U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X]  Annual report under Section 13 or 15(d) of the Securities Exchange Act of
     1934 (Fee required)

For the fiscal year ended March 31, 2000
                          --------------

[_]  Transition report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 (No fee required)

          For the transition period from ____________ to ______________


                        Commission file number   0-5278
                                                 -------

                                 IEH CORPORATION
                                -----------------
                 (Name of Small Business Issuer in Its Charter)


           New York                                    13-5549348
------------------------------                --------------------------
(State or Other Jurisdiction of                   (I.R.S. Employer
Incorporation or Organization)                   Identification No.)


140 58th Street, Suite 8E, Brooklyn, New York              11220
---------------------------------------------      ----------------------
(Address of Principal Executive Offices)                 (Zip Code)


                                 (718) 492-9673
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:


                                         Name of Each Exchange on Which
    Title of Each Class                            Registered
    -------------------                            ----------

          None                                        None
-----------------------------             ----------------------------
          None                                        None
-----------------------------             ----------------------------

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

                          Common Stock, $.50 Par Value
--------------------------------------------------------------------------------
                                (Title of Class)


--------------------------------------------------------------------------------


                                        1
<PAGE>

     Indicated by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports),and (2) has been subject to such filing requirements for
past 90 days.

                       Yes    X                  No
                           -------                 --------

     Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

     The Registrant's revenues for its most recent fiscal year ended March 31,
2000 were $4,486,573.

     On June 20, 2000, the aggregate market value of the voting stock of
Registrant held by non-affiliates of Registrant (consisting of Common Stock,
$.50 par value) computed by reference to the closing bid price at which the
stock was sold on such date ($.2500) was approximately $258,546.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

     On June 20, 2000, there were 2,303,468 shares of Common Stock, $.50 par
value, issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         None.

                                        2
<PAGE>

                                 IEH CORPORATION

                                     PART I

Item I.   Business

          IEH Corporation (hereinafter referred to as the "Company") was
          organized under the laws of the State of New York on March 22, 1943
          under the name Industrial Heat Treating Company, Inc. On March 15,
          1989, the Company changed its name to its current name. The Company's
          executive offices and manufacturing facilities are located at 140 58th
          Street, Suite 8E, Brooklyn, New York 11220. The Company's telephone
          number is (718) 492-9673; its email address is ieh@iehcorp.com.

          The Industry in Which the Company is Engaged

          The Company is engaged in the design, development, manufacture and
          distribution of high performance electronic printed circuit connectors
          and specialized interconnection devices. Electronic connectors and
          interconnection devices are used to provide connections between
          electronic component assemblies. The Company develops and manufactures
          connectors which are designed for a variety of high technological and
          high performance applications. These connectors are primarily utilized
          by those users who require highly efficient and dense (the space
          between connection pins within the connector) electrical connections.

          Printed circuit boards in computers contain the components necessary
          to perform specific system sub-functions. These functions require
          connections which relay information between electronic components and
          circuit boards, enabling the commands that are input by the user to be
          performed. Electronic connectors, in essence, enable circuit boards
          and electronic components to communicate with each other, via direct
          electrical connection. Connectors also are fundamental to modular
          construction of electronic assemblies enabling the disconnection and
          removal of circuit boards and other electronic components for testing,
          repair, and replacement.

          Connectors may be designed and manufactured in various shapes, sizes
          and specifications to meet specific customer requirements and
          applications. High performance connectors are designed to meet various
          density and pin count (the number of individual connection points
          within each connector) criteria and to provide low forces (the amount
          of pressure needed to make the connection) and electrically efficient
          connections.

          Constant advances in the design of solid state devices have resulted
          in significantly denser component packaging configurations on circuit
          boards. Historically, a 5" X 8" circuit board may have consisted of
          thousands of circuits with 10 to 30 lines of communication. Under
          those conditions, an insertion force of one pound per contact for each
          of the communication lines formed a common and acceptable standard in
          connection devices. As a result of technological developments in
          recent years, the same 5" X 8" circuit board may contain hundreds of
          thousands of circuits with hundreds of communication lines, and an
          insertion force of one (1) ounce per contact as the standard in the
          industry.

          The Company's Product Line

          The Company primarily manufactures printed circuit board connectors
          that meet military or individual customer specifications. Certain of
          the Company's manufacturing and sales involve the competitive bidding
          process because of the military and/or government status of customers.
          The Company also manufactures a line of standard universal connectors
          which have common usage in the high technology and commercial
          electronics industries. The Company serves both the commercial and
          military marketplace, manufacturing connectors for avionics,
          electronics, satellite, radar systems, test equipment, medical
          electronic and related industries.


                                        3
<PAGE>

                                 IEH CORPORATION

Item I -  The Business (continued)

          The Company's Product Line (continued)

          The Company is continuously redesigning and adapting its connectors to
          keep pace with developments in the electronics industry, and has, for
          example, developed connectors for use with flex-circuits which are
          used in aerospace programs, computers, air-borne communication
          systems, testing systems and other areas. The Company also provides
          engineering services to its customers to assist in the development and
          design of connectors to meet specific product requirements.

          The Company's electronic printed circuit connectors are sold to
          original equipment manufacturers and distributors. The Company
          supplies its connectors to manufacturers who principally produce and
          distribute finished products as well as to distributors who resell the
          Company's products. Prior to the decrease in military and government
          spending over the last five (5) years, the Company's sales were made
          primarily to the government, military defense contractors and
          aerospace companies. However, since the decrease in military and
          government spending, the Company has modified its product line so as
          to concentrate its sales efforts to commercial electronics companies.
          The Company still continues to market its connectors for use in
          government and military computers; military defense equipment and
          information systems; terrestrial, airborne and aerospace
          communications products; avionics and guidance systems and
          instrumental and electronic testing equipment.

          With the continuing downturn in government contracts over the last few
          years, the Company has been striving the past several years to develop
          commercial accounts.

          Management has instituted several steps to increase productivity and
          increase sales such as downsizing the labor force, implementing
          material changes to make the Company's products more competitive and
          developing machinery and equipment to increase production rates.
          Management believes these initiatives have decreased costs and will
          continue to do so in the near future.

          For the fiscal year ended March 31, 2000, the Company's principal
          customers included manufacturers of commercial electronics products,
          military defense contractors and distributors who service these
          markets. Sales to the commercial electronics and military defense
          markets comprised 25% and 74%, respectively, of the Company's net
          sales for the year ended March 31, 2000. Approximately 1% of the
          Company's net sales for the year March 31, 2000, were made
          internationally.

          New Product Development

          The Company maintains a program to increase the efficiency and
          performance of its connectors to meet anticipated and specific market
          needs. Computer and electronics technology is continuously changing
          and requires the redesign and development of connectors to adapt to
          these changes. Primarily, new technology has dictated a decrease in
          the size of solid state electronic components and smaller and denser
          high performance connectors. Management believes that a key ingredient
          to the Company's success is its ability to assist customers with a new
          design effort and prepare necessary drawing packages in a short period
          of time. After the customer approves the design, prototypes are built,
          approved by the customer and production is released. As an example,
          six new connectors have been introduced to a major commercial account.
          The Company's design effort on this product line began mid-year 1994
          and was recently completed. The new development process with this
          commercial client has led to substantial repeat business in the past
          fiscal year. The Company now has the ability to introduce this line to
          other commercial accounts.

          The Company has also recently commenced production of two new
          connectors for the aerospace industry.


                                        4
<PAGE>

                                 IEH CORPORATION

Item I -  The Business (continued)

          New Product Development (continued)

          To date early orders for pre-production units have been completed and
          the Company is awaiting commencement of production. One of the
          nation's leading radar system manufacturers has contracted with the
          Company for six new designs. The design work is complete, approvals
          have been obtained, and the Company is now in small-scale production.
          The Company anticipates full-scale production when the radar system is
          released for sale by the customer.

          Several years ago, the Company designed and developed a form of
          compliant termination connector, which is named, "COMTAC". This
          product, which utilizes technology known as "Solderless Pin
          Technology", does not require the soldering of connector pins, but
          instead utilizes a spring type locking system in attaching the
          connector to the printed circuit board. This technology was patented
          in the United States under patent No. 4,720,268 and assigned to the
          Company on January 19, 1988. During the fiscal year ended March 31,
          2000, sales of the COMTAC connectors accounted for over 10% of the
          Company's total sales. The Company has sent pre-production units for
          evaluation to certain customers and potential customers. Although
          there can be no assurance of future sales, the Company is optimistic
          that this new technology will lead to an increase in sales.

          Commitments

          On July 22, 1992, the Company obtained a loan of $435,000 from the New
          York Urban Development Corporation ("NYUDC"), collateralized by
          machinery and equipment. The loan is payable over ten years, with
          interest rates progressively increasing from 4% to 8% per annum.

          The balance remaining at March 31, 2000 was $135,057.

          Aggregate future principal payments are as follows:

                Fiscal Year Ending March:
                2001                               $53,929
                2002                                58,405
                2003                                22,723
                                                    ------
                                                  $135,057

          In April 1997, the Company was informed by the NYUDC that the loan was
          sold and conveyed to WAMCO XXIV, Ltd. All of the terms and conditions
          of the loan remained in effect.

          As of March 31, 2000, the Company had failed to meet one of the
          financial covenants of the loan agreement; namely that the "Company
          shall be obligated to maintain a tangible net worth of not less than
          $1,300,000 and the Company shall be obligated to maintain a ratio of
          current assets to current liabilities of 1.1 to 1.0.

          The Company reported tangible net worth of $546,046. The ratio of
          current assets to current liabilities was .94 to1.0.

          The Company has applied for additional waivers of this covenant.
          Neither the NYUDC or WAMCO XXIV, LTD. has acted on these requests.
          There are no assurances that the Company will receive any additional
          waivers of this covenant. Should the Company not receive any
          additional waivers, then it will be deemed to be in default of this
          loan obligation and the loan plus interest will become due and
          payable.


                                        5
<PAGE>

                                 IEH CORPORATION

Item I -  Business (continued)

          Commitments (continued)

          The Company has a collective bargaining multi-employer pension plan
          with the United Auto Workers of America, Local 259. Contributions are
          made in accordance with a negotiated labor contract and are based on
          the number of covered employees employed per month. With the passage
          of the Multi- Employer Pension Plan Amendments Act of 1990 ("The
          Act"), the Company may become subject to liabilities in excess of
          contributions made under the collective bargaining agreement.
          Generally, these liabilities are contingent upon the termination,
          withdrawal, or partial withdrawal from the Plan. The Company has not
          taken any action to terminate, withdraw or partially withdraw from the
          Plan nor does it intend to do so in the future. Under the Act,
          liabilities would be based upon the Company's proportional share of
          the Plan's unfunded vested benefits which is currently not available.
          The amount of accumulated benefits and net assets of such Plan also is
          not currently available to the Company. The total contributions
          charged to operations under this pension plan were $32,120 for the
          year ended March 31, 2000 and $35,640 for the year ended April 2,
          1999.

          As of March 31, 2000, the Company reported arrears with respect to its
          contributions to the Union's health and welfare plan. The amount due
          the health and welfare plan was $132,689.

          The total amount due of $132,689 is reported on the accompanying
          balance sheet in two components; $96,000 reported as a current
          liability and $36,689 as a long-term liability.

          In December 1993, the Company and Local 259 entered into a verbal
          agreement whereby the Company would satisfy this debt by the following
          payment schedule:

          The sum of $8,000 will be paid by the Company each month in
          satisfaction of the current arrears until this total debt has been
          paid. Under this agreement, the projected payment schedule for arrears
          will satisfy the total debt in 20 months. Additionally, both parties
          have agreed that current obligatory funding for the Pension Plan will
          be made on a timely current basis.

          On June 30, 1995, the Company applied to the Pension Benefit Guaranty
          Corporation ("PBGC") to have the PBGC assume all of the Company's
          responsibilities and liabilities under its Salaried Pension Plan. On
          April 26, 1996, the PBGC determined that the Salaried Pension Plan did
          not have sufficient assets available to pay benefits which were and
          are currently due under the terms of the Plan.

          The PBGC further determined that pursuant to the provisions of the
          Employment Retirement Income Security Act of 1974, as amended
          ("ERISA") that the Plan must be terminated in order to protect the
          interests of the Plan's participants. Accordingly, the PBGC proceeded
          pursuant to ERISA to have the Plan terminated and the PBGC appointed
          as statutory trustee, and to have July 31, 1995 established as the
          Plan's termination date.

          At March 31, 2000 and April 2, 1999, $65,489 of the pension liability
          is included in other current liabilities, with the balance of $516,966
          shown as a long-term liability.

          On those dates, the long-term portion includes $226,041, which
          represents the recognition of the additional minimum liability to
          comply with the requirements of Statement of Financial Accounting
          Standards No. 87.

                                        6
<PAGE>
                                 IEH CORPORATION

Item I -  Business (continued)

          Commitments (continued)

          In August 1998, the Company was notified by the PBGC that the Company
          is liable to the PBGC for the following amounts as of September 1,
          1998:

          $ 456,418 representing the amount of unfunded benefit liabilities of
          the Plan
          $ 242,097 representing funding liability
          $ 2,230 representing the premium liability

          The total amount claimed by the PBGC amounts to $700,745. The Company
          paid the premium liability of $2,230.00, thereby reducing the total
          liability to $698,515 as of March 31, 2000.

          The amount claimed is being contested by the Company, and the PBGC
          granted the Company an extension of time until February 22, 1999 in
          which to file an appeal. The Company did file an appeal and is
          presently awaiting a response from the PBGC.

          Marketing and Sales

          The market for connectors and interconnection 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. For example, connectors include: printed circuit,
          rectangular I/O, circular, planar (IOC) RF coax, IC socket and fiber
          optic. The Company has been servicing a niche in the market by
          manufacturing HYPERTAC (TM) connectors and innovative Company-designed
          printed circuit connectors such as the COMTAC connectors. Previously,
          the Company was one of only three licensed manufacturers of the
          HYPERTAC (TM) design in the United States. In the fiscal year 1996,
          the Company learned that the other two licensees had merged. Moreover,
          the Company, based upon advice of counsel, determined that the
          HYPERTAC technology was no longer protected by a patent, and therefore
          was in the public domain. As a result, the Company notified the
          licensor that it would no longer be bound by the terms of its license
          agreement and the Company ceased making license payments. See
          Financial Statements and Notes thereto. The Company has received a
          brief notice from the licensor that it disputed the Company's
          interpretations and demanded return of certain equipment. No legal
          proceedings have been instituted by the licensor and the Company has
          not received any further notices. The Company does not anticipate
          manufacturing other types of connectors in the immediate future. 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's products are marketed to original equipment
          manufacturers directly and through distributors serving primarily the
          government, military, aerospace and commercial electronics markets.
          The Company is also involved in developing new connectors for specific
          uses which result from changes in technology. This includes the COMTAC
          connectors. 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.

                                        7
<PAGE>

                                 IEH CORPORATION

ITEM I -  Business (continued)

          Marketing and Sales (continued)

          The Company is primarily a manufacturer and its products are
          essentially basic components of larger assemblies of finished goods.
          Approximately 95% of the Company's net sales for the years ended March
          31, 2000 and April 2, 1999, respectively, were made directly to
          manufacturers of finished products with the balance of the Company's
          products sold to distributors.

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

          Two (2) of the Company's customers accounted for 32% and 38% of the
          Company's net sales for the years ended March 31, 2000 and April 2,
          1999, respectively. One of the Company's customers accounted for 25%
          and 31% of the Company's sales for the years ended March 31, 2000 and
          April 2, 1999 respectively.

          The Company currently employs 16 independent sales representatives to
          market its products in all regions in the United States. These
          independent sales representatives also promote the product lines of
          other electronics manufacturers; however, they do not promote the
          product lines of competitors which compete directly with the Company's
          products. These sales representatives accounted for approximately 94%
          of Company sales (with the balance of Company sales being generated
          via direct customer contact) for the year ended March 31, 2000.

          International sales accounted for less than 1% of sales for the years
          ended March 31, 2000 and April 2, 1999.

          Backlog of Orders/Capital Requirements

          The backlog of orders for the Company's products amounted to
          approximately $1,700,000 at March 31, 2000, as compared to $1,400,000
          at April 2, 1999. A significant portion of these 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 estimated funds required to manufacture the current
          backlog of orders is estimated at $660,000. The Company does not
          foresee any problems which would prevent it from fulfilling its
          orders.

          Competition

          The design, development, manufacture and distribution of electrical
          connectors and interconnection devices is a highly competitive field.
          The Company principally competes with companies who produce high
          performance connectors in printed circuits and wireboards for high
          technology application. The Company competes with respect to their
          abilities to adapt certain technologies to meet specific product
          applications; in producing connectors cost-effectively; and in
          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.

                                        8
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                                 IEH CORPORATION

Item I -  Business (continued)

          The Company also offers engineering services to its customers in
          designing and developing connectors for specialized products and
          specific customer applications. This enables the Company to receive a
          competitive advantage over those companies who basically manufacture
          connectors based solely or primarily on cataloged specifications. Many
          of the Company's competitors have greater financial resources, market
          penetration and experience 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 in the future. However, any delay in the Company's ability
          to obtain necessary raw materials and component parts may affect its
          ability to meet customer production needs. In anticipation of such
          delays, the Company carries an inventory of raw materials and
          component parts to avoid shortages and to insure continued production.

          Engineering/Research & Development

          The Company provides personalized engineering services to its
          customers by designing connectors for specific customer applications.
          The employment of electromechanical engineers is the anticipated
          cornerstone of the Company's future growth. The Company maintains a
          testing laboratory where its engineers experiment with new connector
          designs based on changes in technology and in an attempt to create
          innovative, more efficient connector designs.

          The Company expended $69,600 for the years ended March 31, 2000 and
          April 2, 1999, respectively, on Company sponsored research and
          development activities relating to the development of new designs,
          techniques and the improvement of existing designs. In addition, the
          Company received revenues of $96,200 for the years ended March 31,
          2000 and April 2, 1999, respectively, pursuant to customer sponsored
          research activities.

          Employees

          The Company presently employs approximately 65 people, three (3) of
          whom are executive officers; three (3) are engaged in management
          activities; four (4) provide general and administrative services and
          approximately 55 are employed in manufacturing and testing activities.
          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,
          2002. The Company believes that it has a good relationship with its
          employees and the Union.

          Patents and Licenses

          Electrical connectors and interconnection devices are usually the
          subject of standard designs; therefore, only innovations of standards
          designs or the discovery of a new form of connector are patentable.
          The Company is continuously attempting to develop new forms of
          connectors or adaptations of current connector designs in an attempt
          to increase performance and decrease per unit costs. The Company has
          developed and designed the COMTAC connector which was patented on
          January 19, 1988, at which time the patent was assigned to the
          Company.


                                        9
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                                 IEH CORPORATION

Item I -  Business (continued)

          Governmental Regulations

          The Company is subject to federal regulations under the Occupational
          Safety and Health Act ("OSHA") and the Defense Electrical Supply
          Command ("DESC"). OSHA provides federal guidelines and specifications
          to companies in order to insure the health and safety of employees.
          DESC oversees the quality and specifications of products and
          components manufactured and sold to the government and the defense
          industry. Although DESC continuously requires suppliers to meet
          changing specifications, the Company has not encountered any
          significant problems meeting such specifications and its products
          have, in the past, been approved. The Company is unaware of any
          changes in the government's regulations which are expected to
          materially affect the Company's business.

Item 2.   Properties

          On December 1, 1998 the Company amended its lease on its premises by
          surrendering a portion of its rented premises back to the landlord.
          Accordingly, the base monthly rent was reduced to $ 10,397 or $121,764
          per annum through December 1999 and to $9,397 or $112,764 per annum
          through the conclusion of the lease which ends August 23, 2001.

          The Company is obligated under this lease through August 23, 2001, at
          minimum annual rentals as follows:

                                Fiscal year
                                ending:

                                2001            $112,764
                                                ========

          The Company leases approximately 20,400 feet of space, of which it
          estimates; 6,000 square feet are used as executive, sales and
          administrative offices, 14,400 square feet are used for its
          manufacturing and plating.

          The net rental expense for the year ended March 31, 2000 for this
          lease was $118,520. In addition to the base rent, the Company pays
          real estate taxes, insurance premiums and utility charges relating to
          the use of the premises. The Company considers its present facilities
          to be adequate for its present and anticipated future needs. See
          "Legal Proceedings" for certain matters involving the Company's
          operating facility and offices.

Item 3.   Legal Proceedings

          The Company is not a party to or aware of any pending or threatened
          legal proceedings which would result in any material adverse effect on
          its operations or its financial condition.

          As previously reported, the Company reached an agreement with its
          landlord, the New York Economic Development Corporation ("NYEDC") to
          settle certain matters related to the lease of its principal offices
          located in Brooklyn, New York, including a lawsuit brought by the
          NYEDC against the Company. The lawsuit, entitled New York City
          Economic Development Corporation against IEH Corporation, had been
          commenced in the Civil Court of the City of New York, Kings County
          (Index No. L&T 88890/97).


                                       10
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                                 IEH CORPORATION

Item 3.   Legal Proceedings (continued)

          The NYEDC claimed that IEH had not paid the proper rent due under its
          lease for the period from September 1, 1992 through April 1997. The
          NYEDC claimed damages of $236,000 plus interest of approximately
          $41,000.

          The Company determined it was in its best interest to settle the
          lawsuit. The parties agreed to a settlement, effective as of May, 1997
          whereby the Company agreed to a repayment schedule for the amount due
          payable with interest at 8.25% per year. The monthly installments
          equal approximately $5,790 per month. The settlement provides for the
          entity, following notice and a cure period, of a default judgement by
          the NYEDC in the event the Company fails to pay amounts due under the
          lease and the settlement in a timely fashion.

Item 4.   Submission of Matters to Vote of Security Holders

          No matters were submitted to shareholders during the fourth quarter
          for the fiscal year ended March 31, 2000.



                                       11
<PAGE>

                                 IEH CORPORATION

                                     PART II

Item 5.   Market for Common Equity and Related Stockholder Matters

          Principal Market

          The Common Stock of the Registrant (the "Common Stock") is traded in
          the Over-The-Counter Market and is quoted on the National Association
          of Securities Dealers Automated Quotation ("NASDAQ") System Bulletin
          Board under the symbol "IEHC"). On January 11, 1993, the Company's
          Common Stock was deleted from listing on the NASDAQ SmallCap Market
          System because of the Company's failure to maintain the minimum asset
          and shareholders equity requirements. On January 12, 1993, the
          Company's Common Stock was first quoted over the Electronic Bulletin
          Board (OTCBB).

          Market Information

          The range of high and low bid prices for the Company's Common Stock,
          for the periods indicated as set forth below. For the period to
          October 29, 1991, the Company was listed on the NASDAQ National Market
          System. On October 29, 1991, the Company's Common Stock was delisted
          from the NASDAQ National Market System and from October 29, 1991 to
          January 11, 1993, the Company's Common Stock was listed on the NASDAQ
          SmallCap Market System. On January 11, 1993, the Company's Common
          Stock was delisted from the NASDAQ SmallCap Market System and on
          January 13, 1993, the Company's Common Stock was first quoted over the
          Electronic Bulletin Board (OTCBB). Set forth below is a table
          indicating the high and low bid prices of the Common Stock during the
          periods indicated.

                 Year                            High Bid         Low Bid
           -----------------------------------   --------         -------

           Fiscal Year ended March 31, 2000(1)
           1st Quarter                           $ .3125          $ .2500
           2nd Quarter                             .3438            .2500
           3rd Quarter                             .2500            .1250
           4th Quarter                             .6875            .1250

           Fiscal Year ended April 2,1999(1)
           1st Quarter                             .6875            .3281
           2nd Quarter                             .3438            .2812
           3rd Quarter                             .3125            .2812
           4th Quarter                             .2500            .2500

           (1)  As reported by the OTCBB.

          The above quotations, as reported, represent prices between dealers
          and do not include retail mark-ups, mark-downs or commissions. Such
          quotations do not necessarily represent actual transactions.

          On June 20, 2000 the high bid for the Common Stock was .25000 and the
          low bid was .15625.


                                       12
<PAGE>

                                 IEH CORPORATION

                                     PART II

Item 5.   Market for Common Equity and Related Stockholder Matters (continued)

          Dividends

          The Company has not paid any cash dividends on its Common Stock during
          the last five (5) fiscal years. At present, the Company does not
          anticipate issuing any cash dividends on its Common Stock in the
          foreseeable future by reason of its contemplated future financial
          requirements and business plans. The Company will retain earnings, to
          the extent that there are any, to finance the development of its
          business.

          Approximated Number of Equity Security Holders

          The number of record holders of the Company's Common Stock as of June
          20, 2000 was approximately 1,220. Such number of record owners was
          determined from the Company's stockholder records, and does not
          include the beneficial owners of the Company's Common Stock whose
          shares are held in the names of various security holders, dealers and
          clearing agencies.

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

          Results of Operations

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

<TABLE>
<CAPTION>
                       Relationship to Total Revenues

                                                March 31,          April 2,
                                                  2000               1999
                                             ---------------    --------------
<S>                                              <C>                <C>
Operating Revenues (in thousands)                $4,487             $4,334
                                                --------           --------
Operating Expenses:
  (as a percentage of Operating Revenues)

     Costs of Products Sold                        71.8%              74.2%
       Selling, General and Administrative         17.2%              19.5%
       Interest Expense                             3.1%               3.2%
       Depreciation and amortization                6.7%               6.3%
                                                 --------          ---------
              TOTAL COSTS AND EXPENSES             98.8%             103.2%
                                                 --------          ---------

Operating Income (loss)                             1.2%              (3.2%)

Other Income                                          0%                 0%
                                                 --------           --------

Income (loss) before Income Taxes                   1.2%              (3.2%)

Income Taxes                                        (.2%)              (.3%)
                                                 --------           --------

Net Income (loss)                                   1.0%              (3.5%)
                                                 ========           ========
</TABLE>


                                       13
<PAGE>

                                 IEH CORPORATION

                                     PART II

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results Of Operations (continued)

          Results of Operations (continued)

          Year End Results: March 31, 2000 Compared to April 2, 1999

          Operating revenues for the year ended March 31, 2000 amounted to
          $4,486,573 reflecting a 3.5% increase versus prior year 1999 revenues
          of $4,334,477. The increase in revenues is a direct result of the
          Company's continuing efforts to redirect its sales efforts to the
          commercial and international electronic markets and away from the
          governmental and military procurement sector.

          Cost of products sold amounted to $3,219,798 for the fiscal year ended
          March 31, 2000, or 71.8% of operating revenues. This reflected a
          negligible increase in the cost of products sold from $3,214,927 or
          74.2% of operating revenues for the fiscal year ended April 2, 1999.
          This marginal increase is primarily due to management's efforts to
          control manufacturing costs.

          Selling, general and administrative expenses were $772,715 and
          $847,358 or 17.2% and 19.5% of operating revenues for the fiscal years
          ended March 31, 2000 and April 2, 1999, respectively. This category of
          expense decreased 8.8% from the prior year. The decrease can be
          primarily attributed to management's continuing efforts to control
          expenses.

          Interest expense was $141,159 for the fiscal year ended March 31, 2000
          or 3.1% of operating revenues. For the fiscal year ended April 2,
          1999, interest expense was $137,766 or 3.2% of operating revenues. The
          increase of 2.5% reflects additional equipment loans obtained during
          the year.

          Depreciation and amortization of $298,558 or 6.7% of operating
          revenues was reported for the fiscal year ended March 31, 2000. This
          reflects an increase of 9.4 % from the prior year ended April 2, 1999
          of $273,029 or 6.3% of operating revenues. The increase is a result of
          additional acquisitions of new equipment and computers.

          The Company reported a net income of $43,854 for the year ended March
          31, 2000 representing basic earnings of $.019 per share as compared to
          a net loss of $152,824 or $.066 per share for the year ended April 2,
          1999. The net income increase for the current year can, in part, be
          attributed to an increase in revenues from the commercial and
          international sectors, as well as management's efforts to better
          control costs and expenses.

          Liquidity and Capital Resources

          The Company reported working capital deficit of $111,044 as of March
          31, 2000 compared to a working capital deficit of $188,877. The
          increase in working capital of $77,833 was attributable to the
          following items:

          Net income (loss)
           (excluding depreciation and amortization)               342,412
          Capital expenditures                                    (117,978)
          Other transactions                                      (146,601)



                                       14
<PAGE>

                                 IEH CORPORATION

                                     PART II

Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations (continued)

          Liquidity and Capital Resources (continued)

          As a result of the above, the current ratio (current assets to current
          liabilities) was .94 to 1 at March 31, 2000 as compared to .90 to 1 at
          April 2, 1999. Current liabilities at March 31, 2000 were $1,880,104
          compared to $1,955,702 at April 2, 1999. This increase in the current
          ratio is primarily reflective of an increase in inventory as well as a
          decrease in account receivable financed.

          The Company had $117,978 in capital expenditures in fiscal 2000
          against depreciation of $298,558 for the year ended March 31, 2000.

          The net income of $43,854 for the year ended March 31, 2000 increased
          stockholders' equity to $546,046 as compared to stockholders' equity
          of $502,192 at April 2, 1999.

          The Company has an accounts receivable financing agreement with a
          factor which bears interest at 2.5% above prime with a maximum of 12%
          per annum. At March 31, 2000 the amount outstanding was $689,775 as
          compared to $759,330 at April 2, 1999.

          As of March 31, 2000 and as of April 2, 1999, the Company failed to
          meet the tangible net worth covenant contained in its loan agreement
          with the NYUDC. The Company has not been in compliance with this ratio
          since fiscal year 1994. The Company received a waiver of this covenant
          from the NYUDC for the period ending March 31, 1994. The Company has
          requested a continued waiver from the NYUDC. To date, the NYUDC has
          not declared an event of default. The Company has been notified that
          the loan was recently sold by NYUDC to a third party. There are no
          assurances that the Company will receive any additional waivers of
          this covenant and therefore, the Company may be deemed to be in
          noncompliance with its loan obligation to the NYUDC.

          Effects of Inflation

          The Company does not view the effects of inflation to have a material
          effect upon its business.

          Increases in costs of raw materials and labor costs have been offset
          by increases in the price of the Company's products, as well as
          reductions in costs of production, reflecting management's efforts in
          this area. While the Company has in the past increased its prices to
          customers, it has maintained its relatively competitive price
          position. However, significant decreases in government, military
          subcontractor spending has provided excess production capacity in the
          industry which in turn has tightened pricing margins.

Item 7.   Financial Statements

          See Index to Financial Statements attached hereto.

Item 8.   Changes in and Disagreements with Accountants on Accounting Financial
          Disclosure.

          The Company had no disagreements with its accountants during the last
          two fiscal years.


                                       15
<PAGE>

                                 IEH CORPORATION

                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16 (a) of the Exchange Act

          The executive officers and directors of the Company are as follows:

      Name          Age                          Office
      ----          ---                          ------

Michael Offerman    59        Chairman of the Board of Directors and President

Robert Knoth        58        Secretary and Treasurer

Murray Sennet       77        Director

Allen Gottlieb      59        Director

Robert Pittman      75        Director

Joan Prideaux       67        Vice-President - Sales and Marketing

          All directors serve for a term of two years and until their successors
          are duly elected. All officers serve at the discretion of the Board of
          Directors.

          Executive Officers and Directors

          Michael Offerman has been a member of the Board of Directors since
          1973. In May, 1987, Mr. Offerman was elected President of the Company
          and has held that position since that date. Prior to his becoming
          President, Mr. Offerman served as Executive Vice-President of the
          Company.

          Robert Knoth joined the Company as Controller in January, 1990 and was
          elected treasurer of the Company in March, 1990. Mr. Knoth was elected
          as Secretary of the Company in September 1992 and Mr. Knoth has held
          these positions since said dates. From 1986 to January, 1990, Mr.
          Knoth was employed as controller by G&R Preuss, Inc., a company
          engaged in the business of manufacturing truck bodies and accessories.

          Murray Sennet has been a member of the Company's Board of Directors
          since 1970. Mr. Sennet was the Secretary and the Treasurer of the
          Company at the time of his retirement in April, 1986.

          Allen Gottlieb has been a member of the Company's Board of Directors
          since 1992. Mr. Gottlieb has been an attorney in private practice for
          over five (5) years.

          Robert Pittman has been a member of the Board of Directors since 1987.
          Mr. Pittman retired in October 1992, at which time he had held the
          position of Vice-President of Engineering and Secretary of the
          Company.


                                       16
<PAGE>

                                 IEH CORPORATION

                                    PART III


Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16 (a) of the Exchange Act

          Executive Officers and Directors (continued)

          Joan Prideaux joined the Company in July, 1995 as National Sales
          Manager. Prior to such time Ms. Prideaux was employed as an account
          executive of Viking Connectors for the previous five years.

          Now retired, Ralph Acello had been a member of the Board of Directors
          since 1988. In August, 1984, Mr. Acello was elected the Company's
          Vice-President of Production and held the position until his
          retirement in November 1999.

          Significant Employees

          Thomas Hunt is the director of Quality Control, a position he has held
          since October, 1992. Mr. Hunt joined the Company in 1987 as the
          laboratory director and senior inspector and held said positions until
          his promotion in October, 1992.

          Stephen Reich is the Director of Purchasing, a position he has held
          since July 1995. Prior to joining the Company, Mr. Reich owned and
          operated a retail business.

          Lawrence Schwartz is the Quality Control manager, a position he has
          held since July 1997. Mr. Schwartz was employed by Precision
          International a manufacturing company of automotive parts.

          Certain Reports

          Section 16(a) of the Securities Exchange Act of 1934 requires the
          Company's directors and officers and persons who own, directly or
          indirectly, more than 10% of a registered class of the Corporation's
          equity securities, to file with the Securities and Exchange Commission
          ("SEC") reports of ownership and reports of changes in ownership of
          Common Stock of the Corporation. Officers, directors and greater than
          10% shareholders are required to furnish the Company with copies of
          all Section 16(a) reports that they file. Based solely on review of
          the copies of such reports received by the Company, the Company
          believes that filing requirements applicable to officers, directors
          and 10% shareholders were complied with during the fiscal year.

Item 10.  Executive Compensation

          The following table sets forth below the summary compensation paid or
          accrued by the Corporation during the fiscal years ended March 31,
          2000, April 2, 1999, and March 27, 1998 for the Corporation's Chief
          Executive Officer:

<TABLE>
<CAPTION>
                                                                            Other Annual
Name and Principal Position              Year           Salary      Bonus   Compensation
---------------------------              ----           ------      -----   ------------
<S>                                  <C>                <C>          <C>      <C>
Michael Offerman, Chief              March 31, 2000     $77,788       -           0
Executive officer, President(1)       April 2, 1999      97,961       -           0
                                     March 27, 1998     100,000       -           0
</TABLE>

                                       17
<PAGE>

                                 IEH CORPORATION

                                    PART III

Item 10.  Executive Compensation (continued)

     (1)  During the years ended March 31, 2000, April 2, 1999 and March 27,
          1998, the Corporation provided automobile allowances to Mr. Offerman.
          This does not include the aggregate incremental cost to the
          Corporation of such automobile or automobile allowances. The
          Corporation is unable to determine without unreasonable effort and
          expense the specific amount of such benefit, however, the Corporation
          has concluded that the aggregate amounts of such personal benefit for
          Mr. Offerman does not exceed $25,000 or 10% of the compensation
          reported as total salary and bonus reported. Effective January 1,
          1995, Mr. Offerman entered into an employment agreement with the
          Company to increase his salary to $100,000 per annum. Mr. Offerman
          agreed that, not withstanding the terms of his new employment
          agreement, he was paid at the rate of $77,788 for fiscal 2000. See
          "Employment Agreements".

          No other officer of the Corporation received compensation (salary and
          bonus) in excess of $100,000 during the fiscal years ended March 31,
          2000, April 2, 1999 or March 27, 1998.

          Pension/Benefit Incentive Plan

          In 1964, the Corporation's Shareholders and Board of Directors adopted
          a contributory pension plan (the "Salaried Pension Plan") effective
          April 1, 1964, for salaried employees of the Corporation. The Salaried
          Pension Plan as revised on April 1, 1987, provides for retirement
          benefits for qualified employees upon or prior to retirement. For
          early retirement, employees are eligible to receive a portion of their
          retirement benefits, starting 10 years prior to the employees
          anticipated normal retirement age (age 65), if the employee has
          completed 15 years of service to the Corporation. The employee is
          eligible to receive reduced retirement benefits based on an actuarial
          table for a period not exceeding ten (10) years of his lifetime. In no
          event would benefits exceed $12,000 per year.

          For normal retirement at the age of sixty-five (65) the employee is
          entitled to receive full retirement benefits for a period not
          exceeding ten (10) years of his lifetime. If the employee should die
          prior to the ten-year period, his beneficiaries will continue to
          receive the full benefit for the remainder of the ten- year term. In
          no event will benefits exceed $12,000 per year.

          If payment is made on the "joint and survivor basis" as elected by the
          employee, benefits will be provided to both the employee and spouse on
          a reduced basis over the life of both the employee and his spouse. If
          the employee should die prior to the guaranteed ten year period, the
          spouse will receive the employee benefit for the remainder of the
          term, after which, the spouse will received the reduced spousal
          benefit for the life of the spouse. In no event will the benefits
          pursuant to the joint and survivor basis exceed $12,000 per year.

          In June, 1995, the Company applied to the Pension Benefit Guarantee
          Corporation for a distress termination of the Salaried Pension Plan.
          The PBGC has notified the Company that it has agreed to take over the
          Salaried Pension Plan. The PBGC has not issued its final order and may
          require that the Company enter into an agreement to make future
          payments to the PBGC.

          Under an agreement dated June 16, 1978, the Corporation entered into a
          retirement compensation agreement with Michael Offerman, which
          provides that upon reaching the age of 65, or the earlier of death,
          total disability, or employment termination by mutual consent, Michael
          Offerman or his beneficiary would be entitled to retirement payments
          of $30,000 per year for a period of five years.


                                       18
<PAGE>

                                 IEH CORPORATION

                                    PART III

Item 10.  Executive Compensation (continued)

          Employment Agreements

          In August, 1995, the Board of Directors approved the terms of an
          employment agreement with Michael Offerman, its President and Chairman
          of the Board. Effective as of January 1, 1995, the terms of he
          Employment Agreement provide that Mr. Offerman's salary will be
          $100,000 per year and that he will be employed as President of the
          Company until a term expiring on December 31, 1999. Mr. Offerman
          agreed to defer the increase in his salary from the previous year's
          rate of compensation ($86,875) until October 20, 1995 and further
          agreed to receive $92,404 in salary for the fiscal year ended April
          2,1998. As further provided under the terms of the Employment
          Agreement, the Company will provide certain benefits such as health
          benefits and the use of a full size automobile during the term. The
          Company also agreed to pay the premium for a $150,000 term life
          insurance policy payable to Mr. Offerman's beneficiary. In the event
          the Company declines to enter into a new employment agreement with Mr.
          Offerman at the expiration of his term, the Company has agreed to pay
          Mr. Offerman the sum of $75,000. Additionally, in the event there
          occurs a "change of control" of the Company, and within the one (1)
          year period thereafter Mr. Offerman's employment is terminated or he
          resigns, then Mr. Offerman will be entitled to receive a sum equal to
          the balance of his base salary for the remainder of the term plus
          $75,000. A "change of control" is defined to mean (i) a person becomes
          the holder of 30% or more of the combined voting power of the
          Company's outstanding securities, (ii) the stockholders of the Company
          approve a merger or consolidation whereby the Company's voting
          securities fail to represent, after such merger or consolidation, at
          least 50.1% of the voting securities of the surviving entity.
          Additionally, in the event the Company relocates outside of the New
          York City Metropolitan area, it has agreed to pay Mr. Offerman the sum
          of $75,000. The Employment Agreement has expired.

          In August, 1995, the Board of Directors approved the terms of an
          employment agreement with Robert Knoth. Effective as of January 1,
          1995, the terms of the Employment Agreement provide that Mr. Knoth's
          salary will be $59,500 per year and that he will be employed as
          Secretary and Treasurer until a term expiring on December 31, 1999. As
          further provided under the terms of the Employment Agreement, the
          Company will provide certain benefits such as health benefits. The
          Company also agreed to pay the premium of a $150,000 term life
          insurance policy payable to Mr. Knoth's beneficiary. In the event the
          Company declines to enter into a new employment agreement with Mr.
          Knoth at the expiration of his term, the Company has agreed to pay Mr.
          Knoth the sum of $44,625. Additionally, in the event there occurs a
          "change of control" of the Company, and within the one (1) year period
          thereafter Mr. Knoth's employment is terminated or he resigns, then
          Mr. Knoth will be entitled to receive a sum equal to the balance of
          his base salary for the remainder of the term plus $44,625. A "change
          of control" is defined to mean (i) a person becomes the holder of 30%
          or more of the combined voting power of the Company's outstanding
          securities, (ii) the stockholders of the Company approve a merger or
          consolidation whereby the Company's voting securities fail to
          represent, after such a merger or consolidation, at least 50.1% of the
          voting securities of the surviving entity. Additionally, in the event
          the Company relocates outside of the New York City Metropolitan area,
          it has agreed to pay Mr. Knoth the sum of $44,625. The Employment
          Agreement has expired.

          In December 1997, the Board of Directors approved the terms of an
          employment agreement with Joan Prideaux. The terms of the employment
          agreement provide that Ms. Prideaux's salary will be $60,000 per year
          and that she will be employed as Vice President-Sales and Marketing.
          The agreement is for a period of five years. As further provided under
          the terms of the employment agreement, the Company will provide
          certain benefits such as health benefits. The Company also agreed to
          pay the premium of a $150,000 term life insurance policy payable to
          Ms. Prideaux's beneficiary.


                                       19
<PAGE>

                                 IEH CORPORATION

                                    PART III

Item 10.  Executive Compensation (continued)

          Employment Agreements (continued)

          In the event the Company declines to enter into a new employment
          agreement with Ms. Prideaux at the expiration of the term, the Company
          has agreed to pay Ms. Prideaux the sum of $42,750. Additionally, in
          the event there occurs a "change of control" of the Company, and
          within the one (1) year period thereafter Ms. Prideaux's employment is
          terminated or he resigns, then she will be entitled to receive a sum
          equal to the balance of her base salary for the remainder of the term
          plus $42,750. A "change of control" is defined to mean (i) a person
          becomes the holder of 30% or more of the combined voting power of the
          Company's outstanding securities, (ii) the stockholders of the Company
          approve a merger or consolidation whereby the Company's voting
          securities fail to represent, after such a merger or consolidation, at
          least 50.1% of the voting securities of the surviving entity.
          Additionally, in the event the Company relocates outside of the New
          York City Metropolitan area, it has agreed to pay Ms. Prideaux the sum
          of $42,750.

          Cash Bonus Plan

          In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
          Executive Officers.

          Contributions to the Bonus Plan are made by the Company only after
          pre-tax operating profits exceed $150,000 for a fiscal year, and then
          to the extent of 10% of the excess of the greater of $150,000 of 25%
          of pre-tax operating profits. There were no contributions to the Bonus
          Plan for the fiscal years ended March 31, 2000, April 2, 1999 and
          March 27, 1998.


                                       20
<PAGE>

                                 IEH CORPORATION

                                    PART III

Item 11.  Security Ownership of Certain Beneficial Owners and Management

          The following table sets forth certain information as of June 20, 2000
          with respect to (i) the persons (including any "group" as that term is
          used in Section 13(d)(3) of the Securities Exchange Act of 1934),
          known by the Company to be the beneficial owner of more than five
          percent (5%) of any class of the Company's voting securities; (ii)
          each Executive Officer and Director who owns Common Stock in the
          Company; and (iii) all Executive Officers and Directors as a group. As
          of June 20, 2000, there were 2,303,468 shares of Common Stock issued
          and outstanding.

<TABLE>
<CAPTION>
                                                        Amount of and
                       Name and Address of          Nature of Beneficial
  Title of Class        Beneficial Owner                 Ownership           Percentage of Class
--------------------------------------------------------------------------------------------------
<S>                    <C>                           <C>                       <C>
Common Stock $.50       Michael Offerman                  399,784                 17.4%
Par Value               140 58th Street
                        Brooklyn, NY  11220(1)


                        Murray Sennet                      24,500                  1.1%
                        1900 Manor Lane
                        Plano, TX  75093


                        Allen Gottlieb                          0                   0
                        325 Coral Way
                        Ft. Lauderdale. FL
                        33301

                        Robert Pittman                     20,000                   *
                        45 Ocean Avenue
                        Monmouth Bch, NJ
                        07750

                        Gerard Deiss
                        16 Rue De La Mart                 547,000                 23.7%
                        Chartreuil
                        6-68 490
                        Mere Par Montfort
                        L'Amaury, France(2)

                        David Lopez and                   278,000                 12.1%
                        Nancy Lopez
                        Edge of Woods
                        P.O. Box 323
                        Southampton, NY 11968

                        All Officers & Directors          444,284                 19.3%
                        as a Group (4 in
                        number)
</TABLE>

                                       21
<PAGE>

                                IEH CORPORATION

                                    PART III

Item 11.  Security Ownership of Certain Beneficial Owners and Management
          (continued)

          (Notes from previous page)

          --------------------------

          *    Less than 1%.

          1    43,600 shares of Common Stock are jointly owned by Mr. Offerman
               and his wife, Gail Offerman.

          2    These shares are beneficially owned by Mr. Deiss through a
               Liechtenstein trust.


          All shares set forth above are directly by the named individual unless
          otherwise stated.

Item 12.  Certain Relationships and Related Transactions

          See "Executive Compensation-Employment Agreements" for a discussion of
          the employment agreements between the Company and management.

Item 13.  Exhibits, Lists and Reports on Form 8-K

          (a)  Exhibits filed with Form 10-KBS:

          See annexed Exhibit index.

          (b)  Reports on Form 8-K

          The Company did not file any Reports on Form 8-K during the last
          quarter of the period covered by this Report.


                                       22
<PAGE>

                                   Signatures

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                        IEH CORPORATION

                                        By:  /s/ Michael Offerman
                                        -----------------------------------
                                        Michael Offerman, President

Dated:   June 25, 2000

     Pursuant to the requirements of the Securities Exchange Act of l934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

/s/    Michael Offerman                                 June 25, 2000
--------------------------------------
Michael Offerman, Chairman of the
 Board and President

/s/  Robert Knoth                                       June 25, 2000
--------------------------------------
Robert Knoth, Secretary and
 Treasurer

/s/   Murray Sennet                                     June 25, 2000
--------------------------------------
Murray Sennet, Director

/s/  Robert Pittman                                     June 25, 2000
--------------------------------------
Robert Pittman, Director

/s/ Alan Gottlieb                                       June 25, 2000
--------------------------------------
Alan Gottlieb, Director

                                       23
<PAGE>

                                 IEH Corporation

                                    Contents

                        March 31, 2000 and April 2, 1999

                                                                        Page
                                                                       Number
                                                                     ----------

Report of Independent Certified Public Accountant               `        25

Financial Statements:

    Balance Sheets as of March 31, 2000 and April 2, 1999               26-27

    Statement of Operations for the twelve months
         ended March 31, 2000 and April 2, 1999                          28

    Statement of Stockholders' Equity as of March 31, 2000
          and April 2, 1999                                              29

    Statement of Cash Flows for the years ended March 31, 2000
          and April 2, 1999                                             30-31

Notes to Financial Statements                                           32-40



                                       25
<PAGE>

                Report of Independent Certified Public Accountant
                -------------------------------------------------

Board of Directors
IEH Corporation

We have audited the  accompanying  balance sheets of IEH Corporation as of March
31,  2000  and  April  2,  1999  and  the  related   statements  of  operations,
stockholders'  equity,  and cash  flows for each of the two years in the  period
ended  March 31,  2000 and April 2, 1999.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based upon our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of IEH Corporation as of March 31,
2000 and April 2, 1999 and the results of its  operations and its cash flows for
each of the two years ended March 31, 2000 and April 2, 1999 in conformity  with
generally accepted accounting principles.


                                           Jerome Rosenberg, CPA, P.C.

Melville, New York
May 25, 2000

                                       25
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     As of March 31, 2000 and April 2, 1999


<TABLE>
<CAPTION>
                                                                         March 31,          April 2,
                                                                           2000               1999
                                                                           ----               ----

                                           ASSETS

<S>                                                                      <C>               <C>
CURRENT ASSETS:
Cash                                                                   $     4,045        $   15,120
Accounts receivable, less allowances for doubtful accounts
   of $10,062 at March 31, 2000 and April 2, 1999                          772,634           810,551
Inventories (Note 2)                                                       976,169           926,471
Prepaid expenses and other current assets (Note 3)                          16,212            14,683
                                                                        ----------        ----------

          Total current assets                                           1,769,060         1,766,825
                                                                        ----------        ----------


PROPERTY, PLANT AND EQUIPMENT, less accumulated
   depreciation and amortization of $5,075,854 at March 31, 2000
   and $4,777,296 at April 2, 1999 (Note 4)                              1,258,153         1,438,733
                                                                        ----------        ----------


OTHER ASSETS:
  Prepaid pension cost (Note 11)                                            43,949            43,949
  Other assets                                                              46,378            46,622
                                                                        ----------        ----------
                                                                            90,327            90,571
                                                                        ==========        ==========


Total assets                                                            $3,117,540        $3,296,129
                                                                        ==========        ==========
</TABLE>

                 See accompanying notes to financial statements


                                       26
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     As of March 31, 2000 and April 2, 1999

<TABLE>
<CAPTION>

                                                                     March 31,       April 2,
                                                                        2000           1999
                                                                        ----           ----

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                                                  <C>             <C>
CURRENT LIABILITIES:
Accounts receivable financing (Note 5)                             $  689,775     $  759,330
Notes payable, equipment, current portion (Note 8)                     19,555         25,333
Notes payable, current portion (Note 7)                                66,009         60,798
Loans payable, current portion (Note 9)                                53,929         50,693
Accrued corporate income taxes                                         16,020         15,352
Union pension and health & welfare, current portion (Note 12)          96,000         96,000
Accounts payable                                                      779,686        769,893
Other current liabilities (Note 6)                                    159,130        178,303
                                                                    ---------      ---------

          Total current liabilities                                 1,880,104      1,955,702
                                                                    ---------      ---------

LONG-TERM LIABILITIES:
Pension Plan payable (Note 11)                                        516,966        516,966
Notes payable, equipment, less current portion (Note 8)                50,858         52,936
Notes payable, less current portion (Note 7)                            5,750         71,759
Loan payable, less current portion (Note 9)                            81,127        133,747
Union pension & health & welfare, less current
   portion (Note 12)                                                   36,689         62,827
                                                                    ---------      ---------
          Total long-term liabilities                                 691,390        838,235
                                                                    ---------      ---------

          Total liabilities                                         2,571,494      2,793,937
                                                                    ---------      ---------

STOCKHOLDERS' EQUITY:
Common stock,  $.50 par value;  10,000,000 shares
   authorized,  2,303,468 shares issued and
   outstanding at March 31, 2000 and at April 2, 1999               1,151,734      1,151,734

Capital in excess of par value                                      1,615,874      1,615,874
Retained earnings (Deficit)                                        (2,221,562)    (2,265,416)
                                                                   -----------    -----------
          Total stockholders' equity                                  546,046        502,192
                                                                   -----------    -----------

          Total liabilities and stockholders' equity               $3,117,540     $3,296,129
                                                                   ===========    ===========
</TABLE>


                 See accompanying notes to financial statements

                                       27
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                              Years Ended
                                                                              -----------
                                                                  March 31,                 April 2,
                                                                     2000                     1999
                                                              ------------------       -------------------

<S>                                                           <C>                       <C>
REVENUE, net sales (Note 14)                                      $4,486,573                $4,334,477
                                                                  ----------                ----------

COSTS AND EXPENSES:

  Cost of products sold                                            3,219,798                 3,214,927
  Selling, general and administrative                                772,715                   847,358
  Interest expense                                                   141,159                   137,766
  Depreciation and amortization                                      298,558                   273,029
                                                                  ----------                ----------
                                                                   4,432,230                 4,473,080
                                                                  ----------                ----------

OPERATING INCOME (LOSS)                                               54,343                  (138,603)

OTHER INCOME                                                             711                       810
                                                                  ----------                ----------

INCOME (LOSS) BEFORE INCOME TAXES                                     55,054                  (137,793)

PROVISION FOR INCOME TAXES                                           (11,200)                  (15,031)
                                                                  ----------                ----------

NET INCOME (LOSS)                                                 $   43,854                $ (152,824)
                                                                  ==========                ==========

Basic and Diluted Earnings per common share (Note 1)              $     .019                $    (.066)
                                                                  ==========                ==========

Weighted average number of  common shares
  outstanding (in thousands)                                           2,303                     2,303
                                                                  ==========                ==========
</TABLE>

                 See accompanying notes to financial statements

                                       28
<PAGE>

                                 IEH CORPORATION

                           STATEMENT OF STOCKHOLDERS' EQUITY
              For the Years Ended March 31, 2000 and April 2,1999

<TABLE>
<CAPTION>

                                                                                   Capital in Excess          Retained Earnings
                                                   Common Stock                      of Par Value                 (Deficit)
                                        --------------------------------------   ---------------------     ------------------------
                                             Shares                Amount
                                        -----------------     ----------------

<S>                                     <C>                   <C>                      <C>                      <C>
Balances, March 27, 1998                    2,303,502           $1,151,751             $1,615,874               $ (2,112,592)


Retirement of common stock at
September 25, 1998                                (34)                 (17)

Net Loss: Year ended April 2, 1999                                                                                  (152,824)
                                        -----------------     ----------------   ---------------------     ------------------------

Balances, April 2, 1999                     2,303,468            1,151,734              1,615,874                 (2,265,416)

Net Income: Year ended March 31,
2000                                                                                                                  43,854
                                        -----------------     ----------------   ---------------------     ------------------------

Balances, March 31, 2000                    2,303,468           $1,151,734             $1,615,874               $ (2,221,562)
                                        =================     ================   =====================     ========================
</TABLE>


                 See accompanying notes to financial statements


                                       30
<PAGE>
                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
           For the Twelve Months Ended March 31, 2000 and April 2,1999

<TABLE>
<CAPTION>
                                                                                      Years Ended
                                                                      ----------------------------------------
                                                                           March 31,              April 2,
                                                                             2000                   1999
                                                                      -------------------    -----------------

<S>                                                                         <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                       $  43,854               $ (152,824)
                                                                          ----------              -----------

  Adjustments to reconcile net income to net cash used in
    operating activities

  Depreciation and amortization                                             298,558                  273,029

Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                                 37,917                   28,170
  (Increase) decrease inventories                                           (49,698)                  22,811

  (Increase) decrease in prepaid expenses and other current assets           (1,529)                  23,541

  (Increase) decrease in other assets                                           244                      807

  (Decrease) increase in accounts payable                                     9,793                   46,937
  (Decrease) increase in other current liabilities                          (19,173)                  54,277

  Increase in accrued corporate income taxes                                    668                       20
  (Decrease) in due to union pension & health & welfare                     (26,138)                 (72,000)
                                                                          ----------              -----------

               Total adjustments                                            250,642                  377,592
                                                                          ----------              -----------

NET CASH PROVIDED BY (USED) FOR OPERATING ACTIVITIES                        294,496                  224,768
                                                                          ----------              -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Acquisition of property, plant and equipment                            (117,978)                (306,137)
                                                                          ----------              -----------

          NET CASH USED IN INVESTING ACTIVITIES                           $(117,978)               $(306,137)
                                                                          ----------              -----------
</TABLE>


                 See accompanying notes to financial statements

                                       30
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
          For the Twelve Months Ended March 31, 2000 and April 2, 1999

<TABLE>
<CAPTION>
                                                            March 31,                   April 2,
                                                              2000                        1999
                                                      ---------------------       ---------------------

<S>                                                     <C>                            <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Retirement of common shares                             $          -                 $       (17)
Principal payments on notes payable                          (87,539)                    (63,928)

Increase in notes payable                                     18,885                      86,195
Proceeds from accounts receivable financing                  (69,555)                    103,315
Principal payments on loan payable                           (49,384)                    (48,530)
                                                        ------------                 -----------

NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES                                                  (187,593)                     77,035
                                                                                     -----------

INCREASE (DECREASE) IN CASH                                  (11,075)                     (4,334)


CASH, beginning of period                                     15,120                      19,454
                                                        ------------                 -----------

CASH, end of period                                     $      4,045                 $    15,120
                                                        ============                 ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
cash paid during the nine months for:

     Interest                                           $    141,159                 $   137,766
                                                        ============                 ===========

     Income Taxes                                       $     11,200                 $    15,031
                                                        ============                 ===========
</TABLE>

                 See accompanying notes to financial statements

                                       31

<PAGE

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          Description of Business:

          The Company is engaged in the design, development, manufacture and
          distribution of high performance electronic printed circuit connectors
          and specialized interconnection devices. Electronic connectors and
          interconnection devices are used in providing electrical connections
          between electronic component assemblies. The Company develops and
          manufactures connectors which are designed for a variety of high
          technology and high performance applications, and are primarily
          utilized by those users who require highly efficient and dense (the
          space between connection pins with the connector) electrical
          connections.

          The Company is continuously redesigning and adapting its connectors to
          meet and keep pace with developments in the electronics industry and
          has, for example, developed connectors for use with flex-circuits now
          being used in aerospace programs, computers, air-borne communications
          systems, testing systems and other areas. The Company also services
          its connectors to meet specified product requirements.

          Accounting Period:

          The Company maintains an accounting period based upon a 52-53 week
          year which ends on the nearest Friday in business days to March 31st.
          The year ended March 31, 2000 was comprised of 52 weeks and the year
          ended April 2, 1999 was comprised of 53 weeks.

          Revenue Recognition:

          Revenues are recognized at the shipping date of the Company's
          products.

          Inventories:

          Inventories are stated at cost, on a first-in, first-out basis, which
          does not exceed market value.

          Concentration of Credit Risk:

          The Company maintains cash balances at one bank. Amounts on deposit
          are insured by the Federal Deposit Insurance Corporation up to
          $200,000 in aggregate. There were no uninsured balances at either
          March 31, 2000 or April 2, 1999.


                                       32
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):



          Property, Plant and Equipment:

          Property, plant and equipment is stated at cost less accumulated
          depreciation and amortization. The Company provides for depreciation
          and amortization using the straight-line method over the estimated
          useful lives (3-10 years) of the related assets.

          Maintenance and repair expenditures are charged to operations, and
          renewals and betterments are capitalized. Items of property, plant and
          equipment which are sold, retired or otherwise disposed of are removed
          from the asset and accumulated depreciation or amortization account.
          Any gain or loss thereon is either credited or charged to operations.

          Income Taxes:

          The Company follows the policy of treating investment tax credits as a
          reduction in the provision for federal income tax in the year in which
          the credit arises or may be utilized. Deferred income taxes arise from
          temporary differences resulting from different depreciation methods
          used for financial and income tax purposes. The Company has adopted
          Statement of Financial Accounting Standards (SFAS) No. 109,
          "Accounting for Income Taxes".

          Net Income Per Share:

          The Company has adopted the provisions of SFAS No. 128, "Earnings Per
          Share", which requires the disclosure of "basic" and "diluted"
          earnings (loss) per share. Basic earnings per share is computed by
          dividing net income by the weighted average number of common shares

          outstanding during each period. Diluted earnings per share is similar
          to basic earnings per share except that the weighted average number of
          common shares outstanding is increased to reflect the dilutive effect
          of potential common shares, such as those issuable upon the exercise
          of stock or warrants, as if they had been issued. For the years ended
          March 31, 2000 and April 2, 1999, there were no differences between
          basic and diluted earnings per share.

          Fair Value of Financial Instruments:

          The carrying value of the Company's financial instruments, consisting
          of accounts receivable, accounts payable, and borrowings, approximate
          their fair value.

          Use of Estimates:

          The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the reported amounts of assets and
          liabilities, revenues and expenses, and disclosure of contingent
          assets and liabilities at the date of the financial statements. Actual
          amounts could differ from those estimates.



                                       33
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

          Impairment of Long-Lived Assets:

          SFAS No. 121, "Accounting For The Impairment of Long-Lived Assets To
          Be Disposed Of", requires that long-lived assets and certain
          identifiable intangibles to be held and used by an entity be reviewed
          for impairment whenever events or changes in circumstances indicate
          that the carrying amount of an asset may not be recoverable. The
          Company has adopted SFAS No. 121 effective March 31, 2000. There was
          no impact of such adoption on the Company's financial condition and
          results of operations.

          Reporting Comprehensive Income:

          The Company has adopted the provisions of SFAS No. 130, "Reporting
          Comprehensive Income". This statement established standards for
          reporting and display of comprehensive income and its components
          (revenues, expenses, gains and losses) in an entity's financial
          statements. This Statement requires an entity to classify items of
          other comprehensive income by their nature in a financial statement
          and display the accumulated balance of other comprehensive income
          separately from retained earnings and additional paid-in capital in
          the equity section of a statement of financial position. The adoptions
          of SFAS No. 130 did not significantly impact on the Company's reported
          net income (loss).

          Segment Information:

          The Company has adopted the provisions of SFAS No. 131, "Disclosures
          About Segment of An Enterprise and Related Information." This
          Statement requires public enterprises to report

          financial and descriptive information about its reportable operating
          segments and establishes standards for related disclosures about
          product and services, geographic areas, and major customers. The
          adoption of SFAS No. 131 did not affect the results of operations or
          financial position. The disclosure of major customers is reported in
          Note 15. Sales outside of the United States accounted for less than
          one percent (1%) of total revenue.

          Software Developed for Internal Use:

          The Company provides for the capitalization of internal use of
          computer software costs. These capitalized costs are amortized on a
          straight-line basis over the useful life of the software.

          Effect of New Accounting Pronouncements:

          In December 1999, the Securities and Exchange Commission issued Staff
          Accounting Bulletin No. 101, "Revenue Recognition Statements" (SAB
          101), which provides additional guidance in applying generally
          accepted accounting principles. The Company plans to adopt this
          Statement as of April 1, 2000. The adoption of this Statement is not
          expected to have a material impact on the Company's revenue
          recognition policy.


                                       34
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 2 -  INVENTORIES:

          Inventories are comprised of the following:

                                 March 31,              April 2,
                                    2000                  1999
                             ------------------      ---------------

          Raw materials          $683,443               $702,176
          Work in progress        190,480                122,606
          Finished goods          102,246                101,689
                                 --------               --------
                                 $976,169               $926,471
                                 ========               ========

Note 3 -  PREPAID EXPENSES AND OTHER CURRENT ASSETS:

          Prepaid expenses and other current assets are comprised of the
          following:

                                         March 31,             April 2,
                                           2000                  1999
                                      ---------------      -----------------

          Prepaid insurance             $14,613                $14,077
          Other current assets            1,599                    606
                                        -------                -------
                                        $16,212                $14,683
                                        =======                =======

Note 4 -  PROPERTY, PLANT AND EQUIPMENT:

          Property, plant and equipment are as follows:

                                                 March 31,        April 2,
                                                   2000             1999
                                             --------------   ---------------

          Computers                            $ 183, 808      $  161,896
          Leasehold improvements                  585,831         583,206
          Machinery and equipment               3,901,503       3,854,973
          Tools and dies                        1,502,849       1,455,938
          Furniture and fixture                   148,770         148,770
          Transportation equipment                 11,246          11,246
                                                ---------       ---------

                                                6,334,007       6,216,029

          Less: accumulated depreciation
          and amortization                      5,075,854       4,777,296
                                                ---------       ---------

                                               $1,258,153      $1,438,733
                                                =========       =========


                                       35
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 5 -  ACCOUNTS RECEIVABLE FINANCING:

          The Company entered into an accounts receivable financing agreement
          whereby it can borrow up to eighty percent of its eligible receivables
          (as defined in the agreement) at an interest rate of 2 1/2 % above The
          Chase Manhattan Bank's publicly announced rate (9.0 %) at March 31,
          2000, with a maximum of 12% per annum. The agreement has an initial
          term of one year and will automatically renew for successive one year
          terms, unless terminated by the Company or Lender upon receiving sixty
          days prior notice. The loan is secured by the Company's accounts
          receivable and inventories.

Note 6 -  OTHER CURRENT LIABILITIES:

          Other current liabilities are comprised of the following:

                                              March 31,             April 2,
                                                2000                  1999
                                           --------------      ---------------

          Payroll and vacation accruals           $63,317             $ 77,787
          Sales commissions                         5,715               21,178
          Pension plan payable                     65,489               65,489
          Other                                    24,609               13,849
                                           --------------      ---------------

                                                 $159,130             $178,303
                                           ==============      ===============

Note 7 -  NOTES PAYABLE:

          The Company was in arrears in the amount of $236,000 to the New York
          City Economic Development Corporation ("NYCEDC") for rent due for its
          offices and manufacturing facilities. In May 1997, the Company and the
          NYCEDC negotiated an agreement for the Company to pay off its
          indebtedness over a 48 month period, by the Company issuing notes
          payable to NYCEDC. The note bears interest at the rate of 8.25% per
          annum. The balance remaining at March 31, 2000 was $71,759, with
          $66,009 being reported as a current liability and the remainder being
          reported as a long-term liability. (See Note 12 - relating to lease
          reduction).

Note 8 -  NOTES PAYABLE EQUIPMENT:

          The Company financed the acquisition of new computer equipment and
          software with notes payable. The notes are payable over a sixty month
          period. The balance remaining at March 31, 2000 amounted to $70,413.


                                       36
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

NOTE 8 -  NOTES PAYABLE EQUIPMENT (continued):

          Aggregate future principal payments are as follows:

          2001                 19,555
          2002                 19,555
          2003                 19,532
          2004                 10,210
          Thereafter            1,561
                              -------
                              $70,413
                              =======

Note 9 -  LOAN PAYABLE:

          On July 22, 1992, the Company obtained a loan of $435,000 from the New
          York Urban Development Corporation ("NYUDC"), collateralized by
          machinery and equipment. The loan is payable over ten years, with
          interest rates progressively increasing from 4% to 8% per annum.

          The balance remaining at March 31, 2000 was $135,057.

          Aggregate future principal payments are as follows:

          Fiscal Year Ending March:
          2001                        $  53,929
          2002                           58,405
          2003                           22,723
                                      ---------
                                      $ 135,057
                                      =========

          In April 1997, the Company was informed by the NYUDC that the loan was
          sold and conveyed to WAMCO XXIV, Ltd. All the terms and conditions of
          the loan remained in effect.

          As of March 31, 2000, the Company had failed to meet one of the
          financial covenants of the loan agreement; namely that the "Company
          shall be obligated to maintain a tangible net worth of not less than
          $1,300,000 and the Company shall be obligated to maintain a ratio of
          current assets to current liabilities of 1.1 to 1.0.

          The Company reported tangible net worth of $546,046. The ratio of
          current assets to current liabilities was .94 to 1.0.

          The Company has applied for additional waivers of this covenant.
          Neither the NYUDC or WAMCO XXIV, Ltd. has acted on these requests.
          There are no assurances that the Company will receive any additional
          waivers of this covenant. Should the Company not receive any
          additional waivers, then it will be deemed to be in default of this
          loan obligation and the loan plus interest will become due and
          payable.


                                       37
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 10 - INCOME TAXES:

          The Company has available at March 31, 2000, for federal income tax
          purposes, a net operating loss carryforward of approximately
          $2,158,000 of which approximately $1,724,000 will expire in 2007 with
          the balance in 2017. In addition, the Company has unused investment
          tax credits of approximately $86,000 which expire between 1999 and
          2002.

Note 11 - PENSION PLAN-SALARIED PERSONNEL:

          On June 30, 1995, the Company applied to the Pension Benefit Guaranty
          Corporation ("PBGC") to have the PBGC assume all of the Company's
          responsibilities and liabilities under its Salaried Pension Plan. On
          April 26, 1996, the PBGC determined that the Salaried Pension Plan did
          not have sufficient assets available to pay benefits which were and
          are currently due under the terms of the Plan.

          The PBGC further determined that pursuant to the provisions of the
          Employment Retirement Income Security Act of 1974, as amended
          ("ERISA"), that the Plan must be terminated in order to protect the
          interests of the Plan's participants. Accordingly, the PBGC proceeded
          pursuant to ERISA to have the Plan terminated and the PBGC appointed
          as statutory trustee, and to have July 31, 1995 established as the
          Plan's termination date.

          At March 31, 2000 and April 2, 1999, $65,489 of the pension liability
          is included in other current liabilities, with the balance of $516,966
          shown as a long-term liability.

          On those dates, the long-term portion includes $226,041, which
          represents the recognition of the additional minimum liability to
          comply with the requirements of Statement of Financial Accounting
          Standards No. 87.

          In August 1998, the Company was notified by the PBGC that the Company
          is liable to the PBGC for the following amounts as of September 1,
          1998:

          . $ 456,418 representing the amount of unfunded benefit liabilities
            of the Plan

          . $ 242,097 representing funding liability

          The total payment claimed by the PBGC amounted to $698,515.

          The amount claimed is being contested by the Company, and the PBGC
          granted the Company an extension of time until February 22, 1999 in
          which to file an appeal. The Company did file an appeal and is
          presently awaiting a response from the PBGC.


                                       38
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 12 - COMMITMENTS:

          The Company had entered into employment agreements with certain
          officers. The agreements provided for retirement compensation of
          $30,000 per annum for a period of five years upon reaching either age
          65, death, total disability or employment terminated by mutual consent
          between the Company and the respective officer. Prior to March 26,
          1993, all but one of these agreements had expired. The remaining
          agreement is with the President of the Company.

          On December 1, 1998 the Company amended its lease on its premises by
          surrendering a portion of its rented premises back to the landlord.
          Accordingly, the base monthly rent was reduced to $ 10,397 or $121,765
          per annum through December 1999 and to $9,397 or $112,764 per annum
          through the conclusion of the lease which ends August 23, 2001.

          The Company is obligated under this lease through August 23, 2001, at
          minimum annual rentals as follows:

          Fiscal year ending:

          2001              $112,764
                            ========

          The net rental expense for the year ended March 31, 2000 for this
          lease was $118,520.

          (See Note 7 - Notes Payable relating to rent arrears agreement)

          The Company has a collective bargaining multi-employer pension plan
          with the United Auto Workers of America, Local 259. Contributions are
          made in accordance with a negotiated labor contract and are based on
          the number of covered employees employed per month. With the passage
          of the Multi-Employer Pension Plan Amendments Act of 1990 ("The Act"),
          the Company may become subject to liabilities in excess of
          contributions made under the collective bargaining agreement.
          Generally, these liabilities are contingent upon the termination,
          withdrawal, or partial withdrawal from the Plan. The Company has not
          taken any action to terminate, withdraw or partially withdraw from the
          Plan nor does it intend to do so in the future. Under the Act,
          liabilities would be based upon the Company's proportional share of
          the Plan's unfunded vested benefits which is currently not available.
          The amount of accumulated benefits and net assets of such Plan also is
          not currently available to the Company. The total contributions
          charged to operations under this pension plan were $32,120 for the
          year ended March 31, 2000 and $35,640 for the year ended April 2,
          1999.

          As of March 31, 2000, the Company reported arrears with respect to its
          contributions to the Union's health and welfare plan. The amount due
          the health and welfare plan was $132,689.

          The total amount due of $132,689 is reported on the accompanying
          balance sheet in two components; $96,000 reported as a current
          liability and $36,689 as a long-term liability.


                                       39
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 12 - COMMITMENTS (continued):

          In December 1993, the Company and Local 259 entered into a verbal
          agreement whereby the Company would satisfy this debt by the following
          payment schedule:

          The sum of $8,000 will be paid by the Company each month in
          satisfaction of the current arrears until this total debt has been
          paid. Under this agreement, the projected payment schedule for arrears
          will satisfy the total debt in 20 months. Additionally, both parties
          have agreed that current obligatory funding for the Pension Fund will
          be made on a timely current basis.

Note 13 - CHANGES IN STOCKHOLDERS' EQUITY:

          Retained earnings (deficit) decreased by $43,854, which represents the
          net income for the twelve months ended March 31, 2000.

Note 14 - REVENUES FROM MAJOR CUSTOMERS:

          In the fiscal year ended March 31, 2000, more than 25% of the
          Company's total revenues were earned from one customer. Total sales to
          this customer were approximately $1,105,000.


                                       40
<PAGE>

                                 IEH CORPORATION

                                    Exhibits

     The following Exhibits have previously been filed with the Securities and
Exchange Commission and, pursuant to 17 C.F.R. Secs. 201.24 and 240.12b-32, are
incorporated by reference to the document referenced in brackets following the
descriptions of such Exhibits. Those Exhibits designated by an asterisk (*) are
filed herewith.

Exhibit No.                             Description

3.1                 Amended and Restated Certificate of Incorporation of the
                    Company [Exhibit C-4 to Current Report filed on From 8-K,
                    dated February 27, 1991].

3.2                 By-Laws of the Company Filed as Exhibit 3.2 on Report on
                    Form 10-KSB for the fiscal year ended March 27, 1994.

4.1                 Form of Common Stock Certificate of Company. Filed as
                    Exhibit 4.1 on Report on Form 10-KSB for the fiscal year
                    ended March 27, 1994.

4.2                 Form of Secured Promissory Note payable, New York State
                    Urban Development Corporation [Exhibit 10B to Current Report
                    on Form 8-K, dated July 22, 1992].

10.1                License Agreement between the Company and Brevetron, S.A.,
                    Lugano, Switzerland, dated January 1, 1979. Filed as Exhibit
                    10.1 on Report on Form 10-KSB for the fiscal year ended
                    March 27, 1994.

10.2                Amendment to License Agreement between the Company and
                    Brevetron, S.A. dated September 28, 1982. Filed as Exhibit
                    10.2 on Report on Form 10-KSB for the fiscal year ended
                    March 27, 1994.

10.3                Amendment to License Agreement between the Company and
                    Brevetron, S.A. dated September 20, 1991. Filed as Exhibit
                    10.3 on Report on Form 10-KSB for the fiscal year ended
                    March 27, 1994.

10.4                Lease for premises 140 58th Street, Brooklyn, New York 11220
                    [Exhibit A to Current Report filed on Form 8-K, dated August
                    23, 1991].

10.5                Form of Loan Agreement between the Company and the New York
                    State Urban Development Corporation [Exhibit 10A to Current
                    Report filed on Form 8-K, dated July 22, 1992].


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<PAGE>

                                     IEH CORPORATION

                                  Exhibits (continued)

10.6                Form of Security Agreement between the Registrant and New
                    York State Urban Development Corporation [Exhibit 10C to
                    Current Report filed on Form 8-K, dated July 22, 1992].

10.7                Form of financing agreement between the Company and Milberg
                    Factors, Inc. [Exhibit C-1 to the Current Report filed on
                    Form 8- K, dated March 1, 1990].

10.8                Form of Collective Bargaining Agreement between Company and
                    Local 259 of the United Auto Workers Union, dated October 1,
                    1991.

10.9                Form of Employment Agreement between Company and Michael
                    Offerman together with Amendment No. 1 dated November
                    27,1997. [filed as Exhibit 10.9 to Form 10KSB for the fiscal
                    year ended March 28, 1997]

10.10               Form of Employment Agreement between the Company and Ralph
                    Acello together with Amendment No. 1 dated November
                    27,1997.[filed as Exhibit 10.10 to Form 10KSB for the fiscal
                    year ended March 28, 1997]

10.11               Form of Employment Agreement between the Company and Robert
                    Knoth together with Amendment No. 1 dated November
                    27,1997.[filed as Exhibit 10.11 to Form 10KSB for the fiscal
                    year ended March 28, 1997]

10.12               Form of Employment Agreement between the Company and Joan
                    Prideaux. [filed as Exhibit 10.12 to Form 10KSB for the
                    fiscal year ended March 28, 1997] 21. Subsidiaries: None

23.1*               Consent of Jerome Rosenberg CPA, independent auditor of the
                    Company

27*                 EDGAR Financial Date Schedule


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<PAGE>

                                IEH CORPORATION

                             Exhibits (continued)

99.1                Stipulation and Escrow Agreement dated December 18, 1997
                    between the Company and New York Economic Development
                    Corporation together with Stipulation, Consent and Final
                    Judgement.[filed as Exhibit 99.1 to Form 10-QSB for the
                    quarter ended December 26, 1997]

                          ----------------------------


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