For the Nine and Three Months Ended December
23, 2016 and December 25, 2015
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1-
|
INTERIM RESULTS AND BASIS OF PRESENTATION:
|
The accompanying unaudited financial statements as of December
23, 2016 and December 25, 2015 and for the nine and three months then ended have been prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. In
the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements
and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position
as of December 23, 2016 and December 25, 2015 and the results of operations and cash flows for the nine and three months then ended.
The financial data and other information disclosed in these notes to the interim financial statements related to these periods
are unaudited. The results for the nine and three months ended December 23, 2016, are not necessarily indicative of the results
to be expected for any subsequent quarter or the entire fiscal year. The balance sheet at March 25, 2016 has been derived from
the audited financial statements at that date.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of
the Securities and Exchange Commission (the “SEC”). The Company believes, however, that the disclosures in this report
are adequate to make the information presented not misleading in any material respect. The accompanying financial statements should
be read in conjunction with the audited financial statements and notes thereto of IEH Corporation for the fiscal year ended March
25, 2016 included in the Company’s Annual Report on Form 10-K as filed with the SEC and the attached Management’s Discussion
and Analysis of Financial Condition and Results of Operations.
Note 2-
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
|
Description of Business:
The Company designs, develops and manufactures printed circuit
connectors for high performance applications. We have also developed a high performance plastic circular connector line. All of
our products utilize the HYPERBOLOID contact design, a rugged high-reliability contact system ideally suited for high-stress environments.
We are the only independent producer of HYPERBOLOID in the United States.
Our customers consist of OEM’s (Original Equipment
Manufacturers), companies manufacturing medical equipment, and distributors who resell our products to OEMs. We sell our products
directly and through regional representatives located in all regions of the United States, Canada, Israel, India, various Pacific
Rim countries, South Korea and the European Union (EU).
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 2-
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
|
Description of Business:
(continued)
The customers of the Company services are in the following
markets: Government, Military, Aerospace, Medical, Automotive, Industrial, Test Equipment and Commercial Electronics. The Company
appears on the Military Qualified Product Listing “QPL” to MIL-DTL-55302 and supply customer requested modifications
to this specification. Sales to the Commercial Electronic and Military markets were 39% and 53%, respectively, of the Company’s
net sales for the year ended March 25, 2016. The Company’s offering of “QPL” items has recently been expanded
to include additional products.
In order to remain competitive, the Company has an internal
program to upgrade, add and maintain machinery, review material costs and increase labor force productivity. We recently purchased
several machines to increase the productivity of certain processes. This will help us meet this goal.
Business New Product Development:
The Company is sought after by many of its customers to
design and manufacture custom connectors. This has created many new products that are innovative designs and employ new technologies.
The Company continues to be successful because of its ability to assist its customers and create a new design, including engineering
drawing packages, in a relatively short period of time. We will continue to support our customers to the best of our ability.
The circular product line of connectors introduced several
years ago for the medical industry continues to be very rewarding for the Company. The line has been expanded to include connector
cable assemblies utilizing the circular connectors.
A new product line featuring high density connectors is
being added to the Company’s product offering. This offering should be available within the next few months. The Company
expects the new product line to generate additional revenue.
The standard printed circuit board connectors we produce
are continually being expanded and utilized in many of the military programs being built today. We have recently received approval
for additional products that we can offer under the Military Qualified Product Listing “QPL.”
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 31. The year ended March 25, 2016 was comprised of
52 weeks. The current fiscal year, ending on March 31, 2017, will be comprised of 53 weeks.
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 2-
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
|
Revenue Recognition:
Revenues are recognized at the shipping date of the Company's
products. The Company has historically adopted the shipping terms that title to merchandise passes to the customer at the shipping
point (FOB Shipping Point). At this juncture, title has passed, the Company has recognized the sale, inventory has been relieved,
and the customer has been invoiced. The Company does not offer any discounts, credits or other sales incentives.
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 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 invoice
its customers separately for these services.
Inventories:
Inventories are stated at cost, on a first-in, first-out
basis which does not exceed market value.
The Company manufactures products pursuant to specific technical
and contractual requirements.
The Company historically purchases material in excess of
its requirements to avail itself of favorable pricing as well as the possibility of receiving additional orders from customers.
This excess may result in material not being used in subsequent periods, which may result in this material being deemed obsolete.
The Company annually reviews its purchase and usage activity
of its inventory of parts as well as work in process and finished goods to determine which items of inventory have become obsolete
within the framework of current and anticipated orders. The Company based upon historical experience has determined that if a part
has not been used and purchased or an item of finished goods has not been sold in three years, it is deemed to be obsolete. The
Company estimates which materials may be obsolete and which products in work in process or finished goods may be sold at less than
cost. A periodic adjustment, based upon historical experience, is made to inventory in recognition of this impairment.
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 2-
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (
continued
)
|
Concentration of Credit Risk:
Financial instruments which potentially subject the Company
to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable.
Under the provisions of the Dodd-Frank Wall Street Reform
and Consumer Protection Act that was signed into law on July 21, 2010, the Federal Deposit Insurance Corporation (FDIC) will permanently
insure all accounts maintained with each financial institution up to $250,000 in the aggregate.
As of December 23, 2016, the Company had funds on deposit
in the amount of $1,385,883 in one financial institution comprised of the following:
Non-interest bearing accounts
|
|
$
|
247,454
|
|
Interest bearing account
|
|
|
1,138,429
|
|
|
|
$
|
1,385,883
|
|
The Company has not experienced any losses in such accounts
and believes its cash balances are not exposed to any significant risk.
Property, Plant and Equipment:
Property, plant and equipment are stated at cost less accumulated
depreciation and amortization. The Company provides for depreciation and amortization using the Double Declining Balance 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 accounts. 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 the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Topic 740,
Income Taxes,
which includes the provisions of Statement of Financial Accounting Standards (“SFAS”)
No. 109, “Accounting for Income Taxes.”
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 2-
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (
continued
)
|
Net Income Per Share:
The Company has adopted the provisions of ASC Topic 260,
Earnings per Share,
which includes 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 nine and three months ended December 23, 2016 and December 25, 2015, respectively, 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
GAAP 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:
The Company has adopted the provisions of ASC Topic, 360,
Property, Plant and Equipment-Impairment or Disposal of Long-Lived Assets
which includes the provisions of SFAS No. 144,
“Accounting for The Impairment or Disposal of Long-Lived Assets,” and 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. 144. There were no long-lived asset impairments
recognized by the Company for the nine and three months ended December 23, 2016 and December 25, 2015, respectively.
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 2-
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
|
Reporting Comprehensive Income:
The Company has adopted the provisions of ASC Topic, 220,
Comprehensive Income
which includes 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 balance sheet. There were no material items of
comprehensive income to report for the nine and three months ended December 23, 2016 and December 25, 2015, respectively.
Segment Information:
The Company has adopted the provisions of ASC Topic, 280,
Segment Reporting
which includes 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 ASC Topic 280 did not affect the Company’s presentation of its results of operations or financial position.
Research and 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 did not expend any funds on nor receive any
revenues related to customer sponsored research and development activities relating to the development of new designs, techniques
and the improvement of existing designs during the nine and three months ended December 23, 2016 and December 25, 2015, respectively.
Recent Accounting Pronouncements:
In December 2016, the FASB
issued ASU 2016-19; the amendments cover a wide range of topics in the Accounting Standards Codification, including differences
between original guidance and the Accounting Standards Codification, guidance clarification and reference corrections, simplification
and minor improvements. The adoption of ASU 2016-19 is effective for annual periods, including interim periods, within those annual
periods, beginning after December 15, 2016. The Company is currently evaluating the effect of this standard on its financial statements
.
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 2-
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
|
Recent Accounting Pronouncements:
(continued)
In December 2016, the FASB issued ASU 2016-20, Technical
Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in this update are of a similar
nature to the items typically addressed in the ASU 2016-19, Technical Corrections and Improvements. The FASB elected to issue a
separate update for technical corrections and improvements to Topic 606 as well as other Topics amended by ASU 2014-09 to increase
public awareness of the proposals and to expedite improvements to ASU-2014-9. The adoption of ASU 2016-20 is effective from the
periods beginning after December 31, 2017, including interim reporting periods within that reporting period. Early adoption is
permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that
reporting period. The Company is currently evaluating the effect of this standard on its financial statements.
In addition, the Financial Accounting Standards Board (“FASB”)
has issued certain other accounting standards updates as of December 31, 2016 that will become effective in subsequent periods.
The Company believes that none of those updates would have significantly affected the Company’s financial accounting measures
or disclosures had they been in effect during the nine and three months ended December 23, 2016 and December 25, 2015, and it does
not believe that any of those pronouncements will have a significant impact on the Company’s financial statements at the
time that they become effective.
Inventories are stated at cost, on a first-in, first-out
basis, which does not exceed market value.
The Company manufactures products pursuant to specific technical
and contractual requirements. The Company historically purchases material in excess of its requirements to avail itself of favorable
pricing as well as the possibility of receiving additional orders from customers. This excess may result in material not being
used in subsequent periods, which may result in this material being deemed obsolete.
The Company annually reviews its purchase and usage activity
of its inventory of parts as well as work in process and finished goods to determine which items of inventory have become obsolete
within the framework of current and anticipated orders. The Company based upon historical experience has determined that if a part
has not been used and purchased or an item of finished goods has not been sold in three years, it is deemed to be obsolete.
The Company estimates which materials may be obsolete and
which products in work in process or finished goods may be sold at less than cost. A periodic adjustment, based upon historical
experience, is made to inventory in recognition of this impairment.
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 3-
|
INVENTORIES:
(continued)
|
Inventories were comprised of the following:
|
|
Dec. 23,
|
|
|
March 25,
|
|
|
|
2016
|
|
|
2016
|
|
|
|
|
|
|
|
|
Raw materials
|
|
$
|
5,696,748
|
|
|
$
|
4,844,510
|
|
Work in progress
|
|
|
701,284
|
|
|
|
596,371
|
|
Finished goods
|
|
|
2,127,729
|
|
|
|
1,809,419
|
|
|
|
$
|
8,525,761
|
|
|
$
|
7,250,300
|
|
Note 4-
|
PREPAID EXPENSES AND OTHER CURRENT ASSETS:
|
Prepaid expenses and other current assets were comprised
of the following:
|
|
Dec. 23,
|
|
|
March 25,
|
|
|
|
2016
|
|
|
2016
|
|
|
|
|
|
|
|
|
Prepaid insurance
|
|
$
|
5,717
|
|
|
$
|
22,834
|
|
Prepaid corporate taxes
|
|
|
1,448,260
|
|
|
|
1,345,459
|
|
Other current assets
|
|
|
3,556
|
|
|
|
9,575
|
|
|
|
$
|
1,457,533
|
|
|
$
|
1,377,868
|
|
Note 5-
|
PROPERTY, PLANT AND EQUIPMENT:
|
Property, plant and equipment were comprised of
the following:
|
|
Dec. 23,
|
|
|
March 25,
|
|
|
|
2016
|
|
|
2016
|
|
|
|
|
|
|
|
|
Computers
|
|
$
|
403,739
|
|
|
$
|
394,175
|
|
Leasehold improvements
|
|
|
871,839
|
|
|
|
845,589
|
|
Machinery and equipment
|
|
|
6,051,498
|
|
|
|
5,767,672
|
|
Tools and dies
|
|
|
3,423,727
|
|
|
|
3,283,953
|
|
Furniture and fixture
|
|
|
170,644
|
|
|
|
170,644
|
|
Website development cost
|
|
|
9,050
|
|
|
|
9,050
|
|
|
|
|
10,930,497
|
|
|
|
10,471,083
|
|
Less: accumulated depreciation and amortization
|
|
|
(8,847,792
|
)
|
|
|
(8,603,892
|
)
|
|
|
$
|
2,082,705
|
|
|
$
|
1,867,191
|
|
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 6-
|
ACCOUNTS RECEIVABLE FINANCING:
|
The Company entered into an accounts receivable financing
agreement with a non-bank lending institution (“Factor”) whereby it can borrow up to 80 percent of its eligible receivables
(as defined in the financing agreement) at an interest rate of 2.5% above JP Morgan Chase’s publicly announced rate with
a minimum rate of 6% per annum. The financing agreement has an initial term of one year and will automatically renew for successive
one-year terms, unless terminated by the Company or the Factor upon receiving 60 days prior notice. Funds advanced by the Factor
are secured by the Company’s accounts receivable and inventories.
At December 23, 2016, the Company had reported excess payments
to the Factor of $104,245. As of March 25, 2016, the Company had reported excess payments to the Factor of $186,114. These excess
payments are reported in the accompanying financial statements as of December 23, 2016 and March 25, 2016 as “Excess payments
to accounts receivable factor.”
Note 7-
|
OTHER CURRENT LIABILITIES:
|
Other current liabilities were comprised of the following:
|
|
Dec. 23,
|
|
|
March 25,
|
|
|
|
2016
|
|
|
2016
|
|
|
|
|
|
|
|
|
Payroll and vacation accruals
|
|
$
|
540,301
|
|
|
$
|
560,995
|
|
Sales commissions
|
|
|
59,574
|
|
|
|
50,357
|
|
Insurance
|
|
|
16,704
|
|
|
|
17,014
|
|
Other
|
|
|
—
|
|
|
|
2,914
|
|
|
|
$
|
616,579
|
|
|
$
|
631,280
|
|
Note 8-
|
CHANGES IN STOCKHOLDERS’ EQUITY:
|
The accumulated retained earnings increased by $1,197,025,
which represents the net income for the nine months ended December 23, 2016. Accordingly, the Company reported accumulated retained
earnings of $12,009,985 as of December 23, 2016.
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 9-
|
2011 EQUITY INCENTIVE PLAN:
|
On August 31, 2011, the Company’s shareholders approved
the adoption of the Company’s 2011 Equity Incentive Plan (“2011 Plan”) to provide for the grant of stock options
and restricted stock awards to purchase up to 750,000 shares of the Company’s common stock to all employees, consultants
and other eligible participants including senior management and members of the Board of Directors of the Company. The 2011 Plan
replaced the prior 2002 Employee Stock Option Plan which had expired in accordance with its terms.
Options granted to employees under the 2011 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 qualify (non-qualified stock options).
Under the 2011 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%) or greater shareholder,
such exercise price shall be at least 110 percent (110%) of the fair market value of the Company’s common stock and the option
must not be exercisable after the expiration of five years from the day of the grant. The 2011 Plan also provides that holders
of options that wish to pay for the exercise price of their options with shares of the Company’s common stock must have beneficially
owned such stock for at least nine months prior to the exercise date.
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) that are designated as incentive stock options, and which become exercisable in any calendar year,
shall not exceed $100,000
On July 1, 2015, our Board of Directors granted 245,000
options to purchase shares of the Company’s common stock under the 2011 Plan as follows: (i) Michael Offerman, our Chief
Executive Officer, was granted 75,000 options; (ii) Robert Knoth, our Chief Financial Officer, was granted 50,000 options; (iii)
four non-executive officer key employees were granted 110,000 options; and (iv) each of our non-management directors, Allen Gottlieb
and Gerald Chafetz, was granted 5,000 options. The stock options (i) have a ten-year term; (ii) have an exercise price equal to
the fair market value of the Company’s common stock as determined under the 2011 Plan, as reported in the OTCBB, on the date
of grant ($6.00), except that the options granted to Michael Offerman has an exercise price equal to 110% of such fair market value
because he owns ten percent (10%) or greater of the Company’s outstanding common stock; and (iii) were all immediately vested.
In the event of the termination of each recipient’s employment by, or association with, the Company (as applicable), the
options will remain exercisable in accordance with the terms of the 2011 Plan.
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 9-
|
2011 EQUITY INCENTIVE PLAN:
(continued)
|
Effective July 15, 2016, the Board of Directors of
the Company unanimously voted to increase the number of directors from three to six directors and elected David Offerman as a Class
II director and Dr. Sonia Marciano and Eric C. Hugel as Class I Directors.
Effective August 15, 2016, the Board of Directors
also approved the granting of stock options to purchase shares of the Company’s common stock under the 2011 Plan to each
of Dr. Marciano and Mr. Hugel as follows: Each of the new non-management directors will receive a grant of options totaling 5,000
shares each subject to the following vesting schedule: (i) 1,000 shares will vest immediately (August 15, 2016); (ii) 2,000 shares
will vest on August 15, 2017; and (iii) 2,000 shares will vest on August 15, 2018. The stock options (i) have a ten-year term;
and (ii) have an exercise price equal to the fair market value of the Company’s common stock as determined under the 2011
Plan, as reported in the OTCBB, on the date of grant ($5.30). In the event of the termination of each recipient’s association
with the Company, the options will remain exercisable in accordance with the terms of the 2011 Plan.
The table below summarizes the option awards for the named
executive officers and non-management directors:
Name
|
Stock Option Grants
|
Michael Offerman
|
75,000
|
Robert Knoth
|
50,000
|
Allen Gottlieb
|
5,000
|
Gerald Chafetz
|
5,000
|
Sonia Marciano
|
5,000
|
Eric C. Hugel
|
5,000
|
The Company intends to provide additional information regarding
the compensation awarded to the named executive officers and non-management directors in respect of and during the fiscal year
ended March 25, 2016, in the proxy statement for the Company’s 2016 annual meeting of stockholders.
Note 10-
|
CASH BONUS PLAN:
|
In 1987, the Company adopted a cash bonus plan (“Cash
Bonus Plan”) for executive officers. Contributions to the Cash 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 or 25% of pre-tax
operating profits. Accordingly, the Company has accrued a contribution provision of $252,700 for the nine months ended December
23, 2016. For the year ended March 25, 2016, the Company’s contribution was $227,700.
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 11-
|
COMMITMENTS AND CONTINGENCIES:
|
The Company leases space for its corporate offices (including
its manufacturing facility) at 140 58
th
Street, Suite 8E, Brooklyn, New York. The lease term runs from December 1, 2010
through November 30, 2020. The basic minimum annual rentals are as follows:
Fiscal year ending March:
|
|
|
|
|
|
|
|
2017
|
|
$
|
44,145
|
|
2018
|
|
|
178,360
|
|
2019
|
|
|
183,720
|
|
2020
|
|
|
189,200
|
|
2021
|
|
|
128,640
|
|
|
|
$
|
724,065
|
|
The rental expense for the nine months ended December 23,
2016 was $129,035 and $124,830 for the nine months ended December 25, 2015.
The Company has a collective bargaining multi-employer pension
plan (“Multi-Employer Plan”) with the United Auto Workers of America, Local 259 (“UAW”). Contributions
are made by the Company 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 Amendment Act of 1990 (the “1990 Act”), the Company
may become subject to liabilities in excess of contributions made under the collective bargaining agreement. Generally, these are
contingent upon termination, withdrawal, or partial withdrawal from the Multi-Employer Plan.
The Company has not taken any action to terminate, withdraw
or partially withdraw from the Multi-Employer Plan, nor does it intend to do so in the future. Under the 1990 Act, liabilities
would be based upon the Company’s proportional share of the Multi-Employer 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 the provisions of the Multi-Employer Plan were $87,687 for the nine
months ended December 23, 2016 and $84,336 for the nine months ended December 25, 2015.
Note 12-
|
SUBSEQUENT EVENTS:
|
The Company has evaluated all other subsequent events through
February 6, 2017, the date the financial statements were available to be issued. Based on this evaluation, the Company has determined
that no subsequent events have occurred which require disclosure through the date that these financial statements were available
to be issued.
IEH CORPORATION
PART I: FINANCIAL INFORMATION