in the Company’s shares of common stock is in accordance with the OTC Pink Sheet No Information tier and transactions are limited to the “Expert” market. As a result, broker dealer firms are not able to provide stock quotes for the Company’s common stock. Persons who hold our common stock or wish to purchase our common stock will have to contact their brokers directly in order to buy or sell shares. Prior to September 28, 2021, on March 22, 2019, the Company’s shares of common stock (the “common stock”) commenced trading exclusively on the OTCQX Marketplace. Prior to March 22, 2019, the common stock was traded exclusively on the OTCQB Marketplace commencing on March 17, 2017. On March 17, 2017, the Company’s shares of common stock (the “common stock”) commenced trading exclusively on the OTCQB Marketplace. The shares are quoted on the National Association of Securities Dealers Automated Quotation (“NASDAQ”) System under the ticker symbol “IEHC”. Investors are able to view real-time quotes at http://www.otcmarkets.com.

Prior to March 17, 2017, Because we are quoted on the OTC Pink Sheet, our common stock of the Company was traded in the Over-The-Counter may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if it were listed on a national securities exchange.

Market Electronic Bulletin Board (OTCBB).Information:

Market Information

The range of high and low bid prices for the Company’s common stock, for the periods indicated, asare set forth below as quoted (i) overreported by the OTCBB prior to March 17, 2017, (ii) commencing on March 17, 2017 quoted on the OTCQB, and (iii) commencing on March 22, 2019, quoted on the OTCQX. Set forthOTC Markets. The table below is a table indicatingprovides the high and low bid prices of the common stock during the periods indicated. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions.

IEH CORPORATION

PART IIHolders:

On July 11, 2018 (the last day prior to the filing of this report on which trading in the common stock occurred), the high bid for the common stock was $19.50and the low bid was $18.00.

Dividends

On May 17, 2017, the Board of Directors of the Company authorized a $0.25 one-time special cash dividend payable on June 19, 2017 to shareholders of record on the close of business of June 6, 2017. This dividend was the first dividend ever paid by the Company since it became an SEC reporting company.

Approximate Number of Equity Security Holders

The number of record holders of the Company’s common stock as of July 12, 2019September 29, 2023 was approximately 279.187. Such number of record owners was determined from the Company’s shareholder records, and does not include the beneficial owners of the Company’s common stock whose shares are held in the names of various security holders, dealers and clearing agencies.

Dividends:

Except for a single cash dividend declared and paid in 2017, we have never declared or paid a regular, quarterly cash dividend on our Common Stock, and we do not expect to pay any regular, quarterly cash dividend on our Common Stock in the foreseeable future. Payment of future dividends, if any, on our Common Stock will be at the discretion of our Board of Directors after taking into account various factors, including our financial condition, operating results, anticipated cash needs, and plans for expansion.

Recent Sales of Unregistered Securities:

None.

Transfer Agent

The transfer agent for our common stock is Computershare located in Canton, Massachusetts.

We are a “smaller reporting company” as defined by Regulation S-K and as such, are not required to provide the information contained in this item pursuant to Regulation S-K.Not Applicable.

Statements contained in this report, which are not historical facts, may be considered forward-looking information with respect to plans, projections, or future performance of the Company as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, which could cause actual

IEH CORPORATION

PART II

results to differ materially from those projected. The words “anticipate,” “believe”, “estimate”, “expect,” “objective,” and “think”think” or similar expressions used herein are intended to identify forward-looking statements. The forward-looking

statements are based on the Company’s current views and assumptions and involve risks and uncertainties that include, among other things, the effectsperformance of the Company’s business, actions of competitors, changes in laws and regulations, including accounting standards, employee relations, customer demand, prices of purchased raw materialmaterials and parts, domestic economic conditions, including housing starts and changes in consumer disposable income, and foreign economic conditions, including currency rate fluctuations. Some or all of the facts are beyond the Company’s control.

The following discussion and analysis should be read in conjunction with our audited financial statements and related footnotes included elsewhere in this report, which provide additional information concerning the Company’s financial activities and condition.

Overview of Business:

The Company designs, develops and manufactures printed circuit board connectors and custom interconnects for high performance applications.

Overview of Business

All of our connectors utilize the HYPERBOLOID contact design, a rugged, high-reliability contact system ideally suited for high-stress environments. We believe we are the only independent producer of HYPERBOLOID printed circuit board connectors in the United States.

Our customers consist of OEMs (Original Equipment Manufacturers) and distributors who resell our products to OEMs. We sell our products directly and through 2522 independent sales representatives and distributors located in all regionregions of the United States, Canada, the European Union, Southeast Asia, Central Asia and the Middle East.

The customers we service are in the Military,Defense, Aerospace, Space, Medical, Oil and Gas, Industrial, Test Equipment and Commercial Electronics markets. We appear on the Military Qualified Product Listing “QPL” to(“QPL”) MIL-DTL-55302 and supply customer requested modifications to this specification. Sales to the commercial electronics (inclusive of commercial aerospace, space, oil & gas, medical and miscellaneous markets) and military markets were 49.9% and 50.1%, respectively, of the Company’s net sales for the year ended March 29, 2019. Our offering of “QPL” items has recently been expanded to include additional products.

The customers we service by industry as a percentage of total revenue is provided below:

We are exposed to and impacted by macroeconomic factors and U.S., state and local government policies. Current general economic conditions, including the current levels of inflation, have created uncertainties, resulting in market volatility. We have adopted particular measures to protect our employees at our manufacturing operations in Brooklyn, New York, and Allentown, PA, and we expect to execute on our contracts through carefully designed arrangements.

Worldwide Supply Chain Disruptions

Worldwide supply chain disruptions, which were initially brought about by the impact of the COVID-19 pandemic, have persisted despite the recovery in the global economy and financial markets. The Company has experienced longer lead times for raw materials and has experienced raw material cost increases compared to prior fiscal years. These and other issues resulting from worldwide supply chain disruptions, including the conflict between Russia and Ukraine, have stabilized but are expected to continue to some degree into fiscal 2024 and could continue to have a material adverse effect on the Company’s business, operating results and financial condition. The precise financial impact and duration, however, cannot be reasonably estimated at this time.

Critical Accounting Policies and Estimates:

The preparation of financial statements have been prepared in accordanceconformity with accounting principles generally accepted in the United States of America which require the Company(US GAAP) requires management to make estimates and assumptions about future events that affect the amounts reported amounts of assets and liabilities at the date ofin the financial statements and revenuesaccompanying notes. Future events and expenses duringtheir effects cannot be determined with absolute certainty. Therefore, the periods reported.determination of estimates requires the exercise of judgment. Actual results couldinevitably will differ from those estimates.estimates, and such differences may be material to the financial statements. The Company believesmost significant accounting estimates inherent in the followingpreparation of our financial statements include estimates associated with revenue recognition, valuation of inventories, accounting for income taxes and stock-based compensation expense.

Our financial position, results of operations and cash flows are impacted by the accounting policies we have adopted. In order to get a full understanding of our financial statements, one must have a clear understanding of the accounting policies employed. A summary of our critical accounting policies which could haveis presented within the most significant effect onfootnotes in the financial statements presented within this Annual Report.

Revenue Recognition

Pursuant to ASC 606, Revenue from Contracts with Customers, revenue represents the amount received or receivable for goods and services supplied by the Company to its customers. The Company recognizes revenue and the related cost of products sold when the performance obligations are satisfied. The performance obligations are typically satisfied upon shipment of physical goods. In addition to the satisfaction of the performance obligations, the following conditions are required for revenue recognition: an arrangement exists, there is a fixed price, and collectability is reasonably assured.

The Company does not offer any discounts, credits or other sales incentives. Historically, the Company believes that it has no collection issues with its customer base. The Company’s policy with respect to customer returns and allowances as well as product warranty is as follows:

The Company may accept a return of defective product within one year from shipment for repair or replacement at the Company’s reported resultsoption. If the product is repairable, the Company at its own cost, will repair and requirereturn it to the most difficult, subjective or complex judgmentscustomer. If unrepairable, the Company will replace the defective product with a new item. The cost of defective products is immaterial at this time. Billing terms vary by management.customer and product but generally do not exceed 30 days.

The Company reviews its long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sumprovides engineering services as part of the expected cash flows, undiscounted and without interest, is less thanrelationship with its customers in developing the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value.custom product. The Company makes estimatesis not obligated to provide such engineering service to its customers. The Company does not invoice its customers separately for these services.

The Company records a liability when receiving cash in advance of its future cash flows relateddelivering goods or services to assets subject to impairment review.the customer. This liability is offset against the receivable recognized when those goods or services are delivered. Deposits from customers were $20,639 and $97,885, as of March 31, 2023 and 2022, respectively.

IEH CORPORATION

Valuation of Inventories

PART II

Critical Accounting Policies(continued)

Raw materials and supplies are stated at the average cost on a first-in first-out basis which does not exceed net realizable value. Finished goods and work in process are valued at the lower of actual cost, determined on a specific identification basis, or the net realizable value of each Product.product. The Company estimates which materials may be obsolete and which products in work in process or finished goods may be sold at less than cost, and adjusts their inventory value accordingly. Future periods could include either

Accounting for Income Taxes

The Company’s current provision for income or expensetaxes is based upon its estimated taxable income in each of the jurisdictions in which it operates, after considering the impact on taxable income of temporary and permanent differences resulting from different treatment of items if estimates changefor tax and financial reporting purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the estimatedfinancial statement carrying amounts of existing assets and actual amount realized fromliabilities and their respective tax bases and any operating loss or tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the saleyear in which those temporary differences are expected to be recovered or settled. The ultimate realization of inventory.

The Company records a liability for potentialdeferred tax assessments based on its estimateassets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible. Should management determine that it is more likely than not that some portion of the potential exposure. Due to the subjectivity and complex nature of the underlying issues, actual payments or assessments may differ from estimates. Incomedeferred tax expense in future periods couldassets will not be adjusted for the difference between actual payments and the Company’s recorded liability based on its assessments and estimates.

In May 2014, the Financial Accounting Standards Board issued ASC 606 “Revenue from Contracts with Customers” that, as amended on August 12, 2015, became effective to annual report periods beginning after December 15, 2017.

The core principle underlying ASC 606, is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” ASC 606-10-05-4 sets out the following steps for an entity to follow when applying the core principle to its revenue -generating transactions:

The Company has adopted the provisions of ASC 606 as of June 29, 2018. However, such adoption did not have any effect on the way in which the Company recognizes, records and reports revenues.

The Company does not offer any discounts, credits or other sales incentives. Historically, the Company believes that it has no collection issues with its customer base.

The Company’s policy with respect to customer returns and allowances as well as product warranty is as follows:

The Company will acceptrealized, a return of defective product within one year from shipment for repair or replacement at the Company’s option. If the product is repairable, the Company at its own cost, will repair and return it to the customer. If unrepairable, the Company will either offer anvaluation allowance against payment or will reimburse the customer fordeferred tax assets would be established in the total cost of product. The cost of defective products is immaterial at this time.

The Company provides engineering services as part of the relationship with its customers in developing the custom product. The Company is not obligated to provideperiod such engineering service to its customers. The Company does not invoice its customers separately for these services.determination was made.

IEH CORPORATION

Stock-Based Compensation Expense

PART II

Critical Accounting Policies(continued)

Stock-based compensation expense recognized in the statement of operations is based on options ultimately expected to vest. We chose the straight-line method of allocating compensation cost over the requisite service period of the related award in accordance with the authoritative guidance. The Company did not expend any fundsexpected term of options granted to employees is calculated using the simplified method, which represents the average of the contractual term of the option and the weighted-average vesting period of the option, which, for options granted in fiscal 2023 and 2022, resulted in an expected term of approximately five years. We used our historical volatility to estimate expected volatility in fiscal 2023 and 2022. The risk-free interest rate is based on nor receiving any revenues related to, customer sponsored research and development activities, relatingthe U.S. Treasury yields in effect at the time of grant for periods corresponding to the developmentexpected life of new designs, techniquesthe options. The dividend yield is 0% based on the fact that we have no present intention to pay dividends. Determining some of these assumptions requires significant judgment and changes to these assumptions could result in a significant change to the improvementcalculation of existing designs,stock-based compensation in future periods.

Results of Operations:

Annual Results of Operations

Comparison of the Years Ended March 31, 2023 and March 31, 2022:

The following table summarizes our results of operations for the fiscal years ended March 29, 201931, 2023 and March 30, 2018, respectively, relating to the development of new designs, techniques and the improvement of existing designs.31, 2022:

Results of Operations

Stock-Based Compensation Plan:

Compensation expense for stock options granted to directors, officers and key employees is based on the fair value of the award on the measurement date, which is the date of the grant. The expense is recognized ratably over the service period of the award. The fair value of stock options is estimated using a Black-Scholes valuation model. The fair value of any other non-vested stock awards is generally the market price of the Company’s common stock on the date of the grant.

Year End Results: March 29, 2019 vs. March 30, 2018

The following table sets forth for the periods indicated, percentages for certain items reflected in the financial data as such items bear to the revenues of the Company:

Relationship to Total Revenues

IEH CORPORATION

PART IIRevenue for the fiscal year ended March 31, 2023 was $19,136,890, reflecting a decrease of $5,128,699, or 21.1%, as compared to $24,265,589 for the fiscal year ended March 31, 2022. The decrease in revenues for fiscal year 2023 compared to fiscal year 2022 was primarily due to a softness in orders from our defense and space customers. Our revenues continue to be negatively impacted by reduced government spending in these sectors for programs in which we participate. The decline in defense and space customer revenue was offset somewhat by increases in commercial aerospace revenues. We are seeing increases in commercial aerospace, generally, as consumer aviation traffic has been returning to pre COVID-19 levels, and from the Boeing 737-Max program, in particular, as Boeing has resumed its production after having earlier grounded the production of this aerospace program.

Cost of products sold for the fiscal year ended March 31, 2023 was $18,395,865 reflecting a decrease of $932,384, or 4.8%, as compared to $19,328,249 for the fiscal year ended March 31, 2022. The decrease was principally attributable to the 21.1% decrease in revenue, offset by the increase in our cost of products sold, especially in light of declining revenues, which reflects the additional costs we have incurred in staffing the Pennsylvania location, the costs of maintaining our highly trained labor force through periods of reduced production and the impacts of inflation.

Selling, general and administrative expenses for the fiscal year ended March 31, 2023 was $5,519,278, reflecting an increase of $480,206, or 9.5%, as compared to $5,039,072 for the fiscal year ended March 31, 2022. The increase was primarily attributable to an increase in legal and accounting fees of $701,917 partially offset by a decrease in stock-based compensation expense of $383,083.

Depreciation and amortization for the fiscal year ended March 31, 2023 was $1,034,559, reflecting an increase of $197,358, or 23.6%, as compared to $837,201 for the fiscal year ended March 31, 2022. The increase was principally attributable to an increase in capitalized leasehold improvements related to our new Pennsylvania facility, as well as increases in capitalized molds and dies for new products.

Total other income (expense) for the fiscal year ended March 31, 2023 was income of $116,268, reflecting a decrease of $2,098,153, as compared to income of $2,214,421 for the fiscal year ended March 31, 2022. The decrease was primarily attributable to the debt forgiveness income recognized from the forgiveness of the PPP loan of $2,103,885 in the fiscal year ended March 31, 2022.

(Provision for) benefit from income taxes for the fiscal year ended March 31, 2023 was a provision of $806,380, as compared to a benefit of $162,646 for the fiscal year ended March 31, 2022. The change was primarily attributable to fully impairing the deferred income tax assets, net. During the three months ended June 30, 2022, we determined to record a full valuation allowance on our deferred income tax assets, net. As such, during the three months ended June 30, 2022, we recorded a full valuation allowance for the opening period deferred income tax asset, net and then beginning on June 30, 2022, recorded an adjustment to fully impair any increase in the deferred income tax asset, net. As such, for the fiscal year ended March 31, 2023, the effect of recording a full valuation allowance resulted in an income tax provision of $806,380.

Results of Operations(continued)Liquidity and Capital Resources:

Year End Results: March 29, 2019 vs. March 30, 2018(continued)

Net salesOur primary requirements for liquidity and capital are working capital, inventory, capital expenditures, public company costs and general corporate needs. We expect these needs to continue as we further develop and grow our business. For the year ended March 29, 2019 amounted31, 2023, our primary sources of liquidity came from existing cash. Based on our current plans and business conditions, we believe that existing cash, together with cash generated from operations will be sufficient to $28,406,666 reflectingsatisfy our anticipated cash requirements, and we are not aware of any trends or demands, commitments, events or uncertainties that are reasonably likely to result in a $4,933,972 increase versusdecrease in liquidity of our assets. We may require additional capital to respond to technological advancements, competitive dynamics or technologies, business opportunities, challenges, acquisitions or unforeseen circumstances and in either the short-term or long-term may determine to engage in equity or debt financings or enter into credit facilities for other reasons. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. In particular, inflationary pressures and interest rates, the 2023 banking crisis and the conflict between Russia and Ukraine have resulted in, and may continue to result in, significant disruption and volatility in the global financial markets, reducing our ability to access capital. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.

As of March 31, 2023, our cash balance was $8,344,706. For the fiscal year ended March 30, 2018 which amounted31, 2023, we recorded a net loss of $6,502,924. As of March 31, 2023, we had working capital of $20,303,090.

Our principal source of liquidity is cash flows generated by operating activities and cash reserves.

Cash Flow Activities for the Years Ended March 31, 2023 Compared to $23,472,694. the Year Ended March 31, 2022

The increase in net sales is a direct result of the Company’s efforts in increasing sales in both the military and commercial aerospace sectors.

The Company is primarily a manufacturer and its products are essentially basic components of larger assemblies of finished goods. Approximately 90% of the Company’s net salesfollowing table summarizes our cash flow activities for the fiscal years ended March 29, 201931, 2023 and

March 30, 2018, respectively, were made directly to manufacturers of finished products with the balance of the Company’s products sold to distributors.31, 2022:

Distributors often purchase connectors for customers who do not require large quantities of connectors over a short period of time but rather require small allotments of connectors over an extended period of time.

During the fiscal year ended March 29, 2019, two customers accounted for $7,451,032 constituting 26.2% of the Company’s net sales. One of those customers accounted for 13.7% of the Company’s net sales while the second customer accounted for 12.5% of the Company’s net sales.

During the fiscal year ended March 30, 2018, one customer accounted for $2,685,250 constituting 11.4% of the Company’s net sales.

The Company currently employs 25 independent sales representatives to market its products in all regions in the United States as well as in Canada, the European Union (EU), Southeast Asia, Central Asia and the Middle East. These sales representatives accounted for approximately 95% of the Company’s net sales for the year ended March 29, 2019, with the balance of net sales being generatedNet cash (used in) provided by direct customer contact.

For the fiscal year ended March 29, 2019, the Company’s principal customers included manufacturers of commercial electronic products, military defense contractors and distributors who service these markets. Sales to the commercial electronic products (inclusive of aerospace, space, oil & gas, medical & miscellaneous) were 49.9% and government markets comprised 50.1% of the Company’s net sales for the year ended March 29, 2019 and 35% and 45% of the Company’s net sales for the year ended March 30, 2018, respectively. Approximately 18% of net sales were made to international customers for the year ended March 29, 2019 and 20% for the year ended March 30, 2018, respectively.

Cost of products sold amounted to $16,377,063operating activities was ($3,785,051) for the fiscal year ended March 29, 2019, or 57.7%31, 2023, a decrease of operating revenues. This reflected a $1,642,502 or 11.2% increase in the cost of products sold of $14,734,561 or 62.8% of operating revenues$5,199,544, as compared to $1,414,493 for the fiscal year ended March 30, 2018. This increase31, 2022. The period over period decrease in costcash from operating activities of products sold is$5,199,544 was primarily due primarily to the increased costdecrease in net (loss) income of production associated with and necessary to support the increase in sales.

Selling, general and administrative expenses were $4,007,145 and $4,006,950 or 14.1% and 17.1% of net sales for the fiscal years ended March 29, 2019 and March 30, 2018, respectively. This category of expenses increased by $195 or 0% from the prior year.

For the fiscal year ended March 29, 2019, interest expense was $63,271 or .2% of net sales. For the fiscal year ended March 30, 2018, interest expense was $48,178 or .2% of net sales. The increase of $15,093 or 31.3% reflects the additional borrowings from the Financing Company$7,941,058 (as defined below) during the year.

Depreciation and amortization of $345,840 or 1.2% of net sales was reportedadjusted for the fiscal year ended March 29, 201931, 2022 non-cash gain of $2,103,885 on forgiveness of debt, a decrease in net income (loss) of $5,837,173), offset principally by the non-cash charge to fully impair the deferred income tax asset, net.

Net cash used in investing activities was $545,514 for the fiscal year ended March 31, 2023, a decrease of $2,101,250, as compared to $330,037 or 1.4%a use of net sales$2,646,764 for the prior period.fiscal year ended March 31, 2022. The increasedecrease in cash used in investing activities during the fiscal year ended March 31, 2023 was due to a reduction in purchases of leasehold improvement related to our new Pennsylvania facility.

There were no financing activities during either fiscal year ended March 31, 2023 or 2022.

PPP Loan and Note

On April 13, 2020, the Company entered into an unsecured note (the “PPP Note”) evidencing an unsecured loan (“PPP Loan”) in the principal amount of $2,103,885 pursuant to the Payment Protection Program (“PPP”) under the Coronavirus Aid Relief and Economic Security Act (“CARES Act”).

On April 21, 2021, the Company received notice that the PPP Loan was forgiven. The Company recorded the forgiveness of the principal balance of $2,103,885 as debt forgiveness income in the quarter ended June 30, 2021.

Backlog of Orders

Our customers typically enter into supply arrangements for the purchase of machineryour products which we will produce and equipment.

IEH CORPORATION

PART II

Resultsdeliver over time. On an as-needed basis, our customers place specific production orders, and these orders are generally filled and shipped within twelve weeks. Our backlog consists of Operations(continued)

Year End Results:supply arrangements where the anticipated unfulfilled shipping dates are within approximately twelve months. Because of the possibility of customer changes in delivery schedules or the cancellation of orders, our backlog as of any particular date may not be indicative of revenue in any future period. The backlog amounted to approximately $13,724,000 at March 29, 2019 vs March 30, 2018(continued)

The Company reported net income of $5,160,766 for the year ended March 29, 2019 representing basic earnings of $2.23 per share31, 2023 as compared to net income of $2,565,559 or $1.11 per share for the year ended$7,909,000 at March 30, 2018.31, 2022. The increase in net income for the current year can be attributed primarily to the reported increase in production and sales. 

Liquidity and Capital Resources

The Company reported working capital of $19,653,160total backlog as of March 29, 201931, 2023 compared with the previous years is primarily due to working capitalincreases in aerospace and defense customer demand, driven in large part by the recovery of $14,951,572 as of March 30, 2018. The increase in working capital of $4,701,588 was attributable tocommercial aviation after the following items:

As a resultearlier grounding of the above, the current ratio (current assets to current liabilities) was 6.15 to 1 at March 29, 2019 as compared to 7.56 to 1 at March 30, 2018. Current liabilities at March 29, 2019 were $3,816,396 as compared to $2,280,760 at

March 30, 2018.

The Company reported $840,292 in capital expenditures for the year ended March 29, 2019 and recorded depreciation expense of $345,840 for the year ended March 29, 2019.

Total stockholders’ equity increased by $5,196,040 which represented the reported net income for the year ended

March 29, 2019 of $5,160,776Boeing 737 Max jet and the increaseimpact of CapitalCOVID-19, as well as increases in excessorders from our defense customers.

A portion of par value for the additional stock option compensation expense of $35,264. Accordingly, the Company reported a total stockholders’ equity as of March 29, 2019 of $22,268,256 as compared to total stockholders’ equity of $17,072,216 as of March 30, 2018.

The Company has an accounts receivable financing agreement with a non-bank lending institution (“Financing Company”) whereby it can borrow up to 80 percent of its eligible receivables (as defined in such financing agreement) at an interest rate of 2 ½% above JP Morgan Chase’s publicly announced rate with a minimum interest rate of 6% per annum.

The financing agreement has an initial term of one year and will automatically renew for successive one-year terms, unless terminated by the Company or its lender upon receiving 60 days’ prior notice. Funds advanced by the Financing Companythese backlog orders are secured by the Company’s accounts receivable and inventories. As of March 29, 2019, the Company had reported a liability to the Financing Company of $334,306 as compared to March 30, 2018 when the Company had reported excess payments to the Factor of $154,960. These excess payments are reported in the accompanying financial statements as “Excess payments to accounts receivable financing company.”

In the past two fiscal years, management has been reviewing its collection practices and policies for outstanding receivables and has revised its collection procedures to a more aggressive collection policy. As a consequence of this new policy the Company’s experience is that its customers have been remitting payments on a more consistent and timely basis. The Company reviews the collectability of all accounts receivable on a monthly basis.

The Company has the Multi-Employer Plan with the Union. Contributions are made in accordance with a negotiated labor contract and are based on the number of covered employees employed per month.

IEH CORPORATION 

PART II

Results of Operations(continued)

Year End Results: March 29, 2019 vs. March 30, 2018(continued)

Liquidity and Capital Resources(continued)

With the passage of the 1990 Act the Company may become subject to liabilities in excesscancellation or postponement of contributions made under the collective bargaining agreement. The Company has the Multi-Employer Plan with the Union. Contributions are made by the Company in accordance with a negotiated labor contractdelivery dates and, are based on the number of covered employees employed per month. Generally,therefore, no assurance can be given that actual sales will result from these liabilities are contingent upon the termination, withdrawal, or partial withdrawal from the Multi-Employer Plan. The Company has not taken any action to terminate, withdraw or partially withdraw from the Multi-Employer Plan nor does it intend to do so in the future. Under the 1990 Act, liabilities would be based upon the Company’s proportional share of such Plan’s unfunded vested benefits.

Based upon such Plan’s information and data as of December 31, 2018 furnished to the Company (including, without limitation, unfunded vested benefits, accumulated benefits and net assets), such Plan is fully funded. Based thereupon, the Company’s proportional share of the liability through December 31, 2018 is fully funded. The total contributions charged to operations under the provisions of the Multi-Employer Plan were $65,075 and $151,314 for the fiscal years ended March 29, 2019 and March 30, 2018, respectively.

Stock Option Plan

On August 31, 2011, the Company’s shareholders approved the adoption of the Company’s 2011 Equity Incentive Plan (“2011 Plan”) to provide for the grant of stock options and restricted stock awards to purchase up to 750,000 shares of the Company’s common stock to all employees, consultants and other eligible participants including senior management and members of the Board of Directors of the Company.

Options granted to employees under the 2011 Plan may be designated as options which qualify for incentive stock option treatment under Section 422A of the Internal Revenue Code, or options which do not qualify (non-qualified stock options).

Under the 2011 Plan, the exercise price of an option designated as an incentive stock option shall not be less than the fair market value of the Company’s common stock on the day the option is granted. In the event an option designated as an incentive stock option is granted to a ten percent (10%) or greater shareholder, such exercise price shall be at least 110 percent (110%) of the fair market value of the Company’s common stock and the option must not be exercisable after the expiration of ten years from the day of the grant. The 2011 Plan also provides that holders of options that wish to pay for the exercise price of their options with shares of the Company’s common stock must have beneficially owned such stock for at least six months prior to the exercise date.

Exercise prices of non-incentive stock options may be less than the fair market value of the Company’s common stock. The aggregate fair market value of shares subject to options granted to a participant(s), which are designated as incentive stock options, and which become exercisable in any calendar year, shall not exceed $100,000.

IEH CORPORATION

PART II

Results of Operations(continued)

Year End Results: March 29, 2019 vs. March 30, 2018(continued)

Liquidity and Capital Resources(continued)

Stock Option Plan(continued)

Effective August 15, 2016, the Board of Directors also approved the granting of stock options to purchase shares of the Company’s common stock under the 2011 Plan to each of Dr. Marciano and Mr. Hugel as follows: Each of the new non-management directors received a grant of options totaling 5,000 shares each subject to the following vesting schedule: (i) 1,000 shares vested immediately (August 15, 2016); (ii) 2,000 shares vested on August 15, 2017; and (iii) 2,000 shares vested on August 15, 2018. The stock options (i) have a ten-year term; and (ii) have an exercise price equal to the fair market value of the Company’s common stock as determined under the 2011 Plan, as reported in the OTCBB, on the date of grant ($5.30). In the event of the termination of each recipient’s association with the Company, the options will remain exercisable in accordance with the terms of the 2011 Plan.

On September 7, 2018, the Board of Directors elected Michael E. Rosenfeld to the Board of Directors to fill the vacancy of a Class I Director of the Company created by the death of the Company’s then President and Chief Executive Officer, Michael Offerman. Such appointment became effective on October 26, 2018.

At the same time, the Board of Directors also approved the granting of stock options to purchase shares of the Company’s common stock under the 2011 Plan to Mr. Rosenfeld as follows: He received a grant of options totalling 5,000 shares each subject to the following vesting schedule: (i) 1,000 shares vested on October 26, 2018; (ii) 2,000 shares will vest on October 26, 2019; and (iii) 2,000 shares will vest on October 26, 2020. The stock options: (i) have a ten-year term; and (ii) have an exercise price equal to the value of the Company’s common stock on the date of grant. In the event of the termination of each recipient’s association with the Company, the options will remain exercisable in accordance with the terms of the 2011 Plan. 

The table below summarizes the option awards for the named executive officers and non-management directors:

¹Options to purchase 1,000 shares of common stock were vested on October 26, 2018 and options to purchase 4,000 shares of common stock have not yet vested. Options for 2,000 shares shall vest on October 26, 2019 and options for 2,000 shares shall vest on October 26, 2020.

IEH CORPORATION

 PART II

Results of Operations(continued)

Year End Results: March 29, 2019 vs. March 30, 2018(continued)

Liquidity and Capital Resources (continued)

Stock Option Plan(continued)

The following table shows the option activity for the fiscal years ended March 29, 2019 and March 30, 2018.

Stock-based compensation expense

Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations: 

Unrecognized stock-based compensation expense

Note: Stock option grants to IEH officers, directors and key employees in the fiscal years ended March 29, 2019 and March 30, 2018 were valued using a Black-Scholes model, under the following criteria:

IEH CORPORATION

PART II

Results of Operations(continued)

Year End Results: March 29, 2019 vs. March 30, 2018(continued)

Liquidity and Capital Resources (continued)

Stock Option Plan(continued)

The following table shows the activity for the fiscal years ended March 29, 2019 and March 30, 2018.

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in-the-money options on those dates. This amount will change based on the fair market value of the Company’s common stock.

IEH CORPORATION

PART II

Results of Operations(continued)

Year End Results: March 29, 2019 vs. March 30, 2018(continued)

Liquidity and Capital Resources (continued)

Cash Bonus Plan

In 1987, the Company adopted the Cash Bonus Plan for non-union, management and administration staff. Contributions to the Cash Bonus Plan are made by the Company only when the company is profitable for the fiscal year. Accordingly, the Company has accrued a contribution provision of $324,000 for the years ended March 29, 2019 and March 30, 2018, respectively.

Effects of Inflation

orders. The Company does not viewforesee any problems which would prevent it from fulfilling these orders.

Inflation

In the opinion of management, inflation has begun to impact the costs of our operations and depending upon the current duration and degree of higher inflation levels, is expected to have an impact upon our operations in the future. Management will continue to monitor inflation and evaluate the possible future effects of inflation to have a material effect upon its business. Increases in costs of raw materialson our business and labor costs have been offset by increases in the price of the Company’s products, as well as reductions in costs of production, reflecting management’s efforts in this area. While the Company has in the past increased its prices to customers, it has maintained its relatively competitive price position.operations.

However, significant decreases in government and military subcontractor spending have provided excess production capacity in the industry, which in turn has tightened pricing margins.

The Company does not have any off-balance sheet arrangements within the meaning of Item 303 of Regulation S-B.

We are a “smaller reporting company” as defined by Regulation S-K and as such, are not required to provide the information contained in this item pursuant to Regulation S-K.

We do not believe that any of our financial instruments have significant risk associated with market sensitivity. For more information on these investments see Note 2 to our financial statements included in this Form 10-K/A.

We are not exposed to significant financial market risks from changes in foreign currency exchange rates and are only minimally impacted by changes in interest rates. We have not used, and currently do not contemplate using, any derivative financial instruments.

Interest Rate Risk

At any time, fluctuations in interest rates could affect interest earnings on our cash. We believe that the effect, if any, of reasonably possible near-term changes in interest rates on our financial position, results of operations, and cash flows would not be material. Currently, we do not hedge these interest rate exposures. Our primary purpose is to preserve capital. We have not used derivative financial instruments in our investment portfolio.

As of March 29, 2019, our unrestricted cash was $7,204,126 of which $4,757,283 was in an interest-bearing money market account with and the balance of $2,446,843 was maintained in non-interest-bearing checking accounts used to pay operating expenses.

Not required.

IEH CORPORATION

PART II

See our audited Financial Statements for the fiscal yearyears ended March 29, 201931, 2023 and 2022 which follows Item 1516 of this Annual Report on Form 10-K/A.10-K.

None.

None.

Item 9A.    Controls and Procedures

Evaluations(a) Evaluation of Disclosure Controls and Procedures

UnderWe maintain disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the supervisionExchange Act) designed to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and withreported within the participationtime periods specified under the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including theour Chief Executive Officer and our Chief Financial Officer, we evaluatedas appropriate to allow timely decisions regarding required disclosures. As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15e) under the Exchange Act as of March 31, 2023.

Management has used the endframework set forth in the report entitled Internal Control—Integrated Framework published by the Committee of Sponsoring Organizations of the period covered by this Annual Report on Form 10-K/A. Based upon that evaluation,Treadway Commission (2013 framework), known as COSO, to evaluate the effectiveness of our internal control over financial reporting. The following material weaknesses have been identified:

As of March 31, 2023, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures throughout the period covered by this report were effective. As described below, they determined that deficiencies that were previously identified with respect to prior periods were corrected. These deficiencies included how the information required to be disclosed by us in reports filed under the Exchange Act is(i)recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and(ii) accumulated and communicated to our management to allow for timely decisions regarding disclosure. The deficiencies in our internal controls over financial reporting and disclosure controls related toand procedures were not effective based upon the expertise of recording complex accounting issues with respect to stock-based compensation expense.

A controls system cannot provide absolute assurance, however, that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management previously determined following the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2018 that as of March 30, 2018, there wereidentified material weaknesses noted above.

Management is actively engaged in boththe planning for and implementation of remediation efforts to address the identified material weaknesses. The remediation plan includes (i) the engaging of additional experienced financial resources, (ii) the development and implementation of enhanced controls designed to evaluate the appropriateness of policies and procedures, (iii) the implementation of review and monitoring of transactions to ensure compliance with the new policies and procedures, (iv) improvements in the design and effectivenessimplementation of our internal controls over financial reporting. A material weakness is a deficiency, or a combinationenhanced monitoring of deficiencies, in

internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, these weaknesses related to the analysis and reporting of stock-based compensation expense. Additionally, the Company did not report fully diluted earnings per share for the year ended March 30, 2018.

Following the filing of the Company’s Annual Report on Form 10-K, the Company filed Amendment No. 1 to Form 10-K to report properly stock-based compensation and fully diluted earnings per share for the year ended March 30, 2018.

Management immediately thereafter undertook steps to correct these past deficiencies in its system of internal controls over financial reporting and implemented procedures to closely monitor its system of internal controls in the future. Specifically, management implemented protocols to report properly in all future quarterly and annual reports stock-based compensation and fully diluted earnings per share. The Company started properly reporting stock-based compensation in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2018 and in the Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2018 properly reported stock-based compensation and fully diluted earnings per share. Thereafter, the Company properly reported stock-based compensation in the Quarterly Reports on Form 10-Q for the fiscal quarters ended September 28, 2018 and December 28, 2018, respectively.

IEH CORPORATION

PART II

Item 9A.    Controls and Procedures(continued)

Evaluations of Disclosure Controls and Procedures (continued)

In addition, management recommended to the Board of Directors to form an audit committee of the Board which will be responsible to review: (i) all financial reports of the Company including, without limitation, the audited and unaudited financial statements of the Company, as applicable; and (ii) periodically review our disclosureITGC controls, and internal controls over financial reporting. The audit committee will also be authorized to investigate and make recommendations to(v) the Board to implement any necessary systemenhanced training of internal controls over financial reporting to prevent any future deficiency in the internal controls over financial reporting. The audit committee will be comprised of at least three (3) independent directors of the Company. In making this recommendation management believed that these changes were reasonably likely to affect materially and positively the Company’s internal controls over financial reporting. At its meeting on November 27, 2018, the Board of the Directors approved formation of the audit committee and appointed the following independent directors to the audit committee: Eric Hugel, Michael E. Rosenfeld and Allen Gottlieb. Mr. Hugel is designated as our Audit Committee Financial Expert.personnel.

(b) Management’s Report on Internal ControlControls over Financial Reporting

Our management under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, (asas such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal controlsInternal control over financial reporting is arefers to the process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal controls

Internal control over financial reporting includes those policiescannot provide absolute assurance of achieving their objectives. Internal control over financial reporting is a process that involves human diligence and procedures that:

(i)       pertaincompliance and is subject to the maintenance of recordslapses in judgement and breakdowns resulting from human failures. Due to their inherent limitations, there is a risk that in reasonable detail, accuratelymaterial misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. It is possible to design safeguards to reduce, but not eliminate, this risk. Management is responsible for establishing and fairly reflect the transactions and dispositions of the assets of the Company;

(ii)       provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and

(iii)       provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. 

Management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of ourmaintaining adequate internal control over financial reporting as of March 29, 2019. for our company.

Mitigation Steps

In making this evaluation, management usedorder to address the 2013 framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Asmaterial weaknesses stated above, based on our evaluation underManagement undertook the 2013 framework in Internal Control—Integrated Framework, our management has concluded that ourfollowing mitigation steps: