Depending on the contract, control is transferred when the products are either shipped or delivered to the customer, at which point we recognize the transaction price for those products as net sales. The transaction price recognized at that point reflects our estimate of the consideration to be received in exchange for the products. The actual amount may ultimately differ due to the effect of various customer incentives and trade promotion activities.

Risk Factors” for details on how economic conditions affecting market risks also affect the demand for and pricing of our products and how we are affected by exchange rate fluctuations. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States, including amounts based on management’s best estimates and judgments.

We eliminate all intercompany transactions. To prepare financial statements that conform with GAAP, our management must make informed estimates that affect how we report revenues, expenses, assets, and liabilities, including contingent assets and liabilities. Actual results could differ from these estimates.

Risk Factors” for details on how economic conditions affecting market risks also affect the demand for and pricing of our products and how we are affected by exchange rate fluctuations. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States, including amounts based on management’s best estimates and judgments. In management’s opinion, the consolidated financial statements fairly present the Company’s financial position, results of operations, and cash flows.

We employ approximately 5,000 people (excluding individuals who work on a part-time or temporary basis) on six continents, including approximately 2,000 people in the United States (approximately 7% of whom are represented by a union) and 800 people in Louisville, Kentucky, USA, home of our world headquarters. According to International Wine & Spirit Research (IWSR), we are the largest American-owned spirits and wine company with global reach. We are a “controlled company” under New York Stock Exchange rules because the Brown family owns more than 50% of our voting stock.

We employ approximately 4,900 people (excluding individuals who work on a part-time or temporary basis) on six continents, including approximately 1,900 people in the United States (approximately 7% of whom are represented by a union) and 700 people in Louisville, Kentucky, USA, home of our world headquarters. According to International Wine & Spirit Research (IWSR), we are the largest American-owned premium-plus spirits company. We are a “controlled company” under New York Stock Exchange rules because the Brown family owns more than 50% of our voting stock.

We believe that of our significant accounting policies, which are described in Note A of the notes to our consolidated financial statements included in this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations, as listed below: 1. On April 24, 2024, our Audit Committee appointed Bush & Associates CPA as our independent registered public accounting firm.

RISK FACTORS Set forth below are the risks that we believe are material to our investors. This section contains forward-looking statements.

Welch from doing business with any current or prospective customer of the Company or engaging in a business competitive with that of the Company during the term of her employment and for the one-year period thereafter. This agreement also contains a number of termination provisions as described in “Termination and Change in Control Arrangements” in this Item. Stock Option Grants and Restricted Stock Awards In the event of any change in the outstanding shares of our common stock by reason of a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, transfer of assets, reorganization, conversion or what the board deems to be similar circumstances, the number and kind of shares subject to outstanding options and restricted stock awards, and the exercise price of such options shall be appropriately adjusted.

RISK FACTORS Set forth below are the risks that we believe are material to our investors. This section contains forward-looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements appearing just before the section captioned “ BUSINESS ” in Item 1 above.

This discussion is provided as a supplement to and should be read in conjunction with our consolidated financial statements for the years ended December 31, 2024 and 2023 and the accompanying notes included elsewhere in this Report. All share totals reported herein have been adjusted to reflect our 1-for-18 reverse stock split, which was effective December 21, 2023. Overview We are a leading identity access management (IAM) platform provider for the enterprise and large-scale customer and civil ID solutions.

This discussion is provided as a supplement to and should be read in conjunction with our consolidated financial statements for the years ended December 31, 2025 and 2024 and the accompanying notes included elsewhere in this Report. All share totals reported herein have been adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026. Overview We are a leading identity access management (IAM) platform provider for the enterprise and large-scale customer and civil ID solutions.

RISK FACTORS We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

RISK FACTORS We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. An investment in our common stock involves a high degree of risk. You should carefully read and consider all of the risks described below, together with all of the other information contained or referred to in this report, before making an investment decision with respect to our common stock.

RISK FACTORS We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

An investment in our common stock involves a high degree of risk. You should carefully read and consider all of the risks described below, together with all of the other information contained or referred to in this report, before making an investment decision with respect to our common stock. If any of the following events occur, our financial condition, business and results of operations (including cash flows) may be materially adversely affected.

Business – Regulation and Supervision of the Bank. Our profitability is dependent to a large extent on our net interest income, which is the difference between the interest received from our interest-earning assets and the interest expense incurred on our interest-bearing liabilities. Our activities, like all financial institutions, inherently involve the assumption of interest rate risk.

Business – Regulation and Supervision of the Bank. The Company’s profitability is dependent to a large extent on net interest income, which is the difference between interest received on interest-earning assets and interest paid on interest-bearing liabilities. Interest rate risk is the risk that changes in market interest rates will adversely affect the Company’s earnings and underlying economic value and is the primary market risk affecting the Company’s financial performance.

Our activities, like all financial institutions, inherently involve the assumption of interest rate risk. Interest rate risk is the risk that changes in market interest rates will have an adverse impact on the institution’s earnings and underlying economic value. Interest rate risk is determined by the maturity and repricing characteristics of an institution’s assets, liabilities and off-balance-sheet contracts.

The Company’s profitability is dependent to a large extent on net interest income, which is the difference between interest received on interest-earning assets and interest paid on interest-bearing liabilities. Interest rate risk is the risk that changes in market interest rates will adversely affect the Company’s earnings and underlying economic value and is the primary market risk affecting the Company’s financial performance. Interest rate risk is determined by the maturity and repricing characteristics of the Company’s assets, liabilities and off-balance-sheet contracts.

Business segments Business segments – The Company’s operations are managed along two operating segments, consisting of banking operations performed by the Bank and trust and investment services performed by the Trust Company. While the chief operating decision maker uses financial information related to these segments to analyze business performance and allocate resources, the trust and investment services segment does not meet the quantitative threshold under GAAP to be considered a reportable segment. As such, these operating segments are aggregated into a single reportable operating segment in the consolidated financial statements.

Business segments Business segments – The Company’s operations are managed along two operating segments, consisting of banking operations performed by the Bank and trust and investment services performed by the Trust Company. The trust and investment services segment does not meet the quantitative threshold under GAAP to be considered a reportable segment. As such, these operating segments are aggregated into a single reportable operating segment in the consolidated financial statements.

On March 1, 2023 the SEC’s Division of Enforcement filed a Motion for Summary Disposition, on March 15, 2023, IEH filed an opposition brief to the SEC Division of Enforcement’s Motion for Summary Disposition, and on March 29, 2023, the SEC’s Division of Enforcement filed a Reply in Support of its Motion for Summary Disposition. On December 22, 2023, the Company filed a Cross-Motion for Summary Disposition. The SEC’s Division of Enforcement filed an opposition to the Company’s Cross-Motion for Summary Disposition on February 21, 2024.

On February 18, 2025, the Company submitted a request for expediting the resolution of the administrative proceeding. On October 7, 2025, the Company filed a motion asking the SEC to grant the Company’s December 22, 2023 Cross-Motion for Summary Disposition or, alternatively, to schedule a hearing so that the case can proceed to a prompt resolution. On January 14, 2026, the SEC granted the Company’s motion for summary disposition, denied the Division of Enforcement’s motion for summary disposition, and dismissed the administrative proceeding against the Company.

On December 22, 2023, the Company filed a Cross-Motion for Summary Disposition. The SEC’s Division of Enforcement filed an opposition to the Company’s Cross-Motion for Summary Disposition on February 21, 2024. On March 4, 2024, the Company filed a Reply in Support of its Motion for Summary Disposition.

On October 7, 2025, the Company filed a motion asking the SEC to grant the Company’s December 22, 2023 Cross-Motion for Summary Disposition or, alternatively, to schedule a hearing so that the case can proceed to a prompt resolution. On January 14, 2026, the SEC granted the Company’s motion for summary disposition, denied the Division of Enforcement’s motion for summary disposition, and dismissed the administrative proceeding against the Company. The OTCQX is the highest tier of the OTC Marketplace.

We appear on the Military DLA Qualified Product Listing (“QPL”) MIL-DTL-55302 and supply customer requested modifications to this specification. 20 The customers we service by industry as a percentage of total revenue is provided below: For the Fiscal Years Ended March 31, 2025 2024 Industry % % Defense 65.7 60.6 Commercial Aerospace 19.9 27.3 Space 10.6 7.8 Other 3.8 4.3 We are exposed to and impacted by macroeconomic factors and U.S., state and local government policies. Current general economic conditions, including the current levels of inflation and increased tariffs, have created uncertainties, resulting in market volatility.

We appear on the Military DLA Qualified Product Listing (“QPL”) MIL-DTL-55302 and supply customer requested modifications to this specification. 17 The customers we service by industry as a percentage of total revenue is provided below: For the Fiscal Years Ended March 31, 2026 2025 Industry % % Defense 63.2 65.7 Commercial Aerospace 25.2 19.9 Space 7.8 10.6 Other 3.8 3.8 We are exposed to and impacted by macroeconomic factors and federal state and local government policies. Current general economic conditions, including the current levels of inflation, increased energy costs and evolving tariff policies, have created uncertainties, resulting in market volatility.