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 April 2, 1999

[ ]  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) 492-4448
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

          Securities registered under Section 12(b) ofthe 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)

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

         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
<PAGE>
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 April
2, 1999 were $4,334,477.

         On June 21,  1999,  the  aggregate  market value of the voting stock of
Registrant  held by  non-affiliates  of Registrant  (consisting of Common Stock,
$.50 par value)  computed  by  reference  to the  closing bid price at which the
stock was sold on such date ($.5/16) was approximately $323,182.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

         On June 21, 1999, 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) 492-4448, 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 relayed 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

                                       3
<PAGE>
         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.

         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  April 2, 1999,  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 April 2,1999.  Approximately 1% of the Company's net
         sales for the year April 2,1999, 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

                                       4
<PAGE>
         mid-year 1994 and was recently  completed.  The new development process
         with this commercial client has lead 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.  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.  During the fiscal
         year 1996, the Company's  business with this customer  doubled from the
         previous fiscal year.

         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  fiscal year ended April 2, 1999
         sales of the COMTAC connectors  accounted for over 10% of the Company's
         total  sales.  The  Company  has sent to certain of its  customers  and
         potential customers pre-production units for evaluation. 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 State Urban  Development  Corporation  ("UDC"),  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 April 2, 1999 was $184,440.

         Aggregate future principal payments are as follows:

              Fiscal Year Ending March:
              2000                                                    $50,693
              2001                                                     54,289
              2002                                                     58,795
              2003                                                     20,663
                                                                       ------
                                                                     $184,440
                                                                     ========
         In April 1997,  the  Company was  informed by the UDC that the loan was
         sold and conveyed to WAMCO XXIV,  Ltd. All the terms and  conditions of
         the loan remained in effect.

         As of  April  2,  1999,  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.

                                        5
<PAGE>
         The  Company  reported  tangible  net worth of  $502,192.  The ratio of
         current assets to current liabilities was .9 to 1.0.

         The  Company  has  applied  for  additional  waivers of this  covenant.
         Neither the UDC or WAMCO XXIV 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.

         The Company has with the United Auto  Workers of America,  Local 259, a
         collective bargaining  multi-employer  pension plan.  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 $35,640 for the year ended April 2, 1999
         and $40,176 for the year ended March 27, 1998.

         As of April 2, 1999, the Company  reported  arrears with respect to its
         contributions  to the Union's health and welfare and pension plans. The
         amount due the health and welfare  plan was $155,189 and the amount due
         the pension plan was $3,638.

         The total  amount  due of  $158,827  is  reported  on the  accompanying
         balance  sheet  in  two  components;  $96,000  reported  as  a  current
         liability and $62,827 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.
                                       6
<PAGE>
         At April 2, 1999 and March 27, 1998,  $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 $ 2,230 representing
         the premium liability

         The total amount claimed by the PBGC amounts to $700,745.

         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>
         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 April
         2,  1999 and March  27,  1998,  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 38% and 30% of the
         Company's  net sales for the  years  ended  April 2, 1999 and March 27,
         1998,  respectively.  One of the Company's  customers accounted for 31%
         and 12% of the  Company's  sales for the years  ended April 2, 1999 and
         March 27, 1998 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 April 2, 1999.

         International  sales  accounted for less than 1% of sales for the years
         ended April 2, 1999 and March 27, 1998.

         Backlog of Orders/Capital Requirements

         The  backlog  of  orders  for  the  Company's   products   amounted  to
         approximately $1,400,000 at April 2, 1999, as compared to $1,300,000 at
         March 28,  1998. 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  $550,000.  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  which includes  Hypertronics  Corporation  and
         Si-Tac  Connectors,  Inc.  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.  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
                                       8
<PAGE>
         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 an  estimated  $69,600 and $69,500 for the years
         ended  April 2, 1999 and  March  27,  1998,  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 and
         $103,800  for the  years  ended  April 2,  1999  and  March  27,  1998,
         respectively, pursuant to customer sponsored research activities.

         Employees

         The Company presently employs approximately 65 people, four (4) of whom
         are executive officers; three (3) are engaged in management activities;
         three (3) 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 expired on March 31, 1999 and
         was extended until April 30, 1999. On April 15, 1999, the Union and the
         Company  negotiated a new contract 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
<PAGE>
         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 $121,765
         per annum  through  December  1999 and to $9,397 or $112,765  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:
                    -------------------
                    2000                              $121,765
                    2001                               112,765
                                                       -------
                                                      $234,530
                                                      ========

         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 April 2, 1999 for this lease
         was  $180,979.  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  Urban  Development  Corporation  ("NYUDC")  to
         settle certain  matters  related to the lease of its principal  offices
         located in Brooklyn, New York, including a lawsuit brought by the NYUDC
         against the  Company.  The  lawsuit,  entitled  New York City  Economic
         Development Corporation against IEH

                                     10
<PAGE>
         Corporation,  had been  commenced in the Civil Court of the City of New
         York, Kings County (Index No. L&T 88890/97).

         The NYUDC  claimed  that IEH had not paid the proper rent due under its
         lease for the period from  September  1, 1992 through  April 1997.  The
         NYUDC  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 NYUDC
         in the event the  Company  fails to timely  pay  amounts  due under the
         lease and the settlement.

         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 April 2, 1999.

                                       11
<PAGE>
                                     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 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         Low

           Fiscal Year ended April 2, 1999 (1)

           1st Quarter                                       .6875       .3281
           2nd Quarter                                       .3438       .2812
           3rd Quarter                                       .3125       .2812
           4th Quarter                                         .25         .25

           Fiscal Year ended March 27,1998 (1)

           1st Quarter                                       .1565      .15625
           2nd Quarter                                         .25      .15625
           3rd Quarter                                         .25         .25
           4th Quarter                                       .3125         .25


    (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 21, 1999 the high bid and the low bid was 5/16.

                                       12
<PAGE>
         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
         19, 1999 was  approximately  1,252.  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.


                                       13
<PAGE>
         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:

                         Relationship to Total Revenues
<TABLE>
<CAPTION>
                                                                                             April 2,           March 27,
                                                                                               1999             1998
                                                                                            ------------    --------------
<S>                                                                                              <C>               <C>
           Operating Revenues (in thousands)                                                     $4,334            $4,750
                                                                                                 ------            ------
           Operating Expenses:
             (as a percentage of Operating Revenues)

                     Costs of Products Sold                                                       74.2%             72.1%
                       Selling, General and Administrative                                        19.5%             17.6%
                       Interest Expense                                                            3.2%              2.4%
                       Depreciation and amortization                                               6.3%              5.6%
                                                                                                   ----              ----

                              TOTAL COSTS AND EXPENSES                                           103.2%             97.7%

           Operating Income (loss)                                                               (3.2%)              2.3%

           Other Income                                                                              0%                0%
                                                                                                     --                --

           Income (loss) before Income Taxes                                                     (3.2%)              2.3%

           Income Taxes                                                                           (.3%)             (.3%)

           Net Income (loss)                                                                     (3.5%)              2.0%
                                                                                                 ======              ====
</TABLE>
         Year End Results: April 2, 1999 Compared to March 27, 1998

         Operating  revenues  for the year  ended  April  2,  1999  amounted  to
         $4,334,477  reflecting a 8.7% decrease  versus prior year 1998 revenues
         for of  $4,750,099.  The decrease in revenues is a direct result of the
         Company's  continuing  efforts  to  redirect  its sales  efforts to the
         commercial  electronic  market  and  away  from  the  governmental  and
         military procurement sector.

         Cost of products sold amounted to $3,214,927  for the fiscal year ended
         April 2,  1999,  or 74.2%  of  operating  revenues.  This  reflected  a
         decrease of 6.1% in the cost of products sold from $3,424,932 or 72% of
         operating  revenues  for the fiscal  year ended  March 27,  1998.  This
         decrease,  though marginal, is primarily due to management's efforts to
         control manufacturing costs.

         Selling, general and administrative expenses were $847,358 and $835,025
         or 19.5% and 17.6% of  operating  revenues  for the fiscal  years ended
         April 2,  1999 and March  27,  1998,  respectively. This

                                       14
<PAGE>
         category of expense  increased  1.5% from the prior year.  The increase
         can be attributed to increased variable expenses.

         Interest  expense was  $137,766 for the fiscal year ended April 2, 1999
         or 3.2% of  operating  revenues.  For the fiscal  year ended  March 27,
         1998, interest expense was $116,104 or 2.4% of operating revenues.  The
         increase of 18.7% reflects  additional  equipment loans obtained during
         the year.

         Depreciation and amortization of $273,029 or 6.3% of operating revenues
         was reported for the fiscal year ended April 2, 1999.  This reflects an
         increase  of 1.8% from the prior year ended  March 27, 1998 of $268,173
         or 5.6% of operating  revenues.  The increase is a result of additional
         acquisitions of new plant and equipment and computers.

         The Company reported a net loss of $152,824 for the year ended April 2,
         1999  representing  basic  loss of $.066 per share as  compared  to net
         income of $95,651 or $0.42 per share for the year ended March 27, 1998.
         The  net  income  decrease  for the  current  year  can,  in  part,  be
         attributed  to an increase in the costs of products  sold and  interest
         expense.

         Liquidity and Capital Resources

         The Company reported working capital deficit of $188,877 as compared to
         a working  capital of  $102,821  at March 27,  1998.  The  decrease  in
         working capital of $291,698 was attributable to the following items:

          Net income (loss)  (excluding depreciation and amortization)
                                                                       $120,205
          Capital expenditures
                                                                       (306,137)
          Other transactions
                                                                       (105,766)


         As a result of the above,  the current ratio (current assets to current
         liabilities)  was .9 to 1 at April 2, 1999 as  compared  to 1.1 to 1 at
         March 27, 1998.  Current  liabilities at April 2, 1999 were  $1,955,702
         compared to $1,742,860 at March 27, 1998.  This decrease in the current
         ratio is primarily  reflective of a decrease in accounts  receivable as
         well as an  increase in  accounts  payable  and in accounts  receivable
         financed.

         The Company  expensed  $306,137 in capital  expenditures in fiscal 1999
         against depreciation of $273,029 for the year ended April 2, 1999.

         The net loss of  $152,824  for the year ended  April 2, 1999  decreased
         stockholders' equity to $502,192 as compared to stockholders' equity of
         $655,033 at March 27, 1998.

         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 April 2, 1999 the amount  outstanding  was  $759,330  as
         compared to $656,015 at March 27, 1998.

         As of April 2, 1999 and as of March 27,  1998,  the  Company  failed to
         meet the tangible net worth  covenant  contained in its loan  agreement
         with the Urban  Development  Corporation  ("UDC").  The

                                       15
<PAGE>
         Company has not been in  compliance  with this ratio since  fiscal year
         1994.  The Company  received a waiver of this covenant from the UDC for
         the period ending March 31, 1994. The Company has requested a continued
         waiver  from the UDC.  To date,  the UDC has not  declared  an event of
         default.  The Company has been notified that the loan was recently sold
         by UDC 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 UDC.

         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  relative
         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.

                                       16
<PAGE>
         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.

                                       17
<PAGE>
         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  58   Chairman of the Board of Directors and President

         Ralph Acello      62   Vice-President - Production and Director

         Robert Knoth      57   Secretary and Treasurer

         Murray Sennet     76   Director

         Allen Gottlieb    58   Director

         Robert Pittman    74   Director

         Joan Prideaux     66   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.

         Ralph Acello has 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 has held the position since that date.

         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.

                                       18
<PAGE>
         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.

         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 such 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.

                                       19
<PAGE>
Item 10.   Executive Compensation

The following table sets forth below the summary compensation paid or accrued by
the Corporation during the fiscal years ended April 2, 1999, March 27, 1998, and
March 28, 1997 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 Executive officer,
President (1)                                          April 2, 1999     $97,961        -                   0
                                                      March 27, 1998     100,000        -                   0
                                                      March 29, 1997      92,404        -                   0
</TABLE>
(1)      During  the years  ended  April 2, 1999,  March 27,  1998 and March 28,
         1997, 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
         $97,961 for fiscal 1999.

         See  "Employment  Agreements".  No  other  officer  of the  Corporation
         received  compensation  (salary and bonus) in excess of $100,000 during
         the fiscal  years  ended  April 2, 1999 or March 27,  1998 or March 28,
         1997.

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

                                       20
<PAGE>
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.

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 on $92,404 in salary for the fiscal year ended April 2,1998.  Commencing
in September  1997, Mr.  Offerman began  receiving  compensation  at the rate of
$100,000  per year in  accordance  with his  employment  agreement.  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.

In August,  1995,  the Board of Directors  approved  the terms of an  employment
agreement  with Ralph  Acello,  its  Vice-President-Production.  Effective as of
January 1, 1995, the terms of the Employment Agreement provide that Mr. Acello's
salary  will  be  $61,300  per  year  and  that  he  will  be  employed  as Vice
President-Production  of the Company 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 and the use of a full size
automobile  during the term.  The  Company  also  agreed to pay the premium of a
$150,000 term life insurance policy payable to Mr. Acello's beneficiary.  In the
event the Company  declines to enter into a new  employment  agreement  with Mr.
Acello at the  expiration of his term,  the Company has agreed to pay Mr. Acello
the sum of  $45,975.  Additionally,  in the  event  there  occurs a  "change  of
control"  of the  Company,  and within the one (1) year  period  thereafter  Mr.
Acello's  employment  is  terminated  or he  resigns,  then Mr.  Acello  will be
entitled  to  receive  a sum equal to the  balance  of his base  salary  for the
remained of his term plus $45,975.  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

                                       21
<PAGE>
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. Acello the sum of $45,975.

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.

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 $57,000 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.  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 April 2, 1999, March 27, 1998, March 28, 1997.

                                       22
<PAGE>
Item 11.          Security Ownership of Certain Beneficial
                  Owners and Management
                  ----------------------------------------

         The following table sets forth certain  information as of June 25, 1999

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 25, 1999,  there were 2,303,468  shares of Common Stock issued

and outstanding.

                                       24
<PAGE>
<TABLE>
<CAPTION>
                                                              Amount of and Nature
                                  Name and Address of            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 &                                    444,284            19.3%
                             Directors as a Group
                             (4 in number)

</TABLE>
----------
*  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.


                                       25
<PAGE>
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 on Form 8-K

(a)   Exhibits filed with Form 10-KBS:

         See Exhibit List Annexed

(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.







                                       26
<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 29, 1999


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 29, 1999
------------------------------------
Michael Offerman, Chairman of the
Board and President

/s/   Ralph Acello                                                 June 29, 1999
------------------------------------
Ralph Acello
Vice President and Director

/s/  Robert Knoth                                                  June 29, 1999
------------------------------------
Robert Knoth, Secretary and
Treasurer

/s/  Murray Sennet                                                 June 29, 1999
------------------------------------
Murray Sennet, Director


/s/  Robert Pittman                                                June 29, 1999
------------------------------------
Robert Pittman, Director


/s/  Alan Gottlieb                                                 June 29, 1999
------------------------------------
Alan Gottlieb, Director

                                       27
<PAGE>

                                    Contents

                        April 2, 1999 and March 27, 1998
<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                              Number
                                                                                                              ------
<S>                                                                                                           <C>
Report of Independent Certified Public Accountant                                                                21

Financial Statements:

         Balance Sheets as of April 2, 1999 and March 27, 1998                                                 22-23

         Statement of Operations for the twelve months ended April 2, 1999
              and March 27, 1998                                                                                 24

         Statement of Stockholders' Equity as of April 2, 1999 and March 27, 1998                                25

         Statement of Cash Flows for the years ended April 2, 1999 and March 27, 1998                         26-27

Notes to Financial Statements                                                                                 28-36
</TABLE>




                                       28
<PAGE>
                Report of Independent Certified Public Accountant

Board of Directors
IEH Corporation

We have audited the  accompanying  balance sheets of IEH Corporation as of April
2,  1999  and  March  27,  1998  and  the  related   statements  of  operations,
stockholders'  equity  and cash  flows for each of the two  years in the  period
ended  April 2, 1999 and March 27,  1998.  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 April 2,
1999 and March 27, 1998 and the results of its operations and its cash flows for
each of the two years in the period  ended  April 2, 1999 and March 27,  1998 in
conformity with generally accepted accounting principals.


Jerome Rosenberg, CPA, P.C.


                                       29
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     As of April 2, 1999 and March 27, 1998
<TABLE>
<CAPTION>
                                                                                          April 2,               March 27,
                                                                                            1999                   1998
                                                                                                                  (Note1)
                             ASSETS
<S>                                                                                          <C>                   <C>
CURRENT ASSETS:
Cash                                                                                         $15,120               $19,454
Accounts receivable, less allowances for doubtful accounts
   of $10,062 at April 2, 1999 and March 27, 1998                                            810,551               838,721
Inventories (Note 2)                                                                         926,471               949,282
Prepaid expenses and other current assets (Note 3)                                            14,683                38,224
                                                                                              ------                ------

          Total current assets                                                             1,766,825             1,845,681
                                                                                           ---------             ---------


PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation and amortization of
   $4,777,296 at April 2, 1999
   and $4,504,267 at March 27, 1998 (Note 4)                                               1,438,733             1,405,625
                                                                                           ---------             ---------


OTHER ASSETS:
  Prepaid pension cost (Note 10)                                                              43,949                43,949
  Other assets                                                                                46,622                47,429
                                                                                              ------                ------
                                                                                              90,571                91,378
                                                                                              ------                ------


Total assets                                                                              $3,296,129            $3,342,684
                                                                                          ==========            ==========
</TABLE>
                 See accompanying notes to financial statements



                                       30
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     AS of April 2, 1999 and March 27, 1998
<TABLE>
<CAPTION>
                                                                                          April 2,               March 27,
                                                                                            1999                   1998
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                                            <C>                   <C>
CURRENT LIABILITIES:
Accounts receivable financing (Note 5)                                                         $759,330              $656,015
Notes payable, equipment, current portion (Note 8)                                               25,333
                                                                                                             0
Notes payable, current portion (Note 7)                                                          60,798                56,000
Loans payable, current portion (Note 9)                                                          50,693                48,530
Accrued corporate income taxes                                                                   15,352                15,332
Union pension and health & welfare, current portion (Note 11)                                    96,000               120,000
Accounts payable                                                                                769,893               722,957
Other current liabilities (Note 6)                                                              178,303               124,026
                                                                                                -------               -------

          Total current liabilities                                                           1,955,702             1,742,860
                                                                                              ---------             ---------

LONG-TERM LIABILITIES:
Pension Plan payable (Note 11)                                                                  516,966              516,966
Notes payable, equipment, less current portion (Note 8)                                          52,936                    0
Notes payable, less current portion (Note 7)                                                     71,759              132,558
Loan payable, less current portion (Note 9)                                                     133,747              184,440
Union pension & health & health & welfare, less current
   portion (Note 12)                                                                             62,827              110,827
                                                                                                 ------              -------
          Total long-term liabilities                                                           838,235              944,791
                                                                                               --------              -------
          Total liabilities                                                                   2,793,937            2,687,651
                                                                                              ---------             ---------
STOCKHOLDERS' EQUITY:
Common stock,  $.50 par value;  10,000,000 shares  authorized,  2,303,468 shares
   issued  and  outstanding  at April 2, 1999 and  2,303,502  shares  issued and
   outstanding at March 27, 1998
   Note 13)                                                                                   1,151,734            1,151,751
Capital in excess of par value                                                                1,615,874            1,615,874
Retained earnings (Deficit)                                                                 (2,265,416)           (2,112,592)
                                                                                            -----------          -----------
          Total stockholders' equity                                                            502,192              655,033
                                                                                                -------              -------

          Total liabilities and stockholders' equity                                         $3,296,129           $3,342,684
                                                                                              =========            =========
</TABLE>
                 See accompanying notes to financial statements



                                       31
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                               Years Ended
                                                                                       April 2,             March 27,
                                                                                         1999                  1998
                                                                                   -----------------     -----------------
<S>                                <C>                                               <C>                   <C>
          REVENUE, net sales (Note 15)                                               $4,334,477            $4,750,099
                                                                                      ---------             ---------

          COSTS AND EXPENSES:

            Cost of products sold                                                       3,214,927             3,424,932
            Selling, general and administrative                                           847,358               835,025
            Interest expense                                                              137,766               116,104
            Depreciation and amortization                                                 273,029               268,173
                                                                                          -------               -------
                                                                                        4,473,080             4,644,234
                                                                                        ---------             ---------

          OPERATING INCOME (LOSS)                                                        (138,603)              105,865

          OTHER INCOME                                                                        810                 1,131

          INCOME (LOSS) BEFORE INCOME TAXES                                              (137,793)              106,996

          PROVISION FOR INCOME TAXES                                                        15,031               11,345
                                                                                            ------               ------

          NET INCOME (LOSS)                                                              $(152,824)             $95,651
                                                                                         =========               ======

          Basic and Diluted Earnings per common share (Note 1)                              $(.066)               $.042
                                                                                             ======                ====
          Weighted average number of  common shares
            outstanding (in thousands)                                                       2,303                2,303
                                                                                             =====                =====
</TABLE>
                 See accompanying notes to financial statements



                                       32
<PAGE>

                                 IEH CORPORATION

                        STATEMENT OF STOCKHOLDERS' EQUITY
               For the Years Ended April 2, 1999 and March 27,1998
<TABLE>
<CAPTION>
                                                                                        Capital in Excess        Retained Earnings
                                                           Common Stock                   of Par Value               (Deficit)
                                                 ----------------------------------    --------------------    -------------------
                                                     Shares             Amount
                                                 ---------------    ---------------
<S>                                                 <C>             <C>                         <C>            <C>
Balances, March 28, 1997                            2,303,502       $1,151,751                  $1,615,874     $(2,208,243)
Net Income: Year ended March 27,1998
                                                                                                                    95,651
                                                 ---------------    ---------------    --------------------    -------------------
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)
                                                   ==========        =========                   =========
</TABLE>



                 See accompanying notes to financial statements


                                       33
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
           For the Twelve Months Ended April 2, 1999 and March 27,1998
<TABLE>
<CAPTION>
                                                                                           Years  Ended
                                                                                 ----------------------------------
                                                                                     April  2,        March 27,
                                                                                       1999             1998
                                                                                 ---------------- -----------------
<S>                                                                                <C>                    <C>
CASH FLOWS FROM  OPERATING  ACTIVITIES:
 Net income (loss)                                                                 $(152,824)             $95,651

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

  Depreciation and amortization                                                      273,029              268,173

Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                                          28,170             (186,848)
  (Increase) decrease inventories                                                     22,811              157,818
  (Increase) decrease in prepaid expenses and other current assets                    23,541               14,405
  (Increase) decrease in other receivables                                                 0               30,492

  (Increase) decrease in other assets                                                    807                  369

  (Decrease) increase in accounts payable                                             46,937             (351,946)
  (Decrease) increase in other current liabilities                                    54,277               (7,809)

  Increase in accrued corporate income taxes                                              20                 7,115
  (Decrease) in due to union pension & health & welfare                              (72,000)              (83,664)
                                                                                     --------              --------

               Total adjustments                                                     377,592              (151,895)
                                                                                     -------              ---------

NET CASH PROVIDED BY (USED) FOR OPERATING ACTIVITIES                                 224,768               (56,244)
                                                                                     -------               --------
CASH FLOWS FROM INVESTING ACTIVITIES:

   Acquisition of property, plant and equipment                                    (306,137)             (192,957)
                                                                                   ---------             ---------

          NET CASH USED IN INVESTING ACTIVITIES                                   $(306,137)            $(192,957)
                                                                                   ---------             ---------
</TABLE>
                 See accompanying notes to financial statements

                                       34
<PAGE>
                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
           For the Twelve Months Ended April 2, 1999 and March 27, 1998
<TABLE>
<CAPTION>
                                                                                           April 2,              March 27,
                                                                                             1999                  1998
                                                                                      -------------------     ----------------
<S>                                                                                         <C>                <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Retirement of common shares                                                                 $    (17)          $      0

Principal payments on notes payable                                                          (49,231)           (63,928)
Increase in notes payable                                                                     86,195            236,000
Proceeds from accounts receivable financing                                                  103,315            119,558
Principal payments on loan payable                                                           (48,530)           (52,946)
                                                                                            --------           --------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                                                                                              77,035            253,381
                                                                                            --------           --------
INCREASE (DECREASE) IN CASH                                                                   (4,334)             4,180

CASH, beginning of period                                                                     19,454             15,274
                                                                                            --------           --------

CASH, end of period                                                                         $ 15,120           $ 19,454
                                                                                            ========           ========

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

     Interest                                                                              $ 137,766           $116,104
                                                                                           =========           ========

     Income Taxes                                                                          $  15,031           $ 11,345
                                                                                           =========           ========
</TABLE>
                 See accompanying notes to financial statements



                                       35
<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 April 2, 1999 was  comprised of 53
                  weeks and the year ended  March 27, 1998 was  comprised  of 52
                  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  $100,000  in  aggregate.  There  were  no
                  uninsured balances at either April 2, 1999 or March 27, 1998.

                  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.

                                       36
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

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

                  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 April 2, 1999 and March 27,  1998,  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.

                  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

                                       37
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

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

                  Impairment of Long-Lived Assets: (continued)

                  carrying  amount  of an  asset  may  not be  recoverable.  The
                  Company  has  adopted  SFAS No. 121  effective  April 2, 1999.
                  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.

                  Effect of New Accounting Pronouncements:

                  During  1998  the  American   Institute  of  Certified  Public
                  Accountants   issued   Statement   of  Position   (SOP)  98-1,
                  "Accounting  for the Costs of Computer  Software  Developed or
                  Obtained  for  Internal  Use".  The  Statement   requires  the
                  capitalization  of internal  use  computer  software  costs if
                  certain criteria are met. The capitalized  software costs will
                  be amortized on a straight-line  basis over the useful life of
                  the software. The Company will adopt the Statement as of April
                  3, 1999. The adoption of the Statement is not expected to have
                  a material impact on the Company's financial statements.

                  In April 1998,  the American  Institute  of  Certified  Public
                  Accountants  Accounting  Standards  Executive Committee issued
                  Statement of Position  (SOP) 98-5,  "Reporting On The Costs Of
                  Start-Up  Activities".  The SOP, which is effective for fiscal
                  years beginning after


                                       38
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

                  December 15, 1998, requires entities to expense start-up costs
                  and  organization   costs  for  establishing  new  operations.
                  Management  does not expect this  Statement  to  significantly
                  impact the Company's financial statements.

Note 2 -          INVENTORIES:

                  Inventories are comprised of the following:

                                                   April 2,         March 27,
                                                     1999             1998
                                                 -------------    --------------

                    Raw materials                  $702,176          $651,975
                    Work in progress                122,606            99,523
                    Finished goods                  101,689           197,784
                                                    -------           -------

                                                   $926,471          $949,282
                                                   ========          ========


Note 3 -          PREPAID EXPENSES AND OTHER CURRENT ASSETS:

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

                                                April 2,          March 27,
                                                  1999               1998
                                               ------------    -----------------

                    Prepaid insurance              $14,077           $34,356
                    Other current assets               606             3,868
                                                       ---             -----

                                                   $14,683           $38,224
                                                   =======           =======


                                       39
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 4 -          PROPERTY, PLANT AND EQUIPMENT:

                  Property, plant and equipment are as follows:
<TABLE>
<CAPTION>
                                                                       April 2,            March 27,
                                                                         1999                 1998
                                                                    ----------------    -----------------
<S>                                                                     <C>                   <C>
                    Computers                                           $161,896              $53,590
                    Leasehold improvements                               583,206              568,006
                    Machinery and equipment                            3,854,973            3,757,381
                    Tools and dies                                     1,455,938            1,370,899
                    Furniture and fixture                                148,770              148,770
                    Transportation equipment                              11,246               11,246
                                                                          ------               ------

                                                                       6,216,029            5,909,892

                    Less: accumulated depreciation and
                    amortization                                       4,777,296            4,504,267
                                                                       ---------            ---------

                                                                      $1,438,733           $1,405,625
                                                                      ==========           ==========
</TABLE>


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  (8.75%)  at April 2,  1999,  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.



                                       40
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 6 -          OTHER CURRENT LIABILITIES:

                  Other current liabilities are comprised of the following:

                                                    April 2,          March 27,
                                                     1999              1998
                                                 -------------    --------------
                   Payroll and vacation accruals      $77,787           $28,300
                   Sales commissions                   21,178             9,574
                   Pension plan payable                65,489            65,489
                   Other                               13,849            20,663
                                                 -------------    --------------

                                                     $178,303          $124,026
                                                     ========          ========
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 April 2, 1999 was $132,557,  with $60,798
                  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 April 2, 1999
                  amounted to $78,269.

                  Aggregate future principal payments are as follows:

                    2000                         $15,597
                    2001                          15,597
                    2002                          15,597
                    2003                          15,597
                    Thereafter                    15,881
                                                  ------
                                                 $78,269
Note 9 -          LOAN PAYABLE:

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



                                       41
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 9 - LOAN PAYABLE  (continued):

                  The balance remaining at April 2, 1999 was $184,440.

                  Aggregate future principal payments are as follows:

                  Fiscal Year Ending March:
                  2000                                        $50,693
                  2001                                         54,289
                  2002                                         58,795
                  2003                                         20,663
                                                               ------
                                                             $184,440

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

                  As of April 2, 1999, 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 $502,192. The ratio
                  of current assets to current liabilities was .9 to 1.0.

                  The  Company  has  applied  for  additional  waivers  of  this
                  covenant.  Neither  the UDC or WAMCO  XXIV 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.

Note 10 -         INCOME TAXES:

                  The Company has available at April 2, 1999, for federal income
                  tax  purposes,   a  net   operating   loss   carryforward   of
                  approximately  $2,150,000  of which  approximately  $1,300,000
                  will expire in 2007 with the balance in 2010. In addition, the
                  Company has unused  investment  tax  credits of  approximately
                  $86,000 which expire between 1999 and 2002.

Note 11 -         PENSION PLAN-SALARIED PERSONEL:

                  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


                                       42
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 11 - PENSION PLAN - SALARIED PERSONNEL (continued):

                  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 April 2, 1999 and March 27,  1998,  $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:

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

                  The total amount claimed by the PBGC amounts to $700,745.

                  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.

Note 12 -         COMMITMENTS:

                  The  Company  had  entered  into  employment  agreements  with
                  certain  of  its  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



                                       43
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 12 -         COMMITMENTS:

                  $ 10,397 or $121,765 per annum  through  December  1999 and to
                  $9,397 or $112,765  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:

                    2000                              $121,765
                    2001                               112,765
                                                       -------
                                                      $234,530
                                                      ========

                  The net rental  expense  for the year ended  April 2, 1999 for
                  this lease was $180,979.

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

                  The Company has with the United Auto Workers of America, Local
                  259, a  collective  bargaining  multi-employer  pension  plan.
                  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 $35,640 for
                  the year ended  April 2, 1999 and  $40,176  for the year ended
                  March 27, 1998.

                  As of April 2, 1999, the Company reported arrears with respect
                  to its  contributions  to the  Union's  health and welfare and
                  pension plans.  The amount due the health and welfare plan was
                  $155,189 and the amount due the pension plan was $3,638.

                  The  total   amount  due  of   $158,827  is  reported  on  the
                  accompanying balance sheet in two components; $96,000 reported
                  as a current liability and $62,827 as a long-term liability.



                                       44
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


                  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:

                  The  Company  retired 34 shares of its issued and  outstanding
                  common stock during the quarter ended September 25, 1998.

                  Retained  earnings  (deficit)  increased  by  $152,824,  which
                  represents  the net loss for the twelve  months ended April 2,
                  1999.

Note 14 -         YEAR 2000 COMPUTER ISSUE:

                  The Company does not believe that the year 2000 computer issue
                  will have a significant  impact on its operations or financial
                  position. The Company has allocated  approximately $110,000 to
                  upgrade  its  computer  operations  to obviate  any  potential
                  problems  that  might  arise as a result of the  impact of the
                  year 2000.  To date,  the Company has  acquired  new  computer
                  equipment at a cost of $108, 306. However, if internal systems
                  do not  correctly  recognize  date  information  when the year
                  changes  to 2000,  there  could be an  adverse  impact  on the
                  Company's operations.  Furthermore, there can be no assurances
                  that another  entity's  failure to ensure year 2000 capability
                  would not have an adverse effect on the Company.

Note 15 -         REVENUES FROM MAJOR CUSTOMERS:

                  In the fiscal year ended  April 2, 1999,  more than 31% of the
                  Company's total revenues were earned from one customer.  Total
                  sales to this customer were approximately $1,307,000.

                                       42
<PAGE>
                                    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].



                                       45
<PAGE>
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]

11.                           Statement re:Computation of per share earnings

21.                           Subsidiaries: None

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

27*                           EDGAR Financial Date Schedule



                                       46
<PAGE>
99.1                          Stipulation  and Escrow  Agreement  dated December
                              18,  1997  between  the Company and New York Urban
                              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]

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