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, 2026 and 2025, approximately
63.2% and 65.7%, respectively, of the Company’s sales were for defense applications, 25.2% and 19.9%, respectively, for commercial
aerospace, and 11.6% and 14.4%, 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, 2026, two customers accounted
for 34.0% of the Company’s net revenues, each represented 23.5% and 10.5%, respectively. 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.

The Company currently employs 17 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 75% of the Company’s net sales for the fiscal year ended March 31, 2026 (with the balance
of Company net sales being generated via direct customer contact).

International sales accounted for approximately 5.8% and
5.7% of net sales for the fiscal years ended March 31, 2026 and 2025, respectively.

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 to twenty-four weeks. Our backlog consists of supply arrangements
where the anticipated unfulfilled shipping dates are generally 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 $27,782,000 at March 31, 2026 as compared to $12,445,000 at March 31, 2025. The
increase in total backlog as of March 31, 2026 compared with the previous year is primarily due to increases in defense orders primarily
driven by geopolitical conditions around the globe and continued recovery of the commercial aerospace industry as prior production, labor
and regulatory issues related to a major airplane producer have been resolved.

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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 and evaluate the evolving situation around imposition of tariffs by
the current administration and subsequent Supreme Court ruling(s) against tariff imposition and the resulting 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 ensure 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
2027 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 2027 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, 2026, we employed 176 people of which 174
are full-time employees. Around half 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.