{"url_path":"/sec/iehc/10-k/2026/item-16","section_key":"item-16","section_title":"Item 16 **","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-12","source_url":"https://www.sec.gov/Archives/edgar/data/50292/0001213900-26-068122-index.html","accession_number":"0001213900-26-068122","cik":"0000050292","ticker":"IEHC","issuer_name":"IEH Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/50292/0001213900-26-068122-index.html","primary_entity_key":"0000050292","primary_entity_name":"IEH Corp"},"word_count":7952,"has_tables":true,"body_markdown":"**Item 16.**\n**Form 10-K Summary.**\n\n \n\nNone.\n\n \n\n 37 \n\n \n\n \n\n**IEH CORPORATION**\n\n \n\n**SIGNATURES**\n\n \n\nPursuant to the requirements of Section 13 or 15(d)\nof the Securities Exchange Act of 1934, as amended, IEH Corporation has duly caused this Report to be signed on its behalf by the undersigned,\nthereunto duly authorized.\n\n \n\n \n**IEH CORPORATION**\n\n \n \n \n\n \nBy:\n/s/ David Offerman\n\n \n \nDavid Offerman\n\n \n \nChairman of the Board, President and\n\nChief Executive Officer\n\n(Principal Executive Officer)\n\n \n\nDated: June 12, 2026\n\n \n\nPursuant to the requirements of the Securities Exchange Act of\n1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on\nthe dates indicated.\n\n \n\n/s/ David Offerman\n \nJune 12, 2026\n\nDavid Offerman,\n \n \n\nChairman of the Board, President and\n\nChief Executive Officer\n\n(Principal Executive Officer)\n \n \n\n \n \n \n\n/s/ Subrata Purkayastha\n \nJune 12, 2026\n\nSubrata Purkayastha,\n \n \n\nChief Financial Officer\n\n(Principal Financial Officer)\n \n \n\n \n \n \n\n/s/ Allen Gottlieb\n \nJune 12, 2026\n\nAllen Gottlieb, Director\n \n \n\n \n \n \n\n/s/ Gerald E. Chafetz\n \nJune 12, 2026\n\nGerald E. Chafetz, Director\n \n \n\n \n \n \n\n/s/ Eric C. Hugel\n \nJune 12, 2026\n\nEric C. Hugel, Director\n \n \n\n \n \n \n\n/s/ Michael E. Rosenfeld\n \nJune 12, 2026\n\nMichael E. Rosenfeld, Director\n \n \n\n \n \n \n\n/s/ John P. Spiezio\n \nJune 12, 2026\n\nJohn P. Spiezio, Director\n \n \n\n \n \n \n\n/s/ Brian J. Glenn\n \nJune 12, 2026\n\nBrian J. Glenn, Director\n \n \n\n \n\n 38 \n\n \n\n \n\n**IEH CORPORATION**\n\n**Index to Financial Statements**\n\n \n\n    **Page**\n\n    **Number**\n\n[Independent Auditors’ Report – CBIZ CPAs P.C. (PCAOB ID: 199)](#a_028)   F-2\n\n     \n\n[Balance Sheets](#a_029)   F-3\n\n     \n\n[Statements of Operations](#a_030)   F-4\n\n     \n\n[Statements of Changes in Stockholders’ Equity](#a_031)   F-5\n\n     \n\n[Statements of Cash Flows](#a_032)   F-6\n\n     \n\n[Notes to Financial Statements](#a_033)   F-7\n\n \n\n F-1 \n\n \n\n \n\n**Report of Independent Registered\nPublic Accounting Firm**\n\n \n\nTo the Stockholders and Board of Directors of\n\nIEH Corporation\n\n \n\n**Opinion on the Financial Statements**\n\n** **\n\nWe have audited the accompanying balance sheets\nof IEH Corporation (the “Company”) as of March 31, 2026 and 2025, and the related statements of operations, changes in stockholders’\nequity and cash flows for each of the two years in the period ended March 31, 2026, and the related notes (collectively referred to as\nthe “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial\nposition of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the two years\nin the period ended March 31, 2026, in conformity with accounting principles generally accepted in the United States of America.\n\n** **\n\n**Basis for Opinion**\n\n \n\nThese financial statements are the responsibility\nof the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We\nare a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are\nrequired to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and\nregulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the\nstandards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial\nstatements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged\nto perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding\nof internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal\ncontrol over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur audits included performing procedures to assess\nthe risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond\nto those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.\nOur audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating\nthe overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\n \n\n**Critical Audit Matters**\n\n \n\nCritical audit matters are matters arising from\nthe current period audit of the financial statements that were communicated or required to be communicated to the audit committee and\nthat: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,\nsubjective, or complex judgments. We determined that there are no critical audit matters.\n\n \n\n/s/ CBIZ CPAs P.C.\n\n \n\nCBIZ CPAs P.C.\n\n \n\nWe have served as the Company’s auditor\nsince 2019 (such date takes into account the acquisition of the attest business of Marcum llp\nby CBIZ CPAs P.C. effective November 1, 2024).\n\n \n\nNew York, NY\n\nJune 12, 2026\n\n \n\n F-2 \n\n \n\n \n\n**IEH CORPORATION**\n\n**BALANCE SHEETS**\n\n \n\n  \nAs of\nMarch 31, \n\n  \n2026  \n2025 \n\nAssets \n   \n  \n\nCurrent assets: \n   \n  \n\nCash and cash equivalents \n$9,647,698  \n$10,539,828 \n\nAccounts receivable, net \n 4,719,223  \n 3,210,840 \n\nInventories, net \n 6,809,722  \n 7,265,347 \n\nCorporate income taxes receivable \n 467,994  \n 813,413 \n\nPrepaid expenses and other current assets \n 440,905  \n 201,160 \n\nTotal current assets \n 22,085,542  \n 22,030,588 \n\n  \n    \n   \n\nNon-current assets: \n    \n   \n\nProperty, plant and equipment, net \n 3,309,007  \n 3,128,177 \n\nOperating lease right-of-use assets \n 1,588,589  \n 1,967,752 \n\nSecurity deposit \n 75,756  \n 75,756 \n\nTotal assets \n$27,058,894  \n$27,202,273 \n\n  \n    \n   \n\nLiabilities and Stockholders’ Equity \n    \n   \n\nCurrent liabilities: \n    \n   \n\n    Accounts payable \n$1,426,067  \n$876,730 \n\nCustomer advance payments \n 18,471  \n 173,074 \n\nOperating lease liabilities \n 449,056  \n 395,325 \n\nEquipment financing line of credit \n 256,257  \n \n-\n \n\nOther current liabilities \n 997,947  \n 801,245 \n\nTotal current liabilities \n 3,147,798  \n 2,246,374 \n\n  \n    \n   \n\nNon-Current liabilities: \n    \n   \n\nOperating lease liabilities, net of current \n 1,392,937  \n 1,841,993 \n\nEquipment financing line of credit, net of current \n 159,667  \n \n-\n \n\nTotal liabilities \n 4,700,402  \n 4,088,367 \n\n  \n    \n   \n\nCommitments and Contingencies (Note 12) \n \n \n  \n \n \n \n\n  \n    \n   \n\nStockholders’ Equity \n    \n   \n\nCommon Stock, $0.01 par value; 10,000,000 shares authorized; 2,470,272 and 2,388,251 shares issued and outstanding at March 31, 2026 and March 31, 2025, respectively \n 24,703  \n 23,883 \n\nAdditional paid-in capital \n 8,821,894  \n 8,281,344 \n\nRetained earnings \n 13,511,895  \n 14,808,679 \n\nTotal Stockholders’ Equity \n 22,358,492  \n 23,113,906 \n\nTotal Liabilities and Stockholders’ Equity \n$27,058,894  \n$27,202,273 \n\n \n\nThe accompanying notes are an integral part of\nthese financial statements.\n\n \n\n F-3 \n\n \n\n \n\n**IEH CORPORATION**\n\n**STATEMENTS OF OPERATIONS**\n\n \n\n  \nFor the Fiscal Years Ended\nMarch 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nRevenue \n$29,417,600  \n$28,783,861 \n\n  \n    \n   \n\nCosts and expenses: \n    \n   \n\nCost of products sold \n 23,866,707  \n 21,309,983 \n\nSelling, general and administrative \n 6,410,508  \n 6,154,214 \n\nDepreciation and amortization \n 772,264  \n 744,802 \n\nTotal operating expenses \n 31,049,479  \n 28,208,999 \n\n  \n    \n   \n\nOperating (loss) income \n (1,631,879) \n 574,862 \n\n  \n    \n   \n\nOther income, net: \n    \n   \n\nInterest income, net \n 292,349  \n 425,291 \n\nTotal other income, net \n 292,349  \n 425,291 \n\n  \n    \n   \n\n(Loss) income before benefit from (provision for) income taxes \n (1,339,530) \n 1,000,153 \n\nBenefit from (provision for) income taxes \n 42,746  \n (1,115)\n\nNet (loss) income \n$(1,296,784) \n$999,038 \n\n  \n    \n   \n\nNet (loss) earnings per common share \n    \n   \n\nBasic \n$(0.53) \n$0.42 \n\nDiluted \n$(0.53) \n$0.41 \n\n  \n    \n   \n\nWeighted-average number of common and common equivalent shares: \n    \n   \n\nBasic \n 2,424,216  \n 2,381,824 \n\nDiluted \n 2,424,216  \n 2,443,255 \n\n \n\nThe accompanying notes are an integral part of\nthese financial statements.\n\n \n\n F-4 \n\n \n\n \n\n**IEH CORPORATION**\n\n**STATEMENTS OF CHANGES IN STOCKHOLDERS’\nEQUITY**\n\n \n\n  \nCommon Stock  \nAdditional\nPaid-in  \nRetained  \nTotal Stockholders’ \n\n  \nShares  \nAmount  \nCapital  \nEarnings  \nEquity \n\n  \n   \n   \n   \n   \n  \n\nBalances at April 1, 2024 \n 2,380,251  \n$23,803  \n$7,966,074  \n$13,809,641  \n$21,799,518 \n\n  \n    \n    \n    \n    \n   \n\nExercise of stock options \n 8,000  \n 80  \n 48,670  \n \n-\n  \n 48,750 \n\n  \n    \n    \n    \n    \n   \n\nStock-based compensation \n -  \n \n-\n  \n 266,600  \n \n-\n  \n 266,600 \n\n  \n    \n    \n    \n    \n   \n\nNet income \n -  \n \n-\n  \n \n-\n  \n 999,038  \n 999,038 \n\n  \n    \n    \n    \n    \n   \n\nBalances at March 31, 2025 \n 2,388,251  \n$23,883  \n$8,281,344  \n$14,808,679  \n$23,113,906 \n\n  \n    \n    \n    \n    \n   \n\nExercise of stock options \n 82,021  \n 820  \n 275,350  \n \n-\n  \n 276,170 \n\n  \n    \n    \n    \n    \n   \n\nStock-based compensation \n -  \n \n-\n  \n 265,200  \n \n-\n  \n 265,200 \n\n  \n    \n    \n    \n    \n   \n\nNet loss \n -  \n \n-\n  \n \n-\n  \n (1,296,784) \n (1,296,784)\n\n  \n    \n    \n    \n    \n   \n\nBalances at March 31, 2026 \n 2,470,272  \n$24,703  \n$8,821,894  \n$13,511,895  \n$22,358,492 \n\n \n\nThe accompanying notes are an integral part of\nthese financial statements.\n\n \n\n F-5 \n\n \n\n \n\n**IEH CORPORATION**\n\n**STATEMENTS OF CASH FLOWS**\n\n** **\n\n  \nFor the Fiscal Years Ended\nMarch 31, \n\n  \n2026  \n2025 \n\nCash flows from operating activities: \n   \n  \n\nNet (loss) income \n$(1,296,784) \n$999,038 \n\nAdjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: \n    \n   \n\nDepreciation and amortization \n 772,264  \n 744,802 \n\nStock-based compensation expense \n 265,200  \n 266,600 \n\nInventory obsolescence provision \n 297,763  \n (62,904)\n\nOperating lease right-of-use assets \n 502,874  \n 502,877 \n\n  \n    \n   \n\nChanges in assets and liabilities: \n    \n   \n\nAccounts receivable \n (1,508,383) \n 697,157 \n\nInventories \n 157,862  \n 1,529,175 \n\nCorporate income taxes receivable \n 345,419  \n 1,385,761 \n\nPrepaid expenses and other current assets \n (239,745) \n (7,442)\n\nAccounts payable \n 549,337  \n 95,648 \n\nCustomer advance payments \n (154,603) \n (709,451)\n\nOperating lease liabilities \n (519,036) \n (497,679)\n\nOther current liabilities \n 196,702  \n (59,963)\n\nNet cash (used in) provided by operating activities \n (631,130) \n 4,883,619 \n\n  \n    \n   \n\nCash flows from investing activities: \n    \n   \n\nAcquisition of property, plant and equipment \n (953,094) \n (532,364)\n\nNet cash used in investing activities \n (953,094) \n (532,364)\n\n  \n    \n   \n\nCash flows from financing activities: \n    \n   \n\n   Proceeds from equipment financing loan \n 415,924  \n \n-\n \n\nProceeds from exercise of stock options \n 276,170  \n 48,750 \n\nNet cash provided by financing activities \n 692,094  \n 48,750 \n\n  \n    \n   \n\nNet (decrease) increase in cash and cash equivalents \n (892,130) \n 4,400,005 \n\nCash and cash equivalents - beginning of period \n 10,539,828  \n 6,139,823 \n\nCash and cash equivalents - end of period \n$9,647,698  \n$10,539,828 \n\nSupplemental disclosures of cash flow information: \n    \n   \n\nCash paid during the year for: \n    \n   \n\nInterest \n$5,509  \n$\n-\n \n\nIncome Taxes \n$33,334  \n$99,269 \n\n \n\nThe accompanying notes are an integral part of\nthese financial statements.\n\n \n\n F-6 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 1**\n**DESCRIPTION OF BUSINESS:**\n\n \n\n**Overview:**\n\n \n\nIEH Corporation (hereinafter referred to as “IEH”\nor the “Company”) began operations in New York, New York in 1941 and was incorporated as a New York corporation in March,\n1943, when Louis Offerman founded L. Offerman Tool & Die with his two sons, Bernard and Seymour.\n\n \n\nThe Company designs and manufactures Hyperboloid connectors\nthat not only accommodate, but exceed military and aerospace specification standards.\n\n \n\n**Note 2**\n**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:**\n\n** **\n\n**Revenue Recognition:**\n\n \n\nThe core principle underlying Accounting Standards Codification\n(“ASC”) ASC Topic 606 “Revenue from Contracts with Customers” (“ASC 606”), is to recognize revenue\nto depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects\nto be entitled to in exchange for those goods or services. ASC 606 sets out the following steps for an entity to follow when applying\nthe core principle to its revenue generating transactions:\n\n \n\n \n●\nIdentify the contract with a customer\n\n \n \n \n\n \n●\nIdentify the performance obligations in the contract\n\n \n \n \n\n \n●\nDetermine the transaction price\n\n \n \n \n\n \n●\nAllocate the transaction price to the performance obligations\n\n \n \n \n\n \n●\nRecognize revenue when (or as) each performance obligation is satisfied\n\n \n\nThe Company recognizes revenue and the related cost of products\nsold when the performance obligations are satisfied. The performance obligations are typically satisfied upon shipment of physical goods.\nIn addition to the satisfaction of the performance obligations, the following conditions are required for revenue recognition: an arrangement\nexists, there is a fixed price, and collectability is reasonably assured.\n\n \n\nThe Company does not offer any discounts, credits or other\nsales incentives. Historically, the Company has not had an issue with uncollectible accounts receivable.\n\n \n\nThe Company will accept a return of defective products within\none year from shipment for repair or replacement at the Company’s option. If the product is repairable, the Company at its own cost,\nwill repair and return it to the customer. If unrepairable, the Company will provide a replacement at its own cost. Historically, returns\nand repairs have not been material.\n\n \n\n F-7 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 2**\n**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**\n\n \n\n**Revenue Recognition, continued**\n\n \n\nThe Company’s disaggregated revenue by geographical\nlocation is as follows:\n\n \n\n  \nFor the Fiscal Years Ended\nMarch 31, \n\n  \n2026  \n2025 \n\nDomestic \n$27,704,583  \n$27,138,838 \n\nInternational \n 1,713,017  \n 1,645,023 \n\nTotal \n$29,417,600  \n$28,783,861 \n\n  \n\nThe Company’s disaggregated revenue by industry as\na percentage of total revenue is provided below:\n\n \n\n  \nFor the Fiscal Years Ended\nMarch 31, \n\n  \n2026  \n2025 \n\nIndustry \n%  \n% \n\nDefense \n 63.2  \n 65.7 \n\nCommercial Aerospace \n 25.2  \n 19.9 \n\nSpace \n 7.8  \n 10.6 \n\nOther \n 3.8  \n 3.8 \n\n  \n 100.0  \n 100.0 \n\n \n\n**Cash and Cash Equivalents:**\n\n \n\nCash and cash equivalents represent cash and highly liquid investments\nwith original maturities of three months or less. The Company places its cash and cash equivalents with high credit quality financial\ninstitutions that may exceed federally insured amounts at times.\n\n \n\n**Inventories:**\n\n \n\nInventories are comprised of raw materials, work-in-process\nand finished goods, and are stated at cost, on an average basis, which does not exceed net realizable value. The Company manufactures\nproducts pursuant to specific technical and contractual requirements.\n\n \n\nThe Company reviews its purchase and usage activity of its\ninventory of parts as well as work in process and finished goods to determine which items of inventory have become obsolete within the\nframework of current and anticipated orders. The Company estimates which materials may be obsolete and which products in work in process\nor finished goods may be sold at less than cost. A periodic adjustment, based upon historical experience is made to inventory in recognition\nof this impairment. The Company’s allowance for obsolete inventory was $1,008,261 and $710,498 as of March 31, 2026 and 2025, respectively,\nand was reflected as a reduction of inventory.\n\n \n\n F-8 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n** **\n\n**Note 2**\n**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**\n\n** **\n\n**Concentration of Credit Risk:**\n\n \n\nFinancial instruments which potentially subject the Company\nto concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.\n\n \n\nAt times, the Company’s cash and cash equivalents in banks\nwas in excess of the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any loss as a result of these\ndeposits. The Company’s accounts receivable are derived from revenue earned from customers or invoices billed to customers that\nrepresent unconditional rights to payment. Our customers are located within the U.S. and internationally. The Company believes there is\nno material exposure to any significant credit risks related to its accounts receivable and has not experienced any material losses in\nsuch accounts.\n\n** **\n\n**Property, Plant and Equipment:**\n\n \n\nProperty, plant and equipment are stated at cost less accumulated\ndepreciation and amortization. The Company provides for depreciation and amortization on a straight-line basis over the estimated useful\nlives (5–7 years) of the related assets.\n\n \n\nMaintenance and repair expenditures are charged to operations,\nand renewals and betterments are capitalized. Items of property, plant and equipment, which are sold, retired or otherwise disposed of,\nare removed from the asset and accumulated depreciation or amortization account. Any gain or loss thereon is either credited or charged\nto operations.\n\n** **\n\n**Income Taxes:**\n\n** **\n\nThe Company’s current provision for income taxes is\nbased upon its estimated taxable income in each of the jurisdictions in which it operates, after considering the impact on taxable income\nof temporary and permanent differences resulting from different treatment of items for tax and financial reporting purposes. Deferred\ntax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement\ncarrying amounts of existing assets and liabilities and their respective tax bases and any operating loss or tax credit carryforwards.\nDeferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those\ntemporary differences are expected to be recovered or settled. The ultimate realization of deferred tax assets is dependent upon the generation\nof future taxable income in those periods in which temporary differences become deductible. Should management determine that it is more\nlikely than not that some portion of the deferred tax assets will not be realized, a valuation allowance against the deferred tax assets\nwould be established in the period such determination was made.\n\n \n\n F-9 \n\n \n\n  \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n** **\n\n**Note 2**\n**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**\n\n** **\n\n**Uncertain Tax Positions:**\n\n \n\nTax benefits are recognized only for tax positions that are\nmore likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit\nthat is greater than 50 percent likely to be realized upon settlement. A liability for unrecognized tax benefits is recorded for any tax\nbenefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. The Company’s\npolicy is to record expense in the statement of operations.\n\n** **\n\n**Net (Loss) Income Per Share:**\n\n \n\nThe Company accounts for earnings per share pursuant to ASC\nTopic 260, “Earnings per Share”, which requires disclosure on the financial statements of “basic” and “diluted”\nearnings per share. Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number\nof common shares outstanding for the reporting period. Diluted net (loss) income per common share is computed by dividing net (loss) income\nby the weighted average number of common shares outstanding plus common stock equivalents (if dilutive).\n\n \n\nBasic and diluted net (loss) income per common share is calculated\nas follows:\n\n \n\n  \nFor the Fiscal Years Ended\nMarch 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nNet (loss) income \n$(1,296,784) \n$999,038 \n\n  \n    \n   \n\nNet (loss) income per common share: \n    \n   \n\nBasic \n$(0.53) \n$0.42 \n\nDiluted \n$(0.53) \n$0.41 \n\n  \n    \n   \n\nWeighted average number of common shares outstanding – basic \n 2,424,216  \n 2,381,824 \n\nDilutive effect of options to the extent that such options are determined to be in the money for the period \n \n-\n  \n 61,431 \n\nWeighted average number of common shares outstanding – fully diluted \n 2,424,216  \n 2,443,255 \n\n \n\nPotentially dilutive securities outlined in the table below\nhave been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.\n\n \n\n  \nFor the Fiscal Years Ended\nMarch 31, \n\n  \n2026  \n2025 \n\n  \n    \n   \n\nPotentially dilutive options to purchase common shares \n 455,000  \n 313,204 \n\n \n\n F-10 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 2**\n**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**\n\n \n\n**Fair Value of Financial Instruments:**\n\n \n\nThe carrying value of the Company’s financial instruments,\nconsisting of accounts receivable and accounts payable, approximate their fair value due to the relatively short maturity of these instruments.\nThe Company is exposed to credit risk through its cash and cash equivalents but mitigates this risk by keeping these deposits at major\nfinancial institutions.\n\n \n\nASC Topic 820, “Fair Value Measurements and Disclosures”,\nprovides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation\ntechniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical\nassets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).\n\n \n\nFair value is defined as an exit price, representing the\namount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants.\n\n \n\nFair value is a market-based measurement that is determined\nbased on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to\nprioritize the inputs in measuring fair value as follows:\n\n \n\nLevel 1 - Quoted prices in active markets for identical assets\nor liabilities.\n\n \n\nLevel 2 - Quoted prices for similar assets or liabilities\nin active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are\nobservable, either directly or indirectly.\n\n \n\nLevel 3 - Significant unobservable inputs that cannot be\ncorroborated by market data and inputs that are derived principally from or corroborated by observable market data or correlation by other\nmeans.\n\n** **\n\n**Use of Estimates:**\n\n \n\nThe preparation of financial statements in conformity with\nU.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and\nexpenses, and disclosure of contingent assets and liabilities at the date of the financial statements. The Company utilizes estimates\nwith respect to determining the useful lives of fixed assets, the fair value of stock-based instruments, the calculation of inventory\nobsolescence, as well as determining the amount of the valuation allowance for deferred income tax assets, net. Actual amounts could differ\nfrom those estimates.\n\n \n\n F-11 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n** **\n\n**Note 2**\n**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**\n\n** **\n\n**Segment Information:**\n\n \n\nThe Company identifies its operating segments in accordance\nwith Financial Accounting Standards Board (“FASB”) ASC Topic 280, “Segment Reporting”. Operating segments are\ndefined as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating\ndecision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief\noperating decision maker (“CODM”), its Chief Executive Officer, manages the Company’s operations on a combined basis\nfor the purposes of allocating resources. Accordingly, the Company has determined it operates and manages its business in a single reportable\noperating segment.\n\n \n\nThe Company’s CODM reviews the segment net (loss) income\nthat also is reported on the income statement as net (loss) income on a monthly basis, and reviews revenues by industry on a quarterly\nbasis. The measure of segment assets is reported on the balance sheet as total assets.\n\n \n\n**Impairment of Long-Lived Assets:**\n\n \n\nThe Company has adopted the provisions of ASC Topic 360, “Property,\nPlant and Equipment-Impairment or Disposal of Long Lived Assets,” and requires that long-lived assets and certain identifiable intangibles\nto be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount\nof an asset group may not be recoverable. There were no long-lived asset impairments recognized by the Company for the fiscal years ended\nMarch 31, 2026 and 2025, respectively.\n\n** **\n\n**Stock-Based Compensation:**\n\n \n\nCompensation expense for stock options granted to directors,\nofficers 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\nis recognized ratably over the service period of the award. The fair value of stock options is estimated using the Black-Scholes valuation\nmodel. The fair value of any other stock awards is generally the market price of the Company’s common stock on the date of the grant.\nIt is the Company’s policy that any unrecognized stock-based compensation cost would be adjusted for actual forfeitures as they\noccur.\n\n \n\nFair value of the stock options granted during the fiscal\nyears ended March 31, 2026 and 2025 were determined using the assumptions provided below.\n\n \n\n   For the Fiscal Years Ended\nMarch 31, \n\n   2026   2025 \n\nWeighted average stock price  $8.28   $7.47 \n\nExpected life (in years)   5.0    5.0 \n\nExpected volatility   57.9%   52.3%\n\nDividend yield   \n-\n%   \n-\n%\n\nWeighted average risk-free interest rate, per annum   4.0%   4.6%\n\n** **\n\n F-12 \n\n \n\n ** **\n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 2**\n**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**\n\n** ** \n\n**Recent Accounting Standard Adopted**:\n\n \n\nIn December 2023, the FASB issued Accounting Standards Update\n(“ASU”) 2023-09 – Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the transparency\nof income tax disclosures, primarily by requiring public business entities to disclose specific categories in the rate reconciliation\ntabular presentation, as well as by providing additional information for reconciling items that meet a quantitative threshold. ASU 2023-09\nalso requires disaggregated disclosures of federal and state income taxes paid. The Company adopted ASU 2023-09 in the fourth quarter\nof the year ended March 31, 2026 on a prospective basis. The adoption of this ASU had no material impact on the Company’s financial\nposition, results of operations, or cash flows. Additional required disclosure has been included within Note 9 – Income Taxes.\n\n \n\n**Recent Accounting Standard Not Yet Adopted:**\n\n \n\nIn November 2024, the FASB issued ASU 2024-03, – Income\nStatement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement\nExpenses (“ASU 2024-03”). This ASU requires disclosures about specific types of expenses included in the expense captions\npresented on the face of the statement of operations as well as disclosures about selling expenses. The standard is effective for annual\nreporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements\nwill be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company will evaluate the\nfull extent of the adoption of ASU 2024-03, but believes it will not have a material impact on its financial statements and disclosures.\n\n \n\n**Subsequent Events:**\n\n \n\nThe Company evaluated subsequent events and transactions\nthat occurred after the balance sheet date up to the date that the financial statements were available to be issued. The Company did not\nidentify any subsequent events that would have required adjustment or disclosure in the financial statements.\n\n \n\n**Note 3**\n**INVENTORIES:**\n\n \n\nInventories are comprised of the following: \n\n \n\n  \nAs of March 31, \n\n  \n2026  \n2025 \n\nRaw materials \n$6,456,795  \n$6,436,909 \n\nWork in progress \n 996,554  \n 989,172 \n\nFinished goods \n 364,634  \n 549,764 \n\nAllowance for obsolete inventory \n (1,008,261) \n (710,498)\n\n  \n$6,809,722  \n$7,265,347 \n\n \n\n**Note 4**\n**PROPERTY, PLANT AND EQUIPMENT:**\n\n \n\nProperty, plant and equipment are as follows:\n\n \n\n  \nAs of March 31, \n\n  \n2026  \n2025 \n\nComputers \n$834,616  \n$697,206 \n\nLeasehold improvements \n 2,974,141  \n 2,940,271 \n\nMachinery and equipment \n 9,016,604  \n 8,534,831 \n\nTools and dies \n 5,813,887  \n 5,529,923 \n\nFurniture and fixtures \n 388,994  \n 372,917 \n\nWebsite development cost \n 9,785  \n 9,785 \n\n  \n$19,038,027  \n$18,084,933 \n\n  \n    \n   \n\nLess: accumulated depreciation and amortization \n (15,729,020) \n (14,956,756)\n\nProperty, plant and equipment, net \n$3,309,007  \n$3,128,177 \n\n \n\nDepreciation and amortization expense for the fiscal years\nended March 31, 2026 and 2025 was $772,264 and $744,802, respectively.\n\n \n\n F-13 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 5**\n**OTHER CURRENT LIABILITIES:**\n\n \n\nOther current liabilities are comprised of the following:\n\n \n\n  \nAs of March 31, \n\n  \n2026  \n2025 \n\nPayroll and vacation accruals \n$615,263  \n$687,961 \n\nSales commissions \n 192,278  \n 29,604 \n\nOther current liabilities \n 190,406  \n 83,680 \n\n  \n$997,947  \n$801,245 \n\n \n\n**Note 6**\n**LEASES:**\n\n \n\nUnder ASC Topic 842, “Leases”, lease expense is recognized\nas a single lease cost on a straight-line basis over the lease term. The lease term consists of non-cancelable periods and may include\noptions to extend or terminate the lease term, when it is reasonably certain such options will be exercised.\n\n \n\nThe Company enters into contracts in the normal course of\nbusiness and assesses whether any such contracts contain a lease. The Company determines if an arrangement is a lease at inception if\nit conveys the right to control the identified asset for a period of time in exchange for consideration. The Company classifies leases\nas operating or financing in nature and records the associated lease liability and right-of-use asset on its balance sheet. The lease\nliability represents the present value of future lease payments, net of lease incentives, discounted using an incremental borrowing rate,\nwhich is a management estimate based on the information available at the commencement date of a lease arrangement. With respect to operating\nlease arrangements, the Company accounts for lease components, and non-lease components that are fixed, as a single lease component. Non-lease\ncomponents that are variable are expensed as incurred as in the statement of operations. The Company recognizes costs associated with\nlease arrangements having an initial term of 12 months or less (“short-term leases”) on a straight-line basis over the lease\nterm; such short-term leases are not recorded on the balance sheet.\n\n \n\nBalance sheet information related to our leases is presented\nbelow:\n\n \n\n      As of March 31, \n\n   Balance Sheet Location  2026   2025 \n\nOperating leases:             \n\nRight-of-use assets  Operating lease right-of-use assets  $1,588,589   $1,967,752 \n\n              \n\nRight-of-use liability, current  Operating lease liabilities  $449,056   $395,325 \n\n              \n\nRight-of-use lease liability, long-term  Operating lease liabilities, non-current  $1,392,937   $1,841,993 \n\n \n\nThe lease expense for the fiscal years ended March 31, 2026\nand 2025 was $564,077 and $571,383, respectively. In addition to the base rent, the Company pays insurance premiums and utility charges\nrelating to the use of the premises. The Company considers its present facilities to be adequate for its present and anticipated future\nneeds.\n\n \n\nThe basic minimum annual rental remaining on the leases is\n$2,081,688 as of March 31, 2026.\n\n \n\n F-14 \n\n \n\n  \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 6**\n**LEASES (Continued):**\n\n \n\nThe weighted-average remaining lease term and the weighted\naverage discount rate for operating leases were:\n\n \n\n   As of March 31, \n\n   2026   2025 \n\nOther information        \n\nWeighted-average discount rate – operating leases   6.00%   6.00%\n\nWeighted-average remaining lease term – operating lease (in years)   4.0    4.9 \n\n \n\nThe total remaining operating lease payments included in\nthe measurement of lease liabilities on the Company’s balance sheet as of March 31, 2026 was as follows:\n\n \n\nFor the fiscal year ended March 31: \n\n**Operating Lease**\n\n**Payments**\n \n\n2027 \n$547,460 \n\n2028 \n 563,891 \n\n2029 \n 408,429 \n\n2030 \n 334,492 \n\n2031 \n 227,416 \n\nThereafter \n \n-\n \n\nTotal gross operating lease payments \n 2,081,688 \n\nLess: imputed interest \n (239,695)\n\nTotal lease liabilities, reflecting present value of future minimum lease payments \n$1,841,993 \n\n \n\n**Note 7**\n**REVOLVING LINE OF CREDIT:**\n\n** **\n\nOn August 26, 2025, the Company entered into a revolving line\nof credit agreement (“Revolving Line of Credit”) with JPMorgan Chase Bank, N.A. (“Chase Bank”) for up to $1.0\nmillion, bearing interest at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.15%. The Revolving Line of Credit\ncontains certain financial covenants, including a fixed charge coverage ratio (the “FCCR”) of at least 1.20, tested annually,\nand matures on July 31, 2026. As of March 31, 2026, the Company’s FCCR was below the covenant requirement. Effective for the fiscal\nyear ended March 31, 2026, Chase Bank waived the covenant exception. As of March 31, 2026, there was no outstanding borrowing under the\nRevolving Line of Credit. The Revolving Line of Credit is collateralized by a first-priority security interest in all property of the\nCompany.\n\n \n\n**Note 8**\n**EQUIPMENT FINANCING LINE OF CREDIT:**\n\n** **\n\nOn September 8, 2025, the Company entered into a $450,000 equipment\nfinancing arrangement with Chase Bank, bearing interest at a fixed rate of 5.51%, to be repaid over a 60-month period (“Equipment\nFinancing Line of Credit”). The Equipment Financing Line of Credit is expected to be utilized to purchase machine tools for production.\nFunding is on an equipment project basis, and once a project is fully funded, the obligation for that project is to be repaid by the execution\nof term note payable to Chase Bank. The Equipment Financing Line of Credit contains certain financial covenants, consistent with the requirements\nunder the Revolving Line of Credit. As of March 31, 2026, the Company’s FCCR was below the covenant requirement for the Equipment\nFinancing Line of Credit. Effective for the fiscal year ended March 31, 2026, Chase Bank waived the covenant exception. As of March 31,\n2026, the Company had an outstanding draw of $415,924, of which $256,257 is reflected within equipment financing line of credit on the\nbalance sheet and $159,667 is reflected within equipment financing line of credit, net of current on the balance sheet. The borrowings\nunder the Equipment Financing Line of Credit are collateralized by a first lien on the related equipment financed under the arrangement.\n\n \n\n F-15 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 9**\n**INCOME TAXES:**\n\n \n\nThe Company accounts for income taxes under the provisions\nof ASC Topic 740 (“ASC 740”), “Income Taxes”. Under ASC 740, deferred income tax assets or liabilities are computed\nbased upon the temporary differences between the financial statement and income tax bases of assets and liabilities using the currently\nenacted marginal income tax rates. Deferred income tax expense or credits are based on the changes in the deferred income tax assets or\nliabilities from period to period. \n\n \n\nThe provision (benefit) for income taxes consists of the\nfollowing:\n\n \n\n  \nFor the Fiscal Years Ended\nMarch 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nCurrent: \n   \n  \n\nFederal \n$(42,010) \n$64,300 \n\nState and local \n (736) \n (63,185)\n\nTotal current tax provision (benefit) \n (42,746) \n 1,115 \n\n  \n    \n   \n\nDeferred: \n    \n   \n\nFederal \n \n-\n  \n \n-\n \n\nState and local \n \n-\n  \n \n-\n \n\nTotal deferred tax expense \n \n-\n  \n \n-\n \n\n  \n    \n   \n\nTotal provision (benefit) \n$(42,746) \n$1,115 \n\n \n\nThe tax effects of temporary differences that give rise to\nsignificant portions of the deferred tax assets are as follows:\n\n \n\n  \nAs of March 31, \n\n  \n2026  \n2025 \n\nDeferred tax assets: \n   \n  \n\nNet operating loss \n$1,713,110  \n$1,416,684 \n\nStock options \n 832,484  \n 903,449 \n\nOperating right-of-use liability \n 444,981  \n 519,058 \n\nInventory \n 255,855  \n 187,534 \n\nCapitalized research and development costs \n 167,957  \n 241,761 \n\nResearch and development tax credits \n 27,632  \n \n-\n \n\nDeferred expenses \n 18,995  \n \n-\n \n\nTotal deferred tax assets \n 3,461,014  \n 3,268,486 \n\nValuation allowance \n (2,666,961) \n (2,319,591)\n\nDeferred tax assets, net of valuation allowance \n 794,053  \n 948,895 \n\n  \n    \n   \n\nDeferred tax liabilities: \n    \n   \n\nDepreciation \n 419,146  \n 492,376 \n\nOperating right-of-use asset \n 374,907  \n 456,519 \n\nTotal deferred tax liabilities \n 794,053  \n 948,895 \n\n  \n    \n   \n\nDeferred tax asset (liability), net \n$\n-\n  \n$\n-\n \n\n \n\nThe change in the Company’s valuation allowance is\nas follows:\n\n \n\n  \nFor the Fiscal Year Ended\n\nMarch 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nBeginning of year \n$2,319,591  \n$2,537,690 \n\nIncrease (decrease) in valuation allowance \n 347,370  \n (218,099)\n\nEnd of year \n$2,666,961  \n$2,319,591 \n\n \n\n F-16 \n\n \n\n  \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 9**\n**INCOME TAXES (Continued):**\n\n \n\nA reconciliation of the provision for income taxes with the\namounts computed by applying the statutory Federal income tax rate to income before provision for income taxes is as follows:\n\n \n\n  \nFor the Fiscal Year Ended\nMarch 31, 2026 \n\n  \n   \n  \n\nU.S. federal statutory rate \n$(281,301) \n 21.0%\n\nState taxes, net of federal benefit(a) \n (736) \n \n-\n%\n\nValuation allowance \n 302,384  \n (22.6)%\n\nResearch and development tax credit \n (27,632) \n 2.1%\n\nNontaxable or nondeductible items \n    \n   \n\nStock-based compensation \n (34,230) \n 2.6%\n\nHome office and employee reimbursements \n 26,981  \n (2.0)%\n\nOther \n    \n   \n\nTrue-up of tax provision \n (28,212) \n 2.1%\n\nEffective tax rate \n$(42,746) \n 3.2%\n\n \n\n(a)State\nand local taxes in California and Massachusetts comprise the majority of the state taxes, net of the federal benefit.\n\n \n\nThe reconciliation of the U.S federal income tax provision for\nthe year ended March 31, 2026 above reflects the adoption of ASU 2023-09 in the fourth quarter of the fiscal year ended March 31, 2026,\non a prospective basis. See Note 2, Summary of Significant Accounting Policies – Recent Accounting Standards Adopted, for additional\ninformation on the adoption of ASU 2023-09.\n\n \n\nThe reconciliation of the U.S. federal income tax provision\nat the statutory federal income tax rate of 21.0% for the year ended March 31, 2025 to our provision for income taxes, as previously disclosed,\nprior to the adoption of ASU 2023-09, was as follows:\n\n \n\n  \nFor the\n\nFiscal Year\n\nEnded\nMarch 31,\n\n2025 \n\n  \n  \n\nU.S. federal statutory rate \n 21.0%\n\nState taxes, net of federal benefit \n 2.2%\n\nStock-based compensation \n (0.1)%\n\nOther \n 3.0%\n\nTrue-up of tax provision \n (4.2)%\n\nValuation allowance \n (21.8)%\n\nEffective tax rate \n 0.1%\n\n \n\nFor the year ended March 31, 2026, the Company’s effective\ntax rate was 3.2%, which consisted principally of a federal rate of 21%, the Company’s estimate of state taxes, net of federal benefit,\nof -%, research and development tax credit of 2.1%, a true-up of the tax provision of 2.1%, offset by an increase in the valuation allowance\nfor the Company’s deferred tax assets of 22.6% at March 31, 2026.\n\n \n\nFor the year ended March 31, 2025, the Company’s effective\ntax rate was 0.1%, which consisted principally of a federal rate of 21%, the Company’s estimate of state taxes, net of federal benefit,\nof 2.2%, offset by a credit of (4.2%) for true-ups and a decrease (21.8%) in the valuation allowance for the Company’s deferred\ntax assets at March 31, 2025.\n\n \n\n F-17 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 9**\n**INCOME TAXES (Continued):**\n\n \n\nIncome taxes paid, net of (refunds), are as follows:\n\n \n\n  \nFor the\n\nFiscal Year\n\nEnded\nMarch 31,\n\n2026 \n\n  \n  \n\nFederal \n$(396,010)\n\nState and local \n 7,834 \n\nTotal \n$(388,176)\n\n \n\nDuring the fiscal year ended March 31, 2026, income taxes paid,\nnet of refunds was a net refund of $388,176. The refund of federal income taxes was principally attributable to the receipt of a refund\nin the amount of $418,000 related to the fiscal year ended March 31, 2024. State and local payments were principally attributable to payments\nto the state of Massachusetts.\n\n \n\nAs of March 31, 2026, for U.S. federal and state income tax reporting\npurposes, the Company has approximately $9,718,000 of unused net operating losses (“NOLs”) available for carry forward to\nfuture years. As a result of the Tax Cuts and Jobs Act of 2017 (“TCJA”), for U.S. income tax purposes, NOLs generated in tax\nyears beginning after December 31, 2017 may be carried forward indefinitely to offset future taxable income. The total amount of the Federal\nNOL as of March 31, 2026, may be carried forward indefinitely. The state and city NOLs may generally be carried forward for twenty years\nand may be applied against future taxable income. Further, the benefit from utilization of NOL carry forwards could be subject to limitations\ndue to material ownership changes that could occur if the Company issues additional shares of common stock.\n\n \n\nIn July 2025, U.S tax legislation known as the “One Big\nBeautiful Act”, or OBBBA, was signed into law which makes permanent many of the tax provisions enacted in 2017 as part of the TCJA\nthat were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, including depreciation\nand timing for the deductibility of research and development expenses. The legislation has multiple effective dates, with certain provisions\neffective in 2025 and others implemented through 2027. The OBBBA did not have a material effect on the Company’s financial statements\nfor the year ended March 31, 2026.\n\n \n\nThe Company remains subject to examination by tax authorities\nfor fiscal tax years ended March 31, 2022 and later.\n\n \n\nBased upon the Company’s recent taxable loss history,\nthe Company performed an analysis and determined that a deferred tax asset valuation allowance of $2,666,961 and $2,319,591 was required\nfor the fiscal years ended March 31, 2026 and 2025, respectively.\n\n \n\nThe Company has previously recorded liabilities for underpayment\nof income taxes and related interest and penalties for uncertain tax positions based on the determination of whether tax benefits claimed\nor expected to be claimed on a tax return should be recorded in the financial statements. At March 31, 2026 the amount included in corporate\nincome taxes receivable is a liability of 177,618, inclusive of penalties and interest totaling $72,644. This amount is unchanged from\nMarch 31, 2025. \n\n \n\nThe following is a tabular reconciliation of the total amounts\nof unrecognized tax benefits, excluding interest and penalties, for the fiscal years ended March 31, 2026 and 2025:\n\n \n\n  \nFor the Fiscal Year Ended\n\nMarch 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nUnrecognized tax benefits, beginning of year \n$104,974  \n$104,974 \n\nDecreases of tax positions taken in prior years \n \n-\n  \n \n-\n \n\nIncreases based on tax positions taken in current year \n \n-\n  \n \n-\n \n\nUnrecognized tax benefits, end of year \n$104,974  \n$104,974 \n\n \n\n F-18 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 10**\n**EQUITY INCENTIVE PLANS:**\n\n** **\n\n**2011 Equity Incentive Plan**\n\n \n\nOn August 31, 2011, the Company’s shareholder approved\nthe adoption of the Company’s 2011 Equity Incentive Plan (“2011 Plan”) to provide for the grant of stock options and\nrestricted stock awards to purchase up to 750,000 shares of the Company’s common stock to all employees, consultants and other eligible\nparticipants including senior management and members of the Board of Directors of the Company. The 2011 Equity Incentive Plan expired\non August 31, 2021 after which no further awards will be granted under such plan.\n\n** **\n\n**2020 Equity Incentive Plan**\n\n \n\nOn November 18, 2020, the Board of Directors approved the\nCompany’s 2020 Equity Based Compensation Plan (the “2020 Plan”) for submission to shareholders at the 2020 annual meeting\nof shareholders. On December 16, 2020, the Company’s shareholders approved the adoption of the 2020 Plan, which provides for the\ngrant of stock options and restricted stock awards to purchase up to 750,000 shares of the Company’s common stock to award in the\nfuture as incentive compensation to employees, senior management and members of the Board of Directors of the Company.\n\n \n\nOptions granted to employees under both the 2011 Plan and\nthe 2020 Plan (together the “Plans”) may be designated as options which qualify for incentive stock option treatment under\nSection 422A of the Internal Revenue Code, or options which do not qualify (non-qualified stock options).\n\n \n\nUnder the Plans, the exercise price of an option designated\nas 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\ngranted. In the event an option designated as an incentive stock option is granted to a ten percent (10%) or greater shareholder, such\nexercise price shall be at least 110 percent (110%) of the fair market value of the Company’s common stock and the option must\nnot be exercisable after the expiration of ten years from the day of the grant. The Plans also provide that holders of options that wish\nto pay for the exercise price of their options with shares of the Company’s common stock must have beneficially owned such stock\nfor at least six months prior to the exercise date.\n\n \n\nExercise prices of non-incentive stock options may not be\nless than the fair market value of the Company’s common stock.\n\n \n\nThe aggregate fair market value of shares subject to options\ngranted to a participant(s), which are designated as incentive stock options, and which become exercisable in any calendar year, shall\nnot exceed $100,000.\n\n \n\n**Stock-based compensation expense**\n\n \n\nStock-based compensation expense is recorded in selling,\ngeneral and administrative expenses included in the statement of operations. For the fiscal years ended March 31, 2026 and 2025, stock-based\ncompensation expense was $265,200 and $266,600, respectively.\n\n \n\nAs of March 31, 2026, there was no unrecognized compensation\nexpense related to unamortized stock options.\n\n \n\n**Stock option activity**\n\n \n\nThe following table provides the stock option activity:\n\n \n\n   Shares   Weighted\nAvg.\nExercise\nPrice   Remaining\nContractual\nTerm (Years)   Aggregate\nIntrinsic\nValue\n(in thousands) \n\nBalance as of March 31, 2025   564,217   $12.78    4.85   $335 \n\nGranted   60,000    8.28           \n\nExercised   (122,217)   6.21           \n\nForfeited or Expired   (47,000)   6.00           \n\nBalance as of March 31, 2026   455,000   $14.65    5.25   $2,203 \n\nExercisable as of March 31, 2026   455,000   $14.65    5.25   $2,203 \n\n \n\nThe weighted average grant date fair value per share was\n$4.42 and $3.81 for the fiscal years ended March 31, 2026 and 2025, respectively.\n\n \n\nThe aggregate intrinsic value in the table above represents\nthe total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the\nperiod and the exercise price, times the number of shares) that would have been received by the option holders had all option holders\nexercised their in-the-money options on those dates.\n\n \n\n F-19 \n\n \n\n  \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 11**\n**CASH BONUS PLAN:**\n\n** **\n\nIn 1987, the Company adopted a cash bonus plan (the “Cash\nBonus Plan”) for non-union, management and administration staff. Unless otherwise approved by the Company’s Compensation Committee\nof the Board of Directors, contributions to the Cash Bonus Plan will only be funded by the Company for payment of bonuses with respect\nto any fiscal year, when the Company is profitable for such fiscal year. Bonus expense recorded for each of the years ended March 31,\n2026 and 2025 was $398,975 and $386,570, respectively. As of March 31, 2026 and 2025, the Company’s accrued bonus was $338,266 and\n$330,000, respectively. The Company paid the bonus amounts accrued as of March 31, 2026 and 2025 during June 2026 and June 2025, respectively.\n\n \n\n**Note 12**\n**COMMITMENTS AND CONTINGENCIES:**\n\n \n\nThe Company maintains its operations in facilities located\nin both New York and Pennsylvania.\n\n \n\nOn December 1, 2020, the Company entered into a 120-month\nextension of its lease agreement for an industrial building in Brooklyn, New York, expiring December 1, 2030. Monthly rent at inception\nwas $20,400, which escalates annually to a monthly rent of $28,426 for the final year of the lease term. The Company maintains a security\ndeposit of $40,800, which is included in Security deposit on the accompanying balance sheet.\n\n \n\nOn January 29, 2021, the Company entered into an 87-month\nlease agreement for an industrial building in Allentown, Pennsylvania, expiring March 30, 2028. Monthly rent at inception was $18,046,\nwhich escalates annually to a monthly rent of $20,920 for the final year of the lease term. The Company maintains a security deposit of\n$35,040, which is included in Security deposit on the accompanying balance sheet.\n\n \n\nThe Company has a collective bargaining multi-employer pension\nplan (“Multi-Employer Plan”) with the United Auto Workers of America, Local 259 (ID No. 136115077). The Multi-Employer Plan\nis covered by a collective bargaining agreement with the Company, which expires on March 31, 2027.\n\n \n\nContributions are made in accordance with a negotiated labor\ncontract and are based on the number of covered employees employed per month. With the passage of the Multi-Employer Pension Plan Amendments\nAct of 1990 (the “1990 Act”), the Company may become subject to liabilities in excess of contributions made under the collective\nbargaining agreement. Generally, these liabilities are contingent upon the termination, withdrawal, or partial withdrawal from the Multi-Employer\nPlan. The risks of participating in a multiemployer plan are different from single-employer plans, for example, assets contributed to\nthe multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, if a participating\nemployer stops contributing to the multiemployer plan, the unfunded obligations of the plan may become the obligation of the remaining\nparticipating employers, and if a participating employer chooses to stop participating in these multiemployer plans, the employer may\nbe required to pay those plans an amount based on the underfunded status of the plan.\n\n \n\nBased upon the Multi-Employer Plan’s consulting actuary,\nas of January 1, 2025, the UAW Local 259 Pension Plan was greater than 100% funded for purposes of the Annual Certification of Plan Status\nunder IRC Section 432. The total contributions charged to operations under the provisions of the Multi-Employer Plan were $28,583 and\n$34,179 for the fiscal years ended March 31, 2026 and 2025, respectively. The Company has not taken any action to terminate, withdraw\nor partially withdraw from the Multi-Employer Plan nor does it intend to do so in the future.\n\n \n\nThe Company maintains a defined contribution benefit plan\nunder section 401(k) of the Internal Revenue Code covering substantially all qualified employees of the Company, or the 401(k) Plan. Eligible\nemployees are able to make contributions under the under the 401(k) Plan. The Company does not provide matching contributions.\n\n \n\n F-20 \n\n \n\n \n\n**IEH CORPORATION\nNotes to Financial Statements**\n\n \n\n**Note 13**\n**CONCENTRATIONS:**\n\n \n\nDuring the fiscal year ended March 31, 2026, two customers\naccounted for 34.0% of the Company’s net sales, each represented 23.5% and 10.5%, respectively.\n\n \n\nDuring the fiscal year ended March 31, 2025, two customers\naccounted for 31.9% of the Company’s net sales, each represented 17.8% and 14.1%, respectively.\n\n \n\nAs of March 31, 2026, one customer accounted for 19.7% of\nthe Company’s accounts receivable.\n\n \n\nAs of March 31, 2025, one customer accounted for 12.0% of\nthe Company’s accounts receivable.\n\n \n\nDuring the fiscal year ended March 31, 2026, two vendors\naccounted for 28.5% of the Company’s purchases, each represented 17.8% and 10.7%, respectively.\n\n \n\nDuring the fiscal year ended March 31, 2025 three vendors\naccounted for 34.0% of the Company’s purchases, each represented 11.7%, 11.2%, and 11.1%, respectively.\n\n \n\nAs of March 31, 2026, three vendors accounted for 43.0% of\nthe Company’s accounts payable, each represented 17.6%, 14.8%, and 10.6%, respectively.\n\n \n\nAs of March 31, 2025, one vendor accounted for 12.0% of\nthe Company’s accounts payable.\n\n \n\n F-21 \n\n ** **\n\nNONE\n\nhttp://fasb.org/srt/2026#ChiefExecutiveOfficerMember\n1\nhttp://fasb.org/us-gaap/2026#OperatingLeaseRightOfUseAsset\nhttp://fasb.org/us-gaap/2026#OperatingLeaseRightOfUseAsset\nhttp://fasb.org/us-gaap/2026#OperatingLeaseLiabilityCurrent\nhttp://fasb.org/us-gaap/2026#OperatingLeaseLiabilityCurrent\nhttp://fasb.org/us-gaap/2026#OperatingLeaseLiabilityNoncurrent\nhttp://fasb.org/us-gaap/2026#OperatingLeaseLiabilityNoncurrent\n\n0000050292\nfalse\nFY\n\n0000050292\n\n2025-04-01\n2026-03-31\n\n0000050292\n\n2025-09-30\n\n0000050292\n\n2026-06-12\n\n0000050292\n\n2026-03-31\n\n0000050292\n\n2025-03-31\n\n0000050292\n\n2024-04-01\n2025-03-31\n\n0000050292\n\nus-gaap:CommonStockMember\n\n2024-03-31\n\n0000050292\n\nus-gaap:AdditionalPaidInCapitalMember\n\n2024-03-31\n\n0000050292\n\nus-gaap:RetainedEarningsMember\n\n2024-03-31\n\n0000050292\n\n2024-03-31\n\n0000050292\n\nus-gaap:CommonStockMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\nus-gaap:AdditionalPaidInCapitalMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\nus-gaap:RetainedEarningsMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\nus-gaap:CommonStockMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:AdditionalPaidInCapitalMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:RetainedEarningsMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:CommonStockMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:AdditionalPaidInCapitalMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:RetainedEarningsMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:CommonStockMember\n\n2026-03-31\n\n0000050292\n\nus-gaap:AdditionalPaidInCapitalMember\n\n2026-03-31\n\n0000050292\n\nus-gaap:RetainedEarningsMember\n\n2026-03-31\n\n0000050292\n\n2026-01-01\n2026-03-31\n\n0000050292\n\nsrt:MinimumMember\n\n2026-03-31\n\n0000050292\n\nsrt:MaximumMember\n\n2026-03-31\n\n0000050292\n\ncountry:US\n\n2025-04-01\n2026-03-31\n\n0000050292\n\ncountry:US\n\n2024-04-01\n2025-03-31\n\n0000050292\n\nus-gaap:NonUsMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:NonUsMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:DefenseMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:DefenseMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:CommercialAerospaceMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:CommercialAerospaceMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:SpaceMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:SpaceMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:OtherMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:OtherMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\nus-gaap:ComputerEquipmentMember\n\n2026-03-31\n\n0000050292\n\nus-gaap:ComputerEquipmentMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:LeaseholdImprovementsMember\n\n2026-03-31\n\n0000050292\n\nus-gaap:LeaseholdImprovementsMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:MachineryAndEquipmentMember\n\n2026-03-31\n\n0000050292\n\nus-gaap:MachineryAndEquipmentMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:ToolsDiesAndMoldsMember\n\n2026-03-31\n\n0000050292\n\nus-gaap:ToolsDiesAndMoldsMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:FurnitureAndFixturesMember\n\n2026-03-31\n\n0000050292\n\nus-gaap:FurnitureAndFixturesMember\n\n2025-03-31\n\n0000050292\n\niehc:WebsiteDevelopmentCostMember\n\n2026-03-31\n\n0000050292\n\niehc:WebsiteDevelopmentCostMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:RevolvingCreditFacilityMember\n\n2025-08-26\n\n0000050292\n\nus-gaap:RevolvingCreditFacilityMember\n\n2025-08-26\n2025-08-26\n\n0000050292\n\nus-gaap:RevolvingCreditFacilityMember\niehc:JPMorganChaseBankNAMember\n\n2025-08-26\n2025-08-26\n\n0000050292\n\nus-gaap:RevolvingCreditFacilityMember\n\n2026-03-31\n\n0000050292\n\niehc:EquipmentFinancingLineOfCreditMember\n\n2025-09-08\n\n0000050292\n\niehc:EquipmentFinancingLineOfCreditMember\n\n2025-09-08\n2025-09-08\n\n0000050292\n\niehc:EquipmentFinancingLineOfCreditMember\n\n2026-03-31\n\n0000050292\n\niehc:FederalAndStateJurisdictionMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\n2023-04-01\n2024-03-31\n\n0000050292\n\niehc:FederalAndStateJurisdictionMember\n\n2026-03-31\n\n0000050292\n\niehc:TwoZeroOneOneEquityIncentivePlanMember\n\n2011-08-31\n2011-08-31\n\n0000050292\n\niehc:TwoZeroTwoZeroEquityIncentivePlanMember\n\n2020-12-16\n2020-12-16\n\n0000050292\n\nus-gaap:StockOptionMember\n\n2025-03-31\n\n0000050292\n\nus-gaap:StockOptionMember\n\n2025-04-01\n2025-04-01\n\n0000050292\n\nus-gaap:StockOptionMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:StockOptionMember\n\n2026-03-31\n\n0000050292\n\nsrt:ScenarioForecastMember\n\n2030-12-01\n2030-12-01\n\n0000050292\n\n2020-12-01\n2020-12-01\n\n0000050292\n\nsrt:ScenarioForecastMember\n\n2030-12-01\n\n0000050292\n\n2020-12-01\n\n0000050292\n\nsrt:ScenarioForecastMember\n\n2028-03-30\n2028-03-30\n\n0000050292\n\n2021-01-29\n2021-01-29\n\n0000050292\n\nsrt:ScenarioForecastMember\n\n2028-03-30\n\n0000050292\n\n2021-01-29\n\n0000050292\n\niehc:CustomersMember\nus-gaap:SalesRevenueNetMember\nus-gaap:CustomerConcentrationRiskMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:CustomerOneMember\nus-gaap:SalesRevenueNetMember\nus-gaap:CustomerConcentrationRiskMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:CustomersTwoMember\nus-gaap:SalesRevenueNetMember\nus-gaap:CustomerConcentrationRiskMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:CustomersMember\nus-gaap:SalesRevenueNetMember\nus-gaap:CustomerConcentrationRiskMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:CustomerOneMember\nus-gaap:SalesRevenueNetMember\nus-gaap:CustomerConcentrationRiskMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:CustomersTwoMember\nus-gaap:SalesRevenueNetMember\nus-gaap:CustomerConcentrationRiskMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:CustomerOneMember\nus-gaap:AccountsReceivableMember\nus-gaap:CustomerConcentrationRiskMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:CustomerOneMember\nus-gaap:AccountsReceivableMember\nus-gaap:CustomerConcentrationRiskMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:PurchaseBenchmarkMember\niehc:VendorConcentrationRiskMember\niehc:VendorsMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:PurchaseBenchmarkMember\niehc:VendorConcentrationRiskMember\niehc:VendorsOneMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:PurchaseBenchmarkMember\niehc:VendorConcentrationRiskMember\niehc:VendorsTwoMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\niehc:PurchaseBenchmarkMember\niehc:VendorConcentrationRiskMember\niehc:VendorsMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:PurchaseBenchmarkMember\niehc:VendorConcentrationRiskMember\niehc:VendorsOneMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:PurchaseBenchmarkMember\niehc:VendorConcentrationRiskMember\niehc:VendorsTwoMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\niehc:PurchaseBenchmarkMember\niehc:VendorConcentrationRiskMember\niehc:VendorsThreeMember\n\n2024-04-01\n2025-03-31\n\n0000050292\n\nus-gaap:AccountsPayableMember\niehc:VendorConcentrationRiskMember\niehc:VendorsMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:AccountsPayableMember\niehc:VendorConcentrationRiskMember\niehc:VendorsOneMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:AccountsPayableMember\niehc:VendorConcentrationRiskMember\niehc:VendorsTwoMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:AccountsPayableMember\niehc:VendorConcentrationRiskMember\niehc:VendorsThreeMember\n\n2025-04-01\n2026-03-31\n\n0000050292\n\nus-gaap:AccountsPayableMember\niehc:VendorConcentrationRiskMember\niehc:VendorsOneMember\n\n2024-04-01\n2025-03-31\n\niso4217:USD\n\nxbrli:shares\n\niso4217:USD\n\nxbrli:shares\n\nxbrli:pure"}