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

For the fiscal year ended March 28, 2003

|_|   Transition report under Section 13 or 15(d) of the Securities Exchange Act
      of 1934

      For the transition period from __________________ to _________________

      Commission file number 0-5278

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

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

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

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

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

Title of each Class                    Name of Each Exchange on Which Registered
      None                                               None

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

                          Common Stock, $.01 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 Registrant was required
to file such reports),and (2) has been subject to such filing requirements for
past 90 days.

                                 Yes |X| No |_|


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<PAGE>

      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.

                                 Yes |X| No |_|

      The Registrant's revenues for its most recent fiscal year ended March 28,
2003 were $4,727,399.

      On July 1, 2003, the aggregate market value of the voting stock of
Registrant held by non-affiliates of Registrant (consisting of Common Stock,
$.01 par value) computed by reference to the closing price at which the stock
was sold on July 1, 2003 (the date of the last reported transaction) ($0.26) was
approximately $262,413.

      As of June 30, 2003, there were 2,303,468 shares of Common Stock issued
and outstanding


                                      -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 relay
information between electronic components and circuit boards, enabling the
commands that are input by the user to be performed. Electronic connectors, in
essence, enable circuit boards and electronic components to communicate with
each other, via direct electrical connection. Connectors also are fundamental to
modular construction of electronic assemblies enabling the disconnection and
removal of circuit boards and other electronic components for testing, repair,
and replacement.

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

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

The Company's Product Line

The Company primarily manufactures printed circuit board connectors that meet
military or individual customer specifications. Certain of the Company's
manufacturing and sales involve the competitive bidding process because of the
military and/or government status of customers. The Company also


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<PAGE>

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 March 28, 2003, 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 20% and 79%, respectively, of
the Company's net sales for the year ended March 28, 2003. Approximately 1% of
the Company's net sales for the year March 28, 2003, were made internationally.

New Product Development

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


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<PAGE>

The new development process with this commercial client has led to substantial
repeat business in the past fiscal year. The Company now has the ability to
introduce this line to other commercial accounts.

The Company has also recently commenced production of two new connectors for the
aerospace industry. To date early orders for pre-production units have been
completed and the Company is awaiting commencement of production.

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

Several years ago, the Company designed and developed a form of compliant
termination connector, which is named, "COMTAC". This product, which utilizes
technology known as "Solderless Pin Technology", does not require the soldering
of connector pins, but instead utilizes a spring type locking system in
attaching the connector to the printed circuit board. This technology was
patented in the United States under patent No. 4,720,268 and assigned to the
Company on January 19, 1988. During the fiscal year ended March 28, 2003 sales
of the COMTAC connectors accounted for over 12% of the Company's total sales.
The Company has sent pre-production units for evaluation to certain customers
and potential customers. Although there can be no assurance of future sales, the
Company is optimistic that this new technology will lead to an increase in
sales.

Commitments

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

In April 1997, the Company was informed by the UDC that the loan was sold and
conveyed to WAMCO XXIV, Ltd. All of the terms and conditions of the loan
remained in effect. The loan was paid in full in September, 2002.

The Company has a collective bargaining multi-employer pension plan with the
United Auto Workers of America, Local 259. Contributions are made in accordance
with a negotiated labor contract and are based on the number of covered
employees employed per month. With the passage of the Multi-Employer Pension
Plan Amendments Act of 1990 ("The Act"), the Company may become subject to
liabilities in excess of contributions made under the collective bargaining
agreement. Generally, these liabilities are contingent upon the termination,
withdrawal, or partial withdrawal from the Plan. The Company has not taken any
action to terminate, withdraw or partially withdraw from the Plan nor does it
intend to do so in the future. Under the Act, liabilities would be based upon
the Company's proportional share of the Plan's unfunded vested benefits which is
currently not available. The amount of accumulated benefits and net assets of
such Plan also is not currently available to the Company. The total
contributions charged to operations under this pension plan were $43,019 for the
year ended March 28, 2003 and $38,384 for the year ended March 29, 2002.

As of March 28, 2003, the Company reported arrears with respect to its
contributions to the Union's health and welfare plan. The amount due the health
and welfare plan was $43,828. The total amount due of $43,828 is reported on the
accompanying balance sheet in as follows, $30,000 as a current liability and
$13,828 as a long term liability.


                                      -5-
<PAGE>

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.

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.

The Company and the PBGC have agreed to the terms of a settlement of the matter.
The agreement is effective July 2, 2001. Under the agreement, the Company and
the PBGC agreed on a total sum of $244,000. The Company has agreed to make
payments as follows:

                September 1, 2003 to August 1, 2004            $2,000 per month
                September 1, 2004 to August 1, 2006            $3,000 per month
                September 1, 2006 to August 1, 2007            $4,000 per month

In addition, the Company will make balloon payments of $25,000 each on the
following dates:

                January 1, 2004
                May 1, 2004
                May 1, 2005
                January 1, 2006

Marketing and Sales

The Company will also grant the PBGC a lien on the Company's machinery and
equipment, subject to the preexisting liens in favor of the UDC.

As a result of this agreement the amount due the PBGC has been restated to
$244,000 and is reported as follows: $39,000 as a current liability and $205,000
as a long term liability.

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


                                      -6-
<PAGE>

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.

The Company is primarily a manufacturer and its products are essentially basic
components of larger assemblies of finished goods. Approximately 94% of the
Company's net sales for the years ended March 28, 2003 and March 29, 2002,
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.

One (1) of the Company's customers accounted for 20% and 17% of the Company's
net sales for the years ended March 28, 2003 and March 29, 2002, respectively.

The Company currently employs 16 independent sales representatives to market its
products in all regions in the United States.

Backlog of Orders/Capital Requirements

These independent sales representatives also promote the product lines of other
electronics manufacturers; however, they do not promote the product lines of
competitors which compete directly with the Company's products. These sales
representatives accounted for approximately 94% of Company sales (with the
balance of Company sales being generated via direct customer contact) for the
year ended March 28, 2003.

International sales accounted for less than 1% of sales for the years ended
March 28, 2003 and March 29, 2002.

The backlog of orders for the Company's products amounted to approximately
$1,900,000 at March 28, 2003, as compared to $2,200,000 at March 29, 2002. 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 Company does not foresee any problems which
would prevent it from fulfilling its orders.


                                      -7-
<PAGE>

Competition

The design, development, manufacture and distribution of electrical connectors
and interconnection devices is a highly competitive field. The Company
principally competes with companies who produce high performance connectors in
printed circuits and wireboards for high technology application. The Company
competes with respect to their abilities to adapt certain technologies to meet
specific product applications; in producing connectors cost-effectively; and in
production capabilities. In addition, there are many companies who offer
connectors with designs similar to those utilized by the Company and are direct
competitors of the Company.

The primary basis upon which the Company competes is product performance and
production capabilities. The Company usually receives job orders after
submitting bids pursuant to customer-issued specifications. The Company also
offers engineering services to its customers in designing and developing
connectors for specialized products and specific customer applications. This
enables the Company to receive a competitive advantage over those companies who
basically manufacture connectors based solely or primarily on cataloged
specifications. Many of the Company's competitors have greater financial
resources, market penetration and experience than the Company and no assurances
can be given that the Company will be able to compete effectively with these
companies in the future.

Suppliers of Raw Materials and Component Parts

The Company utilizes a variety of raw materials and manufactured component parts
which it purchases from various suppliers. These materials and components are
available from numerous sources and the Company does not believe that it will
have a problem obtaining such materials in the future. However, any delay in the
Company's ability to obtain necessary raw materials and component parts may
affect its ability to meet customer production needs. In anticipation of such
delays, the Company carries an inventory of raw materials and component parts to
avoid shortages and to insure continued production.

Engineering/Research & Development

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

The Company expended $48,000 and $47,600 for the years ended March 28, 2003 and
March 29, 2002, 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 $48,000 in
revenues for the year ended March 28, 2003 and $47,600 for the year ended March
29, 2002, respectively, pursuant to customer sponsored research activities.


                                      -8-
<PAGE>

Employees

The Company presently employs approximately 76 people, two (2) of whom are
executive officers; two (2) are engaged in management activities; four (4)
provide general and administrative services and approximately 68 are employed in
manufacturing and testing activities. The employees engaged in manufacturing and
testing activities are covered by a collective bargaining agreement with the
United Auto Workers of America, Local 259 (the "Union") which expires on March
31, 2006. 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.

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

The Company exercised its option to renew its lease on the premises for 10
years. The original lease ran through August 23, 2001.

The Company is obligated under this renewal through August 23, 2011, at minimum
annual rentals as follows:

      Fiscal year ending March:

      2004                                   $      112,764
      2005                                          112,764
      2006                                          112,764
      2007                                          112,764
      2008                                          112,764
      2009                                          112,764
      2010                                          112,764
      2011                                           75,176
                                             --------------

                                             $      864,524
                                             ==============


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<PAGE>

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 rental expense for the year ended March 28, 2003 for this lease was
$112,764. 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.

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.

Item 4. Submission of Matters to Vote of Security Holders

No matters were submitted to shareholders during the fourth quarter for the
fiscal year ended March 28, 2003.


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

Market Information

The range of high and low bid prices for the Company's Common Stock, for the
periods indicated as set forth below. For the period to October 29, 1991, the
Company was listed on the NASDAQ National Market System. On October 29, 1991,
the Company's Common Stock was delisted from the NASDAQ National Market System
and from October 29, 1991 to January 11, 1993, the Company's Common Stock was
listed on the NASDAQ SmallCap Market System. On January 11, 1993, the Company's
Common Stock was delisted from the NASDAQ SmallCap Market System and on January
13, 1993, the Company's Common Stock was first quoted over the Electronic
Bulletin Board (OTCBB) and continues to be traded on the 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 March 28, 2003

         1st Quarter                                        .18             .13
         2nd Quarter                                        .25             .12
         3rd Quarter                                        .19             .11
         4th Quarter                                        .13             .08

         Fiscal Year ended March 29, 2002 (1)

         1st Quarter                                        .20             .11
         2nd Quarter                                        .23             .14
         3rd Quarter                                        .15             .14
         4th Quarter                                        .20             .13

(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. The Company's stock is not widely
traded or held and trading is sporadic.

On July 1, 2003 the high bid for the Common Stock was $.26 and the low bid was
$.26.


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<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 23, 2003
was approximately 1,208. 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.

Equity Compensation Plan Information

The Board of Directors unanimously approved adoption of the 2001 Employee Stock
Option Plan (the "2001 Plan") to provide for the grant of options to purchase up
to 750,000 shares of the Company's common stock to all employees, including
senior management and other eligible persons. Under the terms of the proposed
2001 Plan, options granted thereunder may be designated as options which qualify
for incentive stock option treatment ("ISOs") under Section 422 of the Code, or
options which do not so qualify ("Non-ISO's"). The 2001 Plan was approved by
shareholders at the annual meeting held on September 21, 2002.

No options have been issued under the Plan. The Company has no other equity
compensation plan under which equity securities are authorized for issuance and
no equity securities have been issued as compensation during the fiscal year
ended March 28, 2003.


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<PAGE>

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

Statements contained in this report which are not historical facts may be
considered forward looking information with respect to plans, projections, or
future performance of the Company as defined under the Private Securities
litigation Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
form those projected. The words "anticipate," "believe", "estimate", "expect,"
"objective," and "think" or similar expressions used herein are intended to
identify forward-looking statements. The forward-looking statements are based on
the Company's current views and assumptions and involve risks and uncertainties
that include, among other things, the effects of the Company's business, actions
of competitors, changes in laws and regulations, including accounting standards,
employee relations, customer demand, prices of purchased raw material and parts,
domestic economic conditions, including housing starts and changes in consumer
disposable income, and foreign economic conditions, including currency rate
fluctuations. Some or all of the facts are beyond the Company's control.

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and related footnotes which provide additional
information concerning the Company's financial activities and condition.

Critical Accounting Policies

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 years ended March
28, 2003 and March 29, 2002 were comprised of 52 weeks.

Revenue Recognition:

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

The Company's policy with respect to customer returns and allowances as well as
product warranty is as follows:

The Company will accept a return of defective product within one year from
shipment for repair or replacement at the Company's option.

If the product is repairable, the Company at its own cost will repair and return
it to the customer. If unrepairable, the Company will either offer an allowance
against payment or will reimburse the customer for the total cost of the
product.

Most of the Company's products are custom ordered by customers for a specific
use. The Company provides engineering services as part of the relationship with
its customers in developing the custom product. The Company is not obligated to
provide such engineering service to its customers. The Company does not charge
separately for these services.

Inventories:

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


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<PAGE>

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 March 28, 2003 or March 29, 2002.

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 Modified Accelerated Cost Recovery System (MACRS) method over the estimated
useful lives (5-7 years) of the related assets.

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

Income Taxes:

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

Net Income Per Share:

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

Diluted earnings per share is similar to basic earnings per share except that
the weighted average number of common shares outstanding is increased to reflect
the dilutive effect of potential common shares, such as those issuable upon the
exercise of stock or warrants, as if they had been issued. For the years ended
March 28, 2003 and March 29, 2002, there were no items of potential dilution
that would impact on the computation of diluted earnings or loss 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 due to the relatively short maturity (three months) of these instruments.

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.


                                      -14-
<PAGE>

Impairment of Long-Lived Assets:

SFAS No. 121, "Accounting For The Impairment of Long-Lived Assets To Be Disposed
Of", requires that long-lived assets and certain identifiable intangibles to be
held and used by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company has adopted SFAS No. 121. There were no long-lived
asset impairments recognized by the Company for the years ended March 28, 2003
and March 29, 2002.

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. There were no material items of
comprehensive income to report for the years ended March 28, 2003 and March 29,
2002.

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 Company's presentation of its results of
operations or financial position.


                                      -15-
<PAGE>

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>
                                                           March 28,      March 29,
                                                             2003           2002
                                                           ---------      ---------
<S>                                                        <C>            <C>
      Operating Revenues (in thousands)                    $  4,727       $  4,338
                                                           --------       --------

      Operating Expenses:
        (as a percentage of Operating Revenues)

                Costs of Products Sold                         73.4%          73.9%
                  Selling, General and Administrative          18.5%          18.7%
                  Interest Expense                              2.7%           3.3%
                  Depreciation and amortization                 4.3%           5.6%
                                                           --------       --------

                         TOTAL COSTS AND EXPENSES              98.9%         101.5%
                                                           --------       --------

      Operating Income (loss)                                   1.1%          (1.5%)

      Other Income                                               --             .2
                                                           --------       --------

      Income (loss) before Income Taxes                         1.1%          (1.3%)

      Income Taxes                                               .1%            --
                                                           --------       --------

      Net Income (loss)                                         1.0%          (1.3%)
                                                           ========       ========
</TABLE>

Year End Results: March 28, 2003 vs. March 29, 2002

Operating revenues for the year ended March 28, 2003 amounted to $4,727,399
reflecting a 9.0% increase versus the year ended March 29, 2002 revenues of
$4,338,012. The increase in revenues is a direct result of an increase in
military sales.

The Company is primarily a manufacturer and its products are essentially basic
components of larger assemblies of finished goods. Approximately 94% of the
Company's net sales for the fiscal year ended March 28, 2003 and March 29, 2002
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.

For the fiscal year ended March 28, 2003, one of the Company's customers
accounted for approximately 20% of total sales. The same customer accounted for
approximately 17% of sales in the fiscal year ended March 29, 2002.


                                      -16-
<PAGE>

The Company currently employs 16 independent sales representatives to market its
products in all regions of the United States. These sales representatives
accounted for approximately 94% of the Company's sales, with the balance of
sales being generated by direct customer contact.

For the fiscal year ended March 28, 2003, the Company's principal customers
included manufacturers of commercial electronic products, military defense
contractors and distributors who service these markets. Sales to the commercial
electronic and military defense markets comprised 20% and 79% of the Company's
net sales for the year ended March 28, 2003 and 26% and 73% for the year ended
March 29, 2002 respectively. Approximately 1% of net sales were made to
international customers.

Cost of products sold amounted to $3,468,278 for the fiscal year ended March 28,
2003, or 73.4% of operating revenues. This reflected a $260,633 or 8.1% increase
in the cost of products sold from $3,207,645 or 73.9% of operating revenues for
the fiscal year ended March 29, 2002. This increase is due primarily to the cost
increase necessary to support the increase in sales.

Selling, general and administrative expenses were $872,541 and $808,935 or 18.5%
and 18.7% of operating revenues for the fiscal years ended March 28, 2003 and
March 29, 2002, respectively. This category of expense increased by $63,606 or
7.8% from the prior year. The increase can be attributed to an increase in sales
salaries and commissions.

Interest expense was $128,654 for the fiscal year ended March 28, 2003 or 2.7%
of operating revenues. For the fiscal year ended March 29, 2002, interest
expense was $143,909 or 3.3% of operating revenues. The decrease of $15,255 or
10.6% reflects less equipment loans entered into and lower interest rates during
the year ended March 28, 2003.

Depreciation and amortization of $203,670 or 4.3% of operating revenues was
reported for the fiscal year ended March 28, 2003. This reflects a decrease of
$40,680 or 16.6% from the prior year ended March 29, 2002 of $244,350 or 5.6% of
operating revenues. The decrease is the result of several fixed assets being
fully depreciated during the current fiscal year.

The Company reported net income of $51,441 for the year ended March 28, 2003
representing basic earnings of $.02 per share as compared to a net loss of
$58,009 or $.03 per share for the year ended March 29, 2002. The net income
increase for the current year can be attributed to an increase in military
sales.

Liquidity and Capital Resources

The Company reported a working capital deficit of $74,495 as of March 28, 2003
compared to a working capital deficit of $23,592. The decrease in working
capital of $50,903 was attributable to the following items:

      Net income (loss) (excluding depreciation and amortization)     $ 255,111
      Capital expenditures                                             (222,452)
      Other transactions                                                (83,562)

As a result of the above, the current ratio (current assets to current
liabilities) was .97 to 1 at March 28, 2003 as compared to .99 to 1 at March 29,
2002. Current liabilities at March 28, 2003 were $1,992,702 compared to
$1,851,735 at March 29, 2002.


                                      -17-
<PAGE>

The Company reported $222,452 in capital expenditures in fiscal 2002 and
reported depreciation of $203,670 for the year ended March 28, 2003.

The net income of $51,441 for the year ended March 28, 2003 increased
stockholders' equity to $860,798 as compared to stockholders' equity of $809,357
at March 29, 2002.

The Company has an accounts receivable financing agreement with a factor which
bears interest at 2.5% above prime with a minimum of 12% per annum. At March 28,
2003 the amount outstanding with the factor was $712,659 as compared to $676,181
at March 29, 2002. The financing agreement is secured by a lien of the Company's
accounts receivable and inventories.

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 was payable over ten years, with interest rates
progressively increasing from 4% to 8% per annum. The loan was paid in full in
September 2002.

The Company has a collective bargaining multi-employer pension plan with the
United Auto Workers of America, Local 259. Contributions are made in accordance
with a negotiated labor contract and are based on the number of covered
employees employed per month. With the passage of the Multi-Employer Pension
Plan Amendments Act of 1990, the 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 $43,019 for the year ended March 28,
2003 and $38,384 for the year ended March 29, 2002.

As of March 28, 2003, the Company reported arrears with respect to its
contributions to the Union's health and welfare plan. The amount due the health
and welfare plan was $43,828. This amount is reported in two parts on the
accompanying balance sheet as follows, $30,000 as a current liability and
$13,828 as a long term liability.

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.

The Company and the PBGC have agreed to the terms of a settlement of the matter.
The agreement is effective July 2, 2001. Under the agreement, the Company and
the PBGC agreed on a total sum of $244,000. The Company has agreed to make
payments as follows:

            September 1, 2003 to August 1, 2004                 $2,000 per month
            September 1, 2004 to August 1, 2006                 $3,000 per month
            September 1, 2006 to August 1, 2007                 $4,000 per month


                                      -18-
<PAGE>

In addition, the Company will make balloon payments of $25,000 each on the
following dates:

            January 1, 2004
            May 1, 2004
            May 1, 2005
            January 1, 2006

The Company will also grant the PBGC a lien on the Company's machinery and
equipment, subject to the preexisting liens in favor of the UDC.

As a result of this agreement the amount due to the PBGC has been restated to
$244,000 and is reported as follows: $39,000 as a current liability and $205,000
as a long term liability.

Effects of Inflation

The Company does not view the effects of inflation to have a material effect
upon its business. Increases in costs of raw materials and labor costs have been
offset by increases in the price of the Company's products, as well as
reductions in costs of production, reflecting management's efforts in this area.
While the Company has in the past increased its prices to customers, it has
maintained its relatively competitive price position. However, significant
decreases in government and military subcontractor spending has provided excess
production capacity in the industry which in turn has tightened pricing margins.

Item 7. Financial Statements

See Index to Financial Statements attached hereto.

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

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


                                      -19-
<PAGE>

                                    PART III

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

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

         Name            Age                    Office

   Michael Offerman       62    Chairman of the Board of Directors and President

   Robert Knoth           61    Secretary and Treasurer

   Murray Sennet          80    Director

   Allen Gottlieb         62    Director

   Robert Pittman         78    Director

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

Executive Officers and Directors

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

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

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

Allen Gottlieb has been a member of the Company's Board of Directors since 1992.
Mr. Gottleib is engaged in the practice of law outside of the United States and
has been so engaged for the last five years. In 1998, Mr. Gottlieb was disbarred
from the bar association of New York. In February 2003, Mr. Gottlieb was
convicted in the United States District Court of New York (Securities and
Exchange Commission v. Stewart et al. 98 Civ. 2636 (S.D.N.Y. ) of violating the
antifraud provisions of Section 17A of the Securities Act of 1933, Section 10(b)
of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and
permanently enjoined from future violations.

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.


                                      -20-
<PAGE>

Significant Employees

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.

Mark Iskin is the Director of Purchasing, a position he has held since September
2000. Prior to joining the Company, Mr. Iskin worked as a materials and
purchasing specialist in manufacturing and distribution companies. In his last
position with an industrial distributor, Mr. Iskin was responsible for
purchasing and managing vendors for the cutting tool section of the catalog. In
addition he participated in setting up and developing the company's
forecasting/planning software related to that department procedures.

Jeff (Yefim) Berenstein is the quality control manager, a position he started on
April 16, 2002. Prior to joining the Company Mr. Berenstein worked as a quality
assurance specialist for various manufacturing companies where he was
responsible for the implementation of quality systems - ISI-9000, Mil-I-45208A
writing quality manuals, quality procedures, work instructions, design special
gigs, testing equipment to improve quality of the manufacturing products,
maintaining and supervising calibration and calibration recall systems.

Section 16 of the Exchange Act; Certain Reports

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers and persons who own, directly or indirectly, more than
10% of a registered class of the Corporation's equity securities, to file with
the Securities and Exchange Commission ("SEC") reports of ownership and reports
of changes in ownership of Common Stock of the Corporation.

Officers, directors and greater than 10% shareholders are required to furnish
the Company with copies of all Section 16(a) reports that they file. Based
solely on review of the copies of such reports received by the Company, the
Company believes that filing requirements applicable to officers, directors and
10% shareholders were complied with during the fiscal year.

Item 10. Executive Compensation

The following table sets forth below the summary compensation paid or accrued by
the Corporation during the fiscal years ended March 28, 2003, March 29, 2002,
and March 30, 2001 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)                                            March 28, 2003          $ 95,500        --                0
                                                             March 29, 2002            91,826        --                0
                                                             March 30, 2001            91,431        --                0
</TABLE>

(1)   During the years ended March 28, 2003, March 29, 2002 and March 30, 2001,
      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.


                                      -21-
<PAGE>

(2)   There are no employment agreements between the Company and members of its
      senior management, including the Chief Executive, Michael Offerman.

No other officer of the Corporation received compensation (salary and bonus) in
excess of $100,000 during the fiscal years ended March 28, 2003 or March 29,
2002

Pension/Benefit Incentive Plan

In 1964, the Corporation's Shareholders and Board of Directors adopted a
contributory pension plan (the "Salaried Pension Plan") effective April 1, 1964,
for salaried employees of the Corporation. The Salaried Pension Plan as revised
on April 1, 1987, provides for retirement benefits for qualified employees upon
or prior to retirement.

For early retirement, employees are eligible to receive a portion of their
retirement benefits, starting 10 years prior to the employees anticipated normal
retirement age (age 65), if the employee has completed 15 years of service to
the Corporation. The employee is eligible to receive reduced retirement benefits
based on an actuarial table for a period not exceeding ten (10) years of his
lifetime. In no event would benefits exceed $12,000 per year.

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

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

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.


                                      -22-
<PAGE>

The Company and the PBGC negotiated a settlement on the entire matter and on
July 2, 2001, an agreement was reached whereby the Company's liability to the
PBGC was reduced to $244,000. The Company will make monthly payments to the PBGC
as follows:

              September 1, 2003 to August 1, 2004               $2,000 per month
              September 1, 2004 to August 1, 2006               $3,000 per month
              September 1, 2006 to August 1, 2007               $4,000 per month

In addition, to the above referenced monthly payments, the Company will make
balloon payments of $25,000 each on the following dates:

              January 1, 2004
              May 1, 2004
              May 1, 2005
              January 1, 2006

The Company will also grant the PBGC a lien on the Company's machinery and
equipment, subject to the pre-existing liens in favor of the UDC.

As a result of this agreement the amount due the PBGC has been restated to
$244,000 and is reported as follows: $39,000 as a current liability and $205,000
as a long term liability.

Stock Option Plan.

On September 21, 2001 the Company's shareholders approved the adoption of the
Company's 2002 Employees Stock Option Plan to provide for the grant of options
to purchase up to 750,000 shares of the Company's common stock to all employees,
including senior management.

Options granted to employees under this plan may be designated as options which
qualify for incentive stock option treatment under Section 422A of the Internal
Revenue Code, or option which do not so qualify.

Under this plan, the exercise price of an option designated as an Incentive
Stock Option shall not be less than the fair market value of the Company's
common stock on the day the option is granted. In the event an option designated
as an incentive stock option is granted to a ten percent (10%) share holder,
such exercise price shall be at least 110 Percent (110%) of the fair market
value or the Company's common stock and the option must not be exercisable after
the expiration of five years from the day of the grant.

Exercise prices of non incentive stock options may be less than the fair market
value of the Company's common stock.

The aggregate fair market value of shares subject to options granted to a
participants, which are designated as incentive stock options, and which become
exercisable in any calendar year, shall not exceed $100,000. As of March 28,
2003 no options had been granted under the plan.

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%


                                      -23-
<PAGE>

of pre-tax operating profits. There were no contributions to the Bonus Plan for
the fiscal years ended March 28, 2003, March 29, 2002, and March 31, 2000.

Item 11.  Security Ownership of Certain Beneficial Owners and Management and
          Related Stockholders Matters

      The following table sets forth certain information as of June 23, 2003
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 23, 2003, there were 2,303,468 shares of Common Stock issued
and outstanding.


<TABLE>
<CAPTION>

                                                                      Amount of
                                                                      and Nature of
                         Name and Address of                          Beneficial          Percentage of Class
Title of Class           Beneficial Owner                             Ownership
--------------           -------------------                          -------------       -------------------
<S>                      <C>                                             <C>                        <C>
Common Stock             Michael Offerman                                946,784                    41%
$.50 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 Beach
                         NJ 07750
-------------------------------------------------------------------------------------------------------------
                         David Lopez and Nancy                           278,000                   12.1%
                         Lopez
                         Edge of Woods
                         P.O. Box 323
                         Southampton, NY 11968
-------------------------------------------------------------------------------------------------------------
All Officers & Directors as a Group
(4 in number)                                                            991,284                     43%
-------------------------------------------------------------------------------------------------------------
</TABLE>

         *  Less than 1%.

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

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


Item 12. Certain Relationships and Related Transactions

      None.

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

(a)   Exhibits filed with Form 10-KBS:

      99.1 Certification by Michael Offerman, President and Robert Knoth, Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002.

(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.

Item 14. Controls and Procedures

Evaluation of Disclosure Controls and Procedures:

Our management, under the supervision and with the participation of our Chief
Executive Officer and Controller, conducted an evaluation of our "disclosure
controls and procedures" (as defined in the Securities Exchange Act of 1934
Rules 13a-14(c)) within 90 days of the filing date of this Report on Form
10-KSB. Based on their evaluation, our chief executive officer and controller
have concluded that as of the Evaluation Date, our disclosure controls and
procedures are effective to ensure that all material information required to be
filed in this Report on Form 10-KSB has been made known to them.

Additionally, in response to the passage of the Sarbanes-Oxley Act of 2002, our
Board of directors and management are, among other actions, forming a Disclosure
Committee (and adopting policies) comprised of various members of our management
team and adopting disclosure policies to assist and guide the disclosure
process. The Disclosure Committee will be charged with, among other things,
reviewing and developing policies and procedures to enhance our disclosure
controls and procedures as well as with reviewing our periodic reports and other
public disclosures.

Other than as described above, there have been no significant changes, including
corrective actions with regard to significant deficiencies or material
weaknesses in our internal controls or in other factors that could significantly
affect these controls subsequent to the Evaluation Date set forth above.

In addition, historically, the Company has relied upon the entire Board of
Directors in appointing the Company's independent auditors and reviewing the
financial condition and statements of the Company. Given the relatively small
size of the Company's operations and revenues, the Board has not believed that
appointing an independent committee was a necessity. The Board is currently
discussing whether its should appoint an audit committee.


                                      -24-
<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: July 10, 2003

      Pursuant to the requirements of the Securities Exchange Act of 1934, 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                                      July 10, 2003
-------------------------------------
Michael Offerman, Chairman of the
 Board and President

/s/ Robert Knoth                                          July 10, 2003
-------------------------------------
Robert Knoth, Secretary and
 Treasurer

/s/ Murray Sennet                                         July 10, 2003
-------------------------------------
Murray Sennet, Director

/s/ Robert Pittman                                        July 10, 2003
-------------------------------------
Robert Pittman, Director

/s/ Alan Gottleib                                         July 10, 2003
-------------------------------------
Alan Gottlieb, Director


                                      -25-
<PAGE>

CERTIFICATION

      I, Michael Offerman, certify that:

            1.    I have reviewed this annual report of Form 10-KSB of IEH
                  Corporation;

            2.    Based on my knowledge, this annual report does not contain any
                  untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  annual report;

            3.    Based on my knowledge, the financial statements, and other
                  financial information included in this annual report, fairly
                  present in all material respects the financial condition,
                  results of operations and cash flows of the registrant as of,
                  and for, the periods presented in this annual report;

            4.    I am responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

            a)    Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiary, is made know to me by
                  other within those entities, particularly during the period in
                  which this annual report is being prepared;

            b)    Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

            c)    Presented in this annual report my conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

            5.    I have disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of registrant's
                  board of directors (or persons performing the equivalent
                  function);

            a)    All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

            b)    Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

            6.    I have indicated in this annual report whether or not there
                  were significant changes in internal controls or in other
                  factors that could significantly affect internal controls
                  subsequent to the date of our most recent evaluation,
                  including any corrective actions with regard to significant
                  deficiencies and material weaknesses.

      Date: July 1, 2003


      -------------------------------
      Michael Offerman
      President


                                      -26-
<PAGE>

                                  CERTIFICATION

I, Robert Knoth, certify that:

      1. I have reviewed this annual report of Form 10-KSB of IEH Corporation;

      2. Based on my knowledge, this annual report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this annual report;

      3. Based on my knowledge, the financial statements, and other financial
      information included in this annual report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the registrant as of, and for, the periods presented in this annual
      report;

      4. I am responsible for establishing and maintaining disclosure controls
      and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
      the registrant and we have:

      a. Designed such disclosure controls and procedures to ensure that
      material information relating to the registrant, including its
      consolidated subsidiary, is made know to me by other within those
      entities, particularly during the period in which this annual report is
      being prepared;

      b. Evaluated the effectiveness of the registrant's disclosure controls and
      procedures as of a date within 90 days prior to the filing date of this
      annual report (the "Evaluation Date"); and

      c. Presented in this annual report my conclusions about the effectiveness
      of the disclosure controls and procedures based on our evaluation as of
      the Evaluation Date;

      5. I have disclosed, based on our most recent evaluation, to the
      registrant's auditors and the audit committee of registrant's board of
      directors (or persons performing the equivalent function);

      a. All significant deficiencies in the design or operation of internal
      controls which could adversely affect the registrant's ability to record,
      process, summarize and report financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

      b. Any fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
      controls; and

      c. I have indicated in this annual report whether or not there were
      significant changes in internal controls or in other factors that could
      significantly affect internal controls subsequent to the date of our most
      recent evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.

      Date: July 1, 2003


      -------------------------------
      Robert Knoth
      Chief Financial Officer


                                      -27-
<PAGE>

                                  Exhibit 99.1

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
                      AS ADOPTED PURSUANT TO SECTION 906 OF
                         THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of IEH Corporation (the "Company") on Form
10-KSB for the year ending March 28, 2003 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Michael Offerman,
President of the Company, respectfully certify, pursuant to 18 U.S.C. ss.1350,
as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of the section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.


------------------------
Michael Offerman
President


                                      -28-
<PAGE>

                                  Exhibit 99.1

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
                      AS ADOPTED PURSUANT TO SECTION 906 OF
                         THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of IEH Corporation (the "Company") on Form
10-KSB for the year ending March 28, 2003 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Robert Knoth, Chief
Financial Officer of the Company, respectfully certify, pursuant to 18 U.S.C.
ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of the section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.


------------------------
Robert Knoth
Chief Financial Officer


                                      -29-
<PAGE>

                                 IEH Corporation

                                Table of Contents

                        March 28, 2003 and March 29, 2002

                                                                          Page
                                                                          Number
                                                                          ------

Report of Independent Certified Public Accountant                             29

Financial Statements:

         Balance Sheets as of March 28, 2003 and March 29, 2002               30

         Statement of Operations for the twelve months ended
            March 28, 2003 and March 29, 2002                                 32

         Statement of Stockholders' Equity as of March 28, 2003
            and March 29, 2002                                                33

         Statement of Cash Flows for the years ended March 28, 2003
            and March 29, 2002                                                34

Notes to Financial Statements                                                 36


                                      -30-
<PAGE>

                Report of Independent Certified Public Accountant

Board of Directors
IEH Corporation

We have audited the accompanying balance sheets of IEH Corporation as of March
28, 2003 and March 29, 2002 and the related statements of operations,
stockholders' equity, and cash flows for each of the two years in the period
ended March 28, 2003 and March 29, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based upon our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IEH Corporation as of March 28,
2003 and March 29, 2002 and the results of its operations and its cash flows for
each of the two years ended March 28, 2003 and March 29, 2002 in conformity with
generally accepted accounting principles.


                                               Jerome Rosenberg, CPA, P.C.

Melville, New York
June 17, 2003


                                      -31-
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     As of March 28, 2003 and March 29, 2002

<TABLE>
<CAPTION>
                                                                      March 28,       March 29,
                                                                         2003            2002
                                                                      ----------      ----------
<S>                                                                   <C>             <C>
                                     ASSETS

CURRENT ASSETS:
Cash                                                                  $    5,565      $    2,875
Accounts receivable, less allowances for doubtful accounts
   of $10,062 at March 28, 2003 and March 29, 2002                       769,845         770,884
Inventories (Note 2)                                                   1,089,075       1,015,539
Prepaid expenses and other current assets (Note 3)                        53,722          38,845
                                                                      ----------      ----------

          Total current assets                                         1,918,207       1,828,143
                                                                      ----------      ----------

PROPERTY, PLANT AND EQUIPMENT, less accumulated
   depreciation and amortization of $5,788,365 at March 28, 2003
   and $5,584,695 at March 29, 2002 (Note 4)                           1,119,513       1,100,731
                                                                      ----------      ----------
                                                                       1,119,513       1,100,731
                                                                      ----------      ----------

OTHER ASSETS:
  Other assets                                                            42,430          44,819
                                                                      ----------      ----------
                                                                          42,430          44,819
                                                                      ----------      ----------

Total assets                                                          $3,080,150      $2,973,693
                                                                      ==========      ==========
</TABLE>

                 See accompanying notes to financial statements


                                      -32-
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     As of March 28, 2003 and March 29, 2002

<TABLE>
<CAPTION>
                                                                       March 28,         March 29,
                                                                         2003              2002
                                                                      -----------       -----------
                                                                                         (Note 1)
<S>                                                                   <C>               <C>
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts receivable financing (Note 5)                                $   712,659       $   676,181
Notes payable, equipment, current portion (Note 7)                         16,978            25,332
Loans payable, current portion (Note 8)                                        --            25,289
Accrued corporate income taxes                                             16,800                --
Union health & welfare, current portion (Note 13)                          30,000            30,000
Accounts payable                                                        1,017,432           950,503
Pension plan payable, current portion (Note 10)                            39,000                --
Other current liabilities (Note 6)                                        159,833           144,430
                                                                      -----------       -----------

          Total current liabilities                                     1,992,702         1,851,735
                                                                      -----------       -----------

LONG-TERM LIABILITIES:
Pension Plan payable, less current portion (Note 10)                      205,000           244,000
Notes payable, equipment, less current portion (Note 7)                     7,822            24,773
Union health & welfare, less current portion (Note 13)                     13,828            43,828
                                                                      -----------       -----------
          Total long-term liabilities                                     226,650           312,601
                                                                      -----------       -----------

          Total liabilities                                             2,219,352         2,164,336
                                                                      -----------       -----------

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 10,000,000 shares authorized;
   2,303,468 shares issued and outstanding at March 28, 2003 and
   March 29, 2002                                                          23,035            23,035
Capital in excess of par value                                          2,744,573         2,744,573
Retained earnings (Deficit)                                            (1,906,810)       (1,958,251)
                                                                      -----------       -----------
          Total stockholders' equity                                      860,798           809,357
                                                                      -----------       -----------

          Total liabilities and stockholders' equity                  $ 3,080,150       $ 2,973,693
                                                                      ===========       ===========
</TABLE>

                 See accompanying notes to financial statements


                                      -33-
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                   Years Ended
                                                          -----------------------------
                                                           March 28,         March 29,
                                                             2003               2002
                                                          -----------       -----------
<S>                                                       <C>               <C>
REVENUE, net sales (Note 14)                              $ 4,727,399       $ 4,338,012
                                                          -----------       -----------

COSTS AND EXPENSES:

  Cost of products sold                                     3,468,278         3,207,645
  Selling, general and administrative                         872,541           808,935
  Interest expense                                            128,654           143,909
  Depreciation and amortization                               203,670           244,350
                                                          -----------       -----------
                                                            4,673,143         4,404,839
                                                          -----------       -----------

OPERATING INCOME (LOSS)                                        54,256           (66,827)

OTHER INCOME                                                      285            10,372
                                                          -----------       -----------

INCOME (LOSS) BEFORE INCOME TAXES                              54,541           (56,455)

PROVISION FOR INCOME TAXES                                     (3,100)           (1,554)
                                                          -----------       -----------

NET INCOME (LOSS)                                         $    51,441       $   (58,009)
                                                          ===========       ===========

Basic and Diluted Earnings per common share (Note 1)      $       .02       $      (.03)
                                                          ===========       ===========

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

                 See accompanying notes to financial statements


                                      -34-
<PAGE>

                                 IEH CORPORATION

                        STATEMENT OF STOCKHOLDERS' EQUITY
              For the Years Ended March 28, 2003 and March 29, 2002

<TABLE>
<CAPTION>
                                                                                                 Capital in             Retained
                                                                                                  Excess of             Earnings
                                                                 Common Stock                     Par Value            (Deficit)
                                                        ------------------------------         ---------------       --------------
                                                           Shares            Amount
                                                        -------------     ------------
<S>                                                         <C>           <C>                  <C>                   <C>
Balances, March 30, 2001                                    2,303,468        1,151,734               1,615,874           (1,900,242)

Reduction in par value of common stock                                      (1,128,699)              1,128,699                   --

Net income: year ended
  March 29, 2002                                                                                                            (58,009)
                                                        -------------     ------------         ---------------       --------------

Balances, March 29, 2002                                    2,303,468     $     23,035         $     2,744,573       $   (1,958,251)

Net income: year ended
  March 28, 2003                                                                                                             51,441
                                                        -------------     ------------         ---------------       --------------

Balances, March 28, 2003                                    2,303,468     $      23,035        $     2,744,573       $   (1,906,810)
</TABLE>

                 See accompanying notes to financial statements


                                      -35-
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
              For the Years Ended March 28, 2003 and March 29, 2002

<TABLE>
<CAPTION>
                                                                        March 28,       March 29,
                                                                           2003            2002
                                                                        ---------       ---------
<S>                                                                     <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                     $  51,441       $ (58,009)
                                                                        ---------       ---------

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

  Depreciation and amortization                                           203,670         244,350

Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                                1,039         (38,734)
  (Increase) decrease inventories                                         (73,536)        (25,119)
  (Increase) decrease in prepaid expenses and other current assets        (14,877)         (8,260)
  (Increase) decrease in other assets                                       2,389           2,256

  (Decrease) increase in accounts payable                                  66,929         231,194
  (Decrease) increase in other current liabilities                         15,403           3,007
  Increase in accrued corporate income taxes                               16,800          (4,912)
  (Decrease) in due to union pension & health & welfare                   (30,000)        (28,861)
                                                                        ---------       ---------

               Total adjustments                                          187,817         374,921
                                                                        ---------       ---------

NET CASH PROVIDED BY (USED) FOR OPERATING ACTIVITIES                      239,258         316,912
                                                                        ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Acquisition of property, plant and equipment                          (222,452)       (153,166)
                                                                        ---------       ---------

          NET CASH USED IN INVESTING ACTIVITIES                         $(222,452)      $(153,166)
                                                                        ---------       ---------
</TABLE>

                 See accompanying notes to financial statements


                                      -36-
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
              For the Years Ended March 28, 2003 and March 29, 2002

<TABLE>
<CAPTION>
                                                         March 28,       March 29,
                                                           2003             2002
                                                         ---------       ---------
<S>                                                      <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable, equipment           $ (25,305)      $ (31,107)
Proceeds from accounts receivable financing                 36,478         (83,756)
Principal payments on loan payable                         (25,289)        (57,841)
                                                         ---------       ---------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES        (14,116)       (172,704)
                                                         ---------       ---------

INCREASE (DECREASE) IN CASH                                  2,690          (8,958)

CASH, beginning of period                                    2,875          11,833
                                                         ---------       ---------

CASH, end of period                                      $   5,565       $   2,875
                                                         =========       =========

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

     Interest                                            $ 119,180       $ 134,740
                                                         =========       =========

     Income Taxes                                        $   1,693       $   4,175
                                                         =========       =========
</TABLE>

                 See accompanying notes to financial statements


                                      -37-
<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 years
      ended March 28, 2003 and March 29, 2002 were comprised of 52 weeks.

      Revenue Recognition:

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

      The Company's policy with respect to customer returns and allowances as
      well as product warranty is as follows:

      The Company will accept a return of defective product within one year from
      shipment for repair or replacement at the Company's option. If the product
      is repairable, the Company at its own cost will repair and return to the
      customer. If unrepairable, the Company will either offer an allowance
      against payment or will reimburse the customer for the total cost of
      product.

      Most of the Company's products are custom ordered by customers for a
      specific use. The Company provides engineering services as part of the
      relationship with its customers in developing the custom product. The
      Company is not obligated to provide such engineering service to its
      customers. The Company does not charge separately for these services.


                                      -38-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

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

      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 March 28, 2003 or
      March 29, 2002.

      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 Modified Accelerated Cost Recovery System (MACRS)
      method over the estimated useful lives (5-7 years) of the related assets.

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

      Income Taxes:

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

      Net Income Per Share:

      The Company has adopted the provisions of SFAS No. 128, "Earnings Per
      Share", which requires the disclosure of "basic" and "diluted" earnings
      (loss) per share. Basic earnings per share is computed by dividing net
      income by the weighted average number of common shares outstanding during
      each period. Diluted earnings per share is similar to basic earnings per
      share except that the weighted average number of common shares outstanding
      is increased to reflect the dilutive effect of potential common shares,
      such as those issuable upon the exercise of stock or warrants, as if they
      had been issued. For the years ended March 28, 2003 and March 29, 2002,
      there were no items of potential dilution that would impact on the
      computation of diluted earnings or loss per share.


                                      -39-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      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 due to the relatively short maturity (three months) of these
      instruments.

      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 carrying
      amount of an asset may not be recoverable. The Company has adopted SFAS
      No. 121. There were no long-lived asset impairments recognized by the
      Company for the years ended March 28, 2003 and March 29, 2002.

      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. There were no material items of
      comprehensive income to report for the years ended March 28, 2003 and
      March 29, 2002.

      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 Company's
      presentation of its results of operations or financial position.


                                      -41-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      Effect of New Accounting Pronouncements:

      The Company does not believe that any recently issued but not yet
      effective accounting standards, have a material effect on the Company's
      financial position, results of operations or cash flows.

Note 2 - INVENTORIES:

      Inventories are comprised of the following:

                                               March 28,         March 29,
                                                 2003              2002
                                              ----------        ----------

      Raw materials                           $  709,647        $  675,446
      Work in progress                           281,075           228,912
      Finished goods                              98,353           111,181
                                              ----------        ----------

                                              $1,089,075        $1,015,539
                                              ==========        ==========

Note 3 - PREPAID EXPENSES AND OTHER CURRENT ASSETS:

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

                                               March 28,         March 29,
                                                 2003              2002
                                              ----------        ----------

      Prepaid insurance                       $   49,816        $   32,574
      Prepaid corporate taxes                      3,737             3,925
      Other current assets                           169             2,346
                                              ----------        ----------
                                              $   53,722        $   38,845
                                              ==========        ==========


                                      -41-
<PAGE>

Note 4 - PROPERTY, PLANT AND EQUIPMENT:

      Property, plant and equipment are as follows:

                                                 March 28,       March 29,
                                                   2003            2002
                                                ----------      ----------

      Computers                                 $  189,336      $  189,288
      Leasehold improvements                       585,831         585,831
      Machinery and equipment                    4,291,057       4,175,282
      Tools and dies                             1,686,846       1,580,217
      Furniture and fixture                        154,808         154,808
                                                ----------      ----------

                                                 6,907,878       6,685,426

      Less: accumulated depreciation and
      amortization                               5,788,365       5,584,695
                                                ----------      ----------

                                                $1,119,513      $1,100,731
                                                ==========      ==========

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 of 4.25% at March 28, 2003, with
      a minimum of 12% per annum. The agreement has an initial term of one year
      and will automatically renew for successive one year terms, unless
      terminated by the Company or Lender upon receiving sixty days prior
      notice. The loan is secured by the Company's accounts receivable and
      inventories.

Note 6 - OTHER CURRENT LIABILITIES:

      Other current liabilities are comprised of the following:

                                                 March 28,       March 29,
                                                   2003            2002
                                                ----------      ----------

      Payroll and vacation accruals             $   77,622      $   67,920
      Sales commissions                             13,795          14,339
      Other                                         68,416          62,171
                                                ----------      ----------

                                                $  159,833      $  144,430
                                                ==========      ==========


                                      -42-
<PAGE>

Note 7 - NOTES PAYABLE EQUIPMENT:

      The Company financed the acquisition of new computer equipment and
      software with notes payable. The notes are payable over a sixty month
      period. The balance remaining at March 28, 2003 amounted to $24,800.

      Aggregate future principal payments are as follows:

      Fiscal Year Ending March:
      2004                                                      $     16,978
      2005                                                             6,855
      2006                                                               967
                                                                ------------
                                                                $     24,800
                                                                ============

Note 8 - 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 was payable over ten years, with
      interest rates progressively increasing from 4% to 8% per annum.

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

      The loan was paid in full in September, 2002.

Note 9 - INCOME TAXES:

      The components of the deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                                               March 28,         March 29,
                                                                  2003              2002
                                                              -----------       -----------
<S>                                                           <C>               <C>
      Deferred tax assets:

      Net operating loss carryforwards                        $ 2,143,938       $ 2,085,929
                                                              -----------       -----------

      Gross deferred assets tax assets                          2,143,948         2,085,929

      Deferred tax liabilities:

      State income taxes                                          (84,727)          (82,397)
                                                              -----------       -----------

      Net deferred tax assets before valuation allowance        2,059,221         2,003,532

      Valuation allowance                                      (2,059,221)       (2,003,532)
                                                              -----------       -----------

      Net deferred tax assets                                 $         0       $         0
                                                              ===========       ===========
</TABLE>


                                      -43-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 9 - INCOME TAXES: (continued)

      At March 31, 2000 , the Company established a 100% valuation allowance for
      the net deferred tax assets, as management could not determine that it was
      more likely than not that the deferred tax assets could be realized. The
      change in valuation allowance amounted to $55,689 for the year ended March
      28, 2003.

      As of March 28, 2003, the Company has available Federal net operating loss
      carryforwards (NOL's) totaling approximately $2,143,938 which expire at
      various times through March 31, 2010, for State and Local purposes, the
      company has available NOL's approximating $2,074,453 which expire at
      various times through March 31, 2010.

      Utilization of the NOL's may be limited pursuant to Internal Revenue Code
      Section 382 should significant changes to the existing ownership of the
      Company occur.

      A reconciliation of income taxes computed at the Federal statutory rate as
      compared to income tax expense at the effective income tax is as follows:

                                                        March 28,    March 29,
                                                           2003         2002
                                                        ---------    ---------

      Federal statutory income tax (benefit) rate         (34.0)%    (34.0)%

      State tax benefit, net of Federal liability         (12.2)%    (12.2)%

      Net change in valuation allowance                    46.2%      46.2%

      Effective income tax (benefit) rate                   (--)%      (--)%

Note 10 - PENSION PLAN-SALARIED PERSONNEL:

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

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


                                      -44-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 10 - PENSION PLAN-SALARIED PERSONNEL: (continued)

      The Company and the PBGC negotiated a settlement on the entire matter and
      on July 2, 2001, an agreement was reached whereby the Company's liability
      to the PBGC was reduced to $244,000. The Company will make monthly
      payments to the PBGC as follows:

         September 1, 2003 to August 1, 2004                    $2,000 per month
         September 1, 2004 to August 1, 2006                    $3,000 per month
         September 1, 2006 to August 1, 2007                    $4,000 per month

      In addition, to the above referenced monthly payments, the Company will
      make balloon payments of $25,000 each on the following dates:

         January 1, 2004
         May 1, 2004
         May 1, 2005
         January 1, 2006

      The Company will also grant the PBGC a lien on the Company's machinery and
      equipment, subject to the pre-existing liens in favor of the UDC.

      As a result of this agreement the amount due the PBGC has been restated to
      $244,000 and is reported as follows: $39,000 as a current liability and
      $205,000 as a long term liability.

Note 11 - CHANGES IN STOCKHOLDERS' EQUITY:

      Retained earnings (deficit) decreased by $51,441, which represents the net
      income for the year.

Note 12- 2001 EMPLOYEE STOCK OPTION PLAN:

      On September 21, 2001 the Company's shareholders approved the adoption of
      the Company's 2002 Employees Stock Option Plan to provide for the grant of
      options to purchase up to 750,000 shares of the Company's common stock to
      all employees, including senior management.

      Options granted to employees under this plan may be designated as options
      which qualify for incentive stock option treatment under Section 422A of
      the Internal Revenue Code, or options which do not so qualify.

      Under this plan, the exercise price of an option designated as an
      Incentive Stock Option shall not be less than the fair market value of the
      Company's common stock on the day the option is granted. In the event an
      option designated as an incentive stock option is granted to a ten percent
      (10%) shareholder, such exercise price shall be at least 110 Percent
      (110%)


                                      -45-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 12- 2001 EMPLOYEE STOCK OPTION PLAN: (continued)

      of the fair market value or the Company's common stock and the option must
      not be exercisable after the expiration of five years from the day of the
      grant.

      Exercise prices of non incentive stock options may be less than the fair
      market value of the Company's common stock..

      The aggregate fair market value of shares subject to options granted to a
      participant(s), which are designated as incentive stock options, and which
      become exercisable in any calendar year, shall not exceed $100,000. As of
      March 28, 2003 no options had been granted under the plan.

Note 13 - COMMITMENTS:

      The Company exercised its option to renew its lease on the premises for 10
      years. The original lease ran through August 23, 2001.

      The Company is obligated under this renewal through August 23, 2011, at
      minimum annual rentals as follows:

                  Fiscal year ending March:

                  2004                                       $   112,764
                  2005                                           112,764
                  2006                                           112,764
                  2007                                           112,764
                  2008                                           112,764
                  2009                                           112,764
                  2010                                           112,764
                  2011                                            75,176
                                                             -----------

                                                             $   864,524
                                                             ===========

      The rental expense for the year ended March 28, 2003 for this lease was $
      112,764. The terms of the renewal are presently being negotiated by the
      Company and its landlord, Apple Industrial Development, Corp.

      The Company has a collective bargaining multi-employer pension plan with
      the United Auto Workers of America, Local 259. Contributions are made in
      accordance with a negotiated labor contract and are based on the number of
      covered employees employed per month. With the passage of the
      Multi-Employer Pension Plan Amendments Act of 1990 ("The Act"), the
      Company may become subject to liabilities in excess of contributions made
      under the collective bargaining agreement. Generally, these liabilities
      are contingent upon the termination, withdrawal, or partial withdrawal
      from the Plan.


                                      -46-
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 13 - COMMITMENTS: (continued)

      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 $43,019 for the year ended March
      28, 2003 and $38,384 for the year ended March 29, 2002.

      As of March 28, 2003, the Company reported arrears with respect to its
      contributions to the Union's health and welfare plan. The amount due the
      health and welfare plan was $43,828. The total amount due of $43,828 is
      reported on the accompanying balance sheet as follows: $30,000 as a
      current liability and $13,828 as a long term liability.

Note 14 - REVENUES FROM MAJOR CUSTOMERS:

      In the fiscal year ended March 28, 2003, approximately 20% of the
      Company's total revenues were earned from one customer. Total sales to
      this customer were approximately $945,500. No other customer accounted for
      over 10% of the Company's sales. Accounts receivable as of March 28, 2003,
      included a receivable from two customers which amounted to 40% or more of
      the total accounts receivable.


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