OTC: IEHC

We are a family managed business, as Louis’
great-grandson, Mr. David Offerman, 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 fast-paced customers, and we are steadfast about always exceeding our customers’ expectations.

IEH serves customers in the United States
and internationally. Our customers include defense contractors, commercial aerospace equipment manufacturers, medical device manufacturers,
oil and gas exploration firms, and commercial space launch companies. We sell both directly and through distributors. We maintain
a Military Specification QPL (Qualified Product Listing), and an ISO (International Standards Organization) 9001:2015 Certification.

For the fiscal years ended March 31, 2025
and 2024, approximately 65.7% and 60.6%, respectively, of the Company’s sales were for defense applications, 19.9% and 27.3%, respectively,
for commercial aerospace, and 14.4% and 12.1%, respectively, for commercial space launch, medical, oil and gas and industrial markets.

New Product Development:

IEH continues to expand the scope and
range of its PCB 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 specialize in custom interconnects designed specifically for customer applications. Our engineers work in conjunction
with customer engineers to create, refine and manufacture connectors 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
solutions.

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Marketing and Sales:

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
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 Original Equipment
Manufacturers (“OEM”) directly and through authorized representatives and distributors serving primarily the defense, aerospace,
medical, space, oil and gas, 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. During the year ended March 31, 2025, two customers
accounted for 31.9% of the Company’s net revenues, each represented 17.8% and 14.1%, respectively. During the year ended March
31, 2024, two customers accounted for 29.9% of the Company’s net revenues, each represented 17.5% and 12.4%, respectively.

The Company currently employs 21 independent
sales representatives and distributors to market its products in all regions in the United States as well as in Canada, the European
Union, Southeast Asia, Central Asia and the Middle East. These 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 73% of the Company’s net sales for the fiscal year ended March
31, 2025 (with the balance of Company net sales being generated via direct customer contact).

International sales accounted for approximately 5.7% and
8.5% of net sales for the fiscal years ended March 31, 2025 and 2024, respectively. Approximately 8.0% and 19.4% of the aforementioned
international net sales for fiscal years ended March 31, 2025 and 2024, 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 Requirements:

Our 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, our backlog as of any particular date may not be indicative of revenue in any future
period. The backlog amounted to approximately $12,445,000 at March 31, 2025 as compared to $18,285,600 at March 31, 2024. The decrease
in total backlog as of March 31, 2025 compared with the previous year is primarily due to decreases in defense orders as the Company
awaits several key customer contracts to be executed and due to sluggish recovery in commercial aerospace as the industry navigates through
production, labor and regulatory issues related to a major airplane producer.

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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 these orders.

Forward-Looking Business Trends:

Our operations are subject to global economic
and geopolitical risks. For example, the ongoing and evolving conflicts in Eastern Europe and the Middle East have 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. The company also continues to monitor the evolving situation around imposition of
tariffs by the current administration and evaluate its impact on sourcing of raw materials and revenue generated from global markets.

For additional information on risk factors that could impact our results,
please refer to “Risk Factors” in Part I, Item 1A of this Annual Report on 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
applications. The Company competes by adapting certain technologies to meet specific product applications, aiming 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 catalog
specifications.

Some 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 Parts:

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, both
locally or globally.

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 and impacted, by geopolitical and economic conditions, there can be no assurance
that we will not be affected in the future, and we believe that raw materials and supply chains may continue to be affected in fiscal
year 2026 and beyond in part due to global uncertainty.

Additionally, continuing 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 2026 results.

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Human Capital Management:

Our employees are our greatest resource
and an integral component to our operations. Their health, safety and well-being are 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, 2025, we employed 164
people of which 163 are full-time employees. Most of the employees engaged in manufacturing and testing activities are covered by a collective
bargaining agreement with the United Auto Workers of America, Local 259 (the “Union”), which expires on March 31, 2027.

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 Regulations:

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

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 DLA Qualified Products Listing (“QPL”). To remain qualified, the Company submits
its products to an outside testing laboratory approved by DLA which performs all required testing. After review by the Company of the
testing results, the data is then submitted to DLA. The Company and its products are only approved and remain on the QPL if the Company
has passed all testing requirements. Although DLA 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 governmental regulations which are expected to materially affect the Company’s business.

The Company is also subject to various
laws and governmental regulations concerning environmental matters. Compliance with these federal, state, and local laws and regulations
related to protection of the environment has had no material effect on our business.

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Available Information

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 soon as reasonably practicable after we electronically file such material with, or
furnish them to, the SEC. The information contained on our website is not a part of this Annual Report on Form 10-K and not incorporated
by reference herein.