UNITED STATES SECURITIES AND
 EXCHANGE COMMISSION

 Washington, D.C. 20549

 Form 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended March 31, 2024

 OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from
 _____________ to ______________

 Commission File No. 001-33861

 MOTORCAR PARTS OF AMERICA, INC.

 (Exact name of registrant as specified in its charter)

 New York

 11-2153962

 (State or other jurisdiction of

 incorporation or organization)

 (I.R.S. Employer

 Identification No.)

 2929 California Street,
 Torrance, California

 90503

 (Address of principal executive offices)

 Zip Code

 Registrant's telephone number, including area code: ( 310) 212-7910

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading symbol(s)

 Name of each exchange on which registered

 Common Stock, par value $0.01 per share

 MPAA

 The Nasdaq Global Select Market

 Securities registered pursuant to Section 12(g) of the Act: None

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
 1934 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 the past 90 days. Yes No

 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
 Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
 No

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
 or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
 new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal
 control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities
 are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 Indicate by
 check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to
 §240.10D-1(b).

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 As of September 30, 2023, which was the last business day of the registrant's most recently completed fiscal second quarter, the aggregate market value
 of the registrant's common stock held by non-affiliates of the registrant was approximately $ 151,868,000 based on the closing sale price as
 reported on the NASDAQ Global Select Market.

 There were 19,662,380 shares of common
 stock outstanding as of June 4, 2024.

 DOCUMENTS INCORPORATED BY REFERENCE:

 In accordance with General Instruction G (3) of Form 10-K, the information required by Part III hereof will either be incorporated into this Form 10-K by reference to the
 registrant's Definitive Proxy Statement for the registrant's next Annual Meeting of Stockholders filed within 120 days of March 31, 2024 or will be included in an amendment to this Form 10-K filed within 120 days of March 31, 2024.

 Item 1. Business

 Item 1A. Risk Factors

 Item 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item 2. Properties

 Item 3. Legal Proceedings

 Item 4. Mine Safety Disclosures

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6. Selected Financial Data

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 Item 8. Financial Statements and Supplementary Data

 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A. Controls and Procedures

 Item 9B. Other Information

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10. Directors, Executive Officers and Corporate Governance

 Item 11. Executive Compensation

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13. Certain Relationships and Related Transactions, and Director Independence

 Item 14. Principal Accountant Fees and Services

 Item 15. Exhibits, Financial Statement Schedule

 Item 16. Form 10-K Summary

 SIGNATURES

 MOTORCAR PARTS OF AMERICA, INC.

 GLOSSARY

 The following terms are frequently used in the text of this report and have the meanings indicated below.

 "Used Core" — An automobile part which has previously been used in the operation of a vehicle. Generally, the Used Core is an original equipment ("OE") automobile part installed by the vehicle manufacturer and
 subsequently removed for replacement. Used Cores contain salvageable parts, which are an important raw material in the remanufacturing process. We obtain most Used Cores by providing credits to our customers for Used Cores returned to us under
 our core exchange programs. Our customers receive these Used Cores from consumers who deliver a Used Core to obtain credit from our customers upon the purchase of a newly remanufactured automobile part. When sufficient Used Cores are not
 available from our customers, we purchase Used Cores from core brokers, who are in the business of buying and selling Used Cores. The Used Cores purchased from core brokers or returned to us by our customers under the core exchange programs,
 and which have been physically received by us, are part of our raw material and work-in-process inventory. Used Cores returned by consumers to our customers but not yet returned to us are classified as contract assets until we physically
 receive these Used Cores.

 "Remanufactured Core" — The Used Core underlying an automobile part that has gone through the remanufacturing process and through that process has become part of a newly remanufactured automobile part. The
 remanufacturing process takes a Used Core, breaks it down into its component parts, replaces those components that cannot be reused and reassembles the salvageable components of the Used Core and additional new components into a
 remanufactured automobile part. Remanufactured Cores held for sale at our customer locations are included in long-term contract assets. The Remanufactured Core portion of stock adjustment returns are classified as contract assets
 until we physically receive them.

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 Unless the context otherwise requires, all references in this Annual Report on Form 10-K to "the Company," "we," "us," "MPA," and "our" refer to Motorcar Parts of America, Inc. and its subsidiaries.

 This Form 10-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our future performance that involve risks and uncertainties. All
 statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about our strategic initiatives, operational plans and objectives, expectations for economic conditions and recovery
 and future business and financial performance, as well as statements regarding underlying assumptions related thereto. They include, among others, factors related to the timing and implementation of strategic initiatives, the highly
 competitive nature of our industry, demand for our products and services, complexities in our inventory and supply chain, challenges with transforming and growing our business. Except as required by law, we undertake no obligation to revise or
 update publicly any forward-looking statements for any reason. Therefore, you should not place undue reliance on those statements. Please refer to " Item 1A. Risk Factors " included in this report and other filings made by us with the Securities and Exchange Commission ("SEC") for a description of these and other risks and uncertainties
 that could cause actual results to differ materially from those projected or implied by the forward-looking statements.

 Item 1.

 Business

 General

 We are a leading supplier of automotive aftermarket non-discretionary replacement parts and test solutions and diagnostic equipment -- building upon industry leading technology to be "The Global Leader for Parts and Solutions that Move Our World Today and Tomorrow". We operate in the $130 billion non-discretionary
 automotive aftermarket for replacement hard parts in North America. Our hard parts products include light-duty rotating electrical products, wheel hub products, brake-related products, and turbochargers. In addition, we sell test solutions
 and diagnostic equipment, which were added with our acquisitions of D&V Electronics Ltd. in July 2017 and Mechanical Power Conversion, LLC in December 2018 and heavy-duty rotating electrical
 products, which were added with our January 2019 acquisition of Dixie Electric, Ltd.

 The automotive aftermarket is divided into two markets. The first is the do-it-yourself ("DIY") market, which is generally serviced by the large retail chain outlets and on-line resellers. Consumers who
 purchase parts from the DIY market generally install parts into their vehicles themselves. In most cases, this is a less expensive alternative than having the repair performed by a professional installer. The second is the professional
 installer market, commonly known as the do-it-for-me ("DIFM") market. Traditional warehouse distributors, dealer networks, and commercial divisions of retail chains service this market. Generally, the consumer in this market is a professional
 parts installer. Our products are distributed to both the DIY and DIFM markets. The distinction between these two markets has become less defined over the years, as retail outlets leverage their distribution strength and store
 locations to attract customers.

 D emand for replacement parts generally increases with the age of vehicles and miles driven, which provides favorable opportunities for sales of our products. The current
 population of light-duty vehicles in the U.S. is approximately 288 million, and the average age of these vehicles is approximately 13 years and is expected to continue to grow, in particular during recession years. Although miles driven can
 fluctuate for various reasons, including fuel prices, they have been generally increasing for several years.

 In addition, we operate in the $11 billion-plus rapidly emerging global market for automotive test solutions and diagnostic equipment and see the opportunity for accelerating growth rates for today and the future
 as electrification becomes increasingly important around the world. We also operate in the $700 million market for medium and heavy-duty automotive aftermarket replacement parts for truck, industrial, marine, and agricultural applications.

 Growth Strategies and Key Initiatives

 With a scalable infrastructure and abundant growth opportunities, we are focused on growing our aftermarket business in the North American marketplace and growing our leadership position in the test solutions and
 diagnostic equipment market by providing innovative and intuitive solutions to our customers.

 To accomplish our strategic vision, we are focused on the following key initiatives:

 Hard Parts

 •

 Grow our current product lines both with existing and potential new customers. We continue to develop and offer current and new sales programs to ensure that we are
 supporting our customers' business needs. We remain dedicated to managing growth and continuing to focus on enhancements to our infrastructure and making investments in resources to support our customers. We have globally positioned
 manufacturing and distribution centers to support our continuous growth.

 •

 Introduction of new product lines. We continue to strive to expand our business by exploring new product lines, including working with our customers to identify
 potential new product opportunities.

 •

 Creating value for our customers. A core part of our strategy is ensuring that we add meaningful value for our customers. We
 consistently support and pilot our customers' supply management initiatives in addition to providing demand analytics, inventory management services, online training guides, and market share and retail store layout information to our
 customers.

 •

 Technological innovation. We continue to expand our research and development teams as we further develop in-house technologies and advanced testing methods. This
 elevated level of technology aims to deliver our customers high quality products and support services.

 Test Solutions and Diagnostic Equipment

 •

 We provide industry-leading test solutions and diagnostic equipment to both original equipment manufacturers and the aftermarket. We are continuously upgrading our
 equipment to accommodate testing for the latest alternator and starter technology for both existing and new customers. These software and hardware upgrades are also available for existing products that the customer is using. In
 addition, we provide industry leading maintenance and service support to provide a better end-user experience and value to our customers.

 •

 Market and grow our new product lines on a global basis. We offer products and services that cater to automotive test solutions and
 diagnostic equipment for inverter and electric motors for both development and production. In addition, we provide power supply hardware and emulation software diagnostic products. Our strategy is to market these products on a global
 basis to original equipment manufacturers as well as suppliers to the original equipment manufacturers for development and production of electric vehicles and electric vehicle charging systems. We believe this is a rapidly emerging
 business and see the opportunity for accelerating growth rates. In addition, we are well-positioned to supply the aerospace industry to support its shift to electric power-driven control systems in airplanes.

 Heavy Duty

 •

 Market and grow our innovative design solutions and commitment to quality. We continue to develop and improve product performance, ease
 of installation, and coverage simplification to deliver installation-ready products to provide extended service life and reduced downtime for our customers.

 Products

 We carry approximately 42,000 stock keeping units ("SKUs") to support automotive aftermarket non-discretionary replacement parts and test solutions and diagnostic equipment. Our products are sold under our customers' widely recognized
 private label brand names and our own brand names including Quality-Built, Pure Energy, D&V Electronics, Dixie Electric, and DelStar.

 Our products include: (i) rotating electrical products such as alternators and starters, (ii) wheel hub assemblies and bearings, (iii) brake-related products, which include brake calipers, brake
 boosters, brake rotors, brake pads, and brake master cylinders, (iv) turbochargers, (v) test solutions and diagnostic equipment products, and (vi) heavy-duty products.

 Segment Reporting

 Our three operating segments are as follows:

 •

 Hard Parts, which includes (i) light duty rotating electric products such as alternators and starters, (ii) wheel hub products, (iii) brake-related products, including brake calipers, brake
 boosters, brake rotors, brake pads and brake master cylinders, and (iv) turbochargers,

 •

 Test Solutions and Diagnostic Equipment, which includes (i) applications for combustion engine vehicles, including bench-top testers for alternators and starters, (ii) equipment for the pre-
 and post-production of electric vehicles, and (iii) software emulation of power system applications for the electrification of all forms of transportation (including automobiles, trucks, the emerging electrification of systems within
 the aerospace industry, and electric vehicle charging stations), and

 •

 Heavy Duty, which includes non-discretionary automotive aftermarket replacement hard parts for heavy-duty truck, industrial, marine, and agricultural applications.

 Our Hard Parts operating segment meets the criteria of a reportable segment. The Test Solutions and Diagnostic Equipment and Heavy Duty segments are not material, are not required to be separately reported, and
 are included within the "all other" category. See Note 19 of the notes to consolidated financial statements for more information.

 Sales, Marketing and Distribution

 We sell our hard parts products to the largest automotive chains, including Advance Auto Parts, AutoZone, Genuine Parts (NAPA), and O'Reilly Auto Parts with an aggregate of approximately 25,000 retail outlets. In addition, these products are
 sold to warranty replacement programs ("OES") customers, professional installers, and a diverse group of automotive warehouse distributors. Our heavy-duty products, which have some overlap with the light-duty automotive aftermarket, are also
 sold via specialty distribution channels through OES, fleet, and auto electric outlets. We also sell test solutions and diagnostic equipment to the automotive chains listed above and via direct and indirect sales channels, technical
 conferences, and trade shows to some of the world's leading automotive companies, and to the aerospace/aviation sector. We offer testing services at our technical center located in Detroit, Michigan. During fiscal 2024, we sold approximately
 98% of our products in North America, with approximately 2% of our products sold in Asian and European countries.

 We publish printed and electronic catalogs with part numbers and applications for our products along with a detailed technical glossary and informational database. In addition, we publish printed and electronic product and service brochures
 and data sheets for our test solutions and diagnostic equipment and service offerings. We believe that we maintain one of the most extensive catalog and product identification systems available to the market.

 We primarily ship our products from our facilities and various third-party warehouse distribution centers in North America, including our 410,000 square foot distribution center in Tijuana, Mexico.

 Customers: Customer Concentration. While we continually seek to diversify our customer base, we currently derive, and have historically derived, a substantial portion of our sales from a small number
 of large customers. Sales to our three largest customers in the aggregate represented 83%, 84%, and 85%, and sales to our largest customer, represented 35%, 37%, and 38% of our net sales during fiscal 2024, 2023 and 2022, respectively. Any
 meaningful reduction in the level of sales to any of these customers, deterioration of the financial condition of any of these customers or the loss of any of these customers could have a materially adverse impact on our business, results of
 operations, and financial condition.

 Customer Arrangements: Impact on Working Capital. We have various length agreements with our customers. Under these agreements, which in most cases have initial terms of at least four years, we are
 designated as the exclusive or primary supplier for specified categories of our products. Because of the very competitive nature of the market and the limited number of customers for these products, our customers have sought and obtained price
 concessions, significant marketing allowances and more favorable delivery and payment terms in consideration for our designation as a customer's exclusive or primary supplier. These incentives differ from contract to contract and can include:
 (i) the purchase of Remanufactured Core inventory on customer shelves, (ii) the issuance of a specified amount of credits against receivables in accordance with a schedule set forth in the relevant contract, (iii) support for a particular
 customer's research or marketing efforts provided on a scheduled basis, (iv) discounts granted in connection with each individual shipment of product, and (v) store expansion or product development support. These contracts typically require
 that we meet ongoing performance standards.

 While these longer-term agreements strengthen our customer relationships, the increased demand for our products often requires that we increase our inventories and personnel. Customer demands that we purchase and maintain their
 Remanufactured Core inventory also requires the use of our working capital. The marketing and other allowances we typically grant our customers in connection with our new or expanded customer relationships adversely impact near-term revenues,
 profitability and associated cash flows from these arrangements. However, we believe the investment we make in these new or expanded customer relationships will improve our overall liquidity and cash flow from operations over time.

 Competition

 Our business is highly competitive. We compete with several large and medium-sized companies, including (i) BBB Industries, First Brands and DRIV for hard parts, (ii) Burke Porter and Loccionni for test solutions and diagnostic equipment,
 and (iii) a large number of smaller regional and specialty companies. We also compete with other overseas manufacturers, particularly those located in China who are increasing their operations and could become a significant competitive force in
 the future.

 We believe that the reputations for quality, reliability, and customer service that a supplier provides are significant factors in our customers' purchase decisions. We continuously strive to increase our competitive and technical advantages
 as the industry and technologies rapidly evolve. Our advanced power emulators are protected by U.S. patents that provide us a strong competitive barrier for a large segment of the market and allow us to be lower cost and more efficient.

 We believe our ability to educate also helps to distinguish us from many of our competitors. We have created an online library of video courses, aimed at supporting our customers as they seek to train the next generation of technicians. We
 also offer live and web-based training courses via our education center within our Torrance, California headquarters. We believe our ability to provide quality replacement automotive parts, rapid and reliable delivery capabilities as well as
 promotional support also distinguishes us from many of our competitors. In addition, favorable pricing, our core exchange programs, and extended payment terms are also very important competitive factors in customers' purchase decisions.

 We seek to protect our proprietary processes and other information by relying on trade secret laws and non-disclosure and confidentiality agreements with certain of our employees and other persons who have access to that information.

 Operations

 Production Process for Non-discretionary Replacement Parts. The majority of our products are remanufactured at our facilities in Mexico, Canada, and to a lesser extent in Malaysia. We continue to
 maintain production of certain remanufactured units that require specialized service at our Torrance, California facility. We also manufacture and assemble new products at our facilities in Canada, Malaysia and India. Our remanufacturing
 process begins with the receipt of Used Cores from our customers or core brokers. The Used Cores are evaluated for inventory control purposes and then sorted by part number. Each Used Core is completely disassembled into its fundamental
 components. The components are cleaned in an environmentally sound process that employs customized equipment and cleaning materials in accordance with the required specifications of the particular component. All components known to be subject
 to major wear and those components determined not to be reusable or repairable are replaced by new components. Non-salvageable components of the Used Core are sold as scrap.

 After the cleaning process is complete, the salvageable components of the Used Core are inspected and tested as prescribed by our IATF 16949 and ISO 9001:2015 approved quality programs, which have been implemented throughout the production
 processes. IATF 16949 and ISO 9001:2015 are internationally recognized, world class, quality programs. Upon passage of all tests, which are monitored by designated quality control personnel, all the component parts are assembled in a work cell
 into a finished product. Inspection and testing are conducted at multiple stages of the remanufacturing process, and each finished product is inspected and tested on equipment designed to simulate performance under operating conditions. To
 maximize remanufacturing efficiency, we store component parts ready for assembly in our production facilities.

 Our remanufacturing processes combine product families with similar configurations into dedicated factory work cells. This remanufacturing process, known as "lean manufacturing," eliminated a large number of inventory moves and the need to
 track inventory movement through the remanufacturing process. This manufacturing enables us to significantly reduce the time it takes to produce a finished product. We continue to explore opportunities for improving efficiencies in our
 remanufacturing process.

 Production Process for Test Solutions and Diagnostic Equipment. Our test solutions and diagnostic equipment are engineered and manufactured in North America at facilities in Toronto, Canada and
 Binghamton, New York, U.S. Our facility in Canada is certified under ISO 9001:2015 quality management system, which mandates that we foster continuous improvement to our manufacturing processes. Materials for custom systems are purchased in a
 "just-in-time" environment while materials for standard systems are purchased in economic quantities. All materials and components are inspected and tested when required. Certain components require certificates of compliance or test results
 from our vendors prior to shipping to us. Our manufacturing process combines skilled labor from certified and licensed technicians with raw materials, manufactured components, purchased components, and purchased capital components to complete
 our test solutions and diagnostic equipment. All test solutions and diagnostic equipment are inspected and tested per our quality control program, which has been approved by the ISO 9001:2015 quality management system.

 Our facility in New York, U.S., manufactures test solutions and diagnostic equipment using purchased electronic and custom components that are primarily assembled at this facility. While some circuit card assemblies are handled by outside
 subcontractors, most of the assemblies are manufactured in-house along with the fabrication of electronic subassemblies. Quality control and testing is completed on these subassemblies prior to their final installation into the overall
 equipment rack that includes mechanical, electrical and thermal management operations. Final inspection and acceptance testing are performed to predefined procedures prior to the equipment being packaged in a crate for shipment.

 Used Cores. The majority of our Used Cores are obtained from customers through the core exchange programs. To supplement Used Cores received from our customers we purchase Used Cores from core
 brokers. Although this is not a primary source of Used Cores, it is a critical source for meeting our raw material demands. Remanufacturing consumes, on average, more than one Used Core for each remanufactured unit produced since not all Used
 Cores are reusable. The yield rates depend upon both the product and customer specifications.

 We recycle materials, including metal from the Used Cores and corrugated packaging, in keeping with our focus as a remanufacturer to lessen our footprint on the environment.

 Purchased Finished Goods. In addition to our remanufactured goods, we also purchase finished goods from various approved suppliers, including several located in Asia. We perform supplier qualification,
 product inspection and testing according to our IATF 16949 or ISO 9001:2015 certified quality systems to assure product quality levels. We also perform periodic site audits of our suppliers' manufacturing facilities.

 Environmental, Social and Governance (ESG) and Human Capital

 Our Culture. Our Company was founded in 1968 on the values of integrity, common decency and respect for others. Our core values are
 Excellence, Passion/Productivity, Innovation/Integrity, Community, and Quality ("EPICQ") and characterize our daily corporate focus. These values are embodied in our Code of Ethics, which has been adopted by our Board of Directors to serve as a
 statement of principles to guide our decision-making and reinforce our commitment to these values in all aspects of our business. We believe that our commitment to our Company, our employees and the communities within which we operate has led
 to high employee satisfaction and low employee turnover, and our commitment to our customers, suppliers and business partners has resulted in high customer satisfaction, as evidenced by the customer awards that we routinely win, and
 decades-long customer relationships.

 Environmental. Environmental and sustainable processes have been our hallmark since the Company's establishment. We take our commitment to environmental stewardship seriously. The
 use of Remanufactured Cores results in a substantial reduction of raw materials and energy consumption. With the potential to significantly reduce material and energy consumption, industry sources believe that remanufacturing is the most
 efficient and sustainable process for producing aftermarket replacement parts – making our business practices green by nature. See more information on this at investors.motorcarparts.com/esg. Highlights
 of our eco-friendly remanufacturing processes include:

 •

 sorting the Used Cores returned by customers utilizing an innovative and efficient core-sorting process;

 •

 reconditioning and re-utilizing durable components after passing rigorous testing processes;

 •

 savings of raw materials due to a reduction in the required materials used in the remanufacturing production process, compared with new product processes; and

 •

 recycling of water, cardboard, and metal.

 Human Capital. We regard our team members as integral to our strategic growth and success. We recognize that safety, inclusion, and offering exciting opportunities are fundamental
 to facilitating high retention and satisfaction of high performance team members. Equally important, we provide competitive compensation and excellent benefit programs, and support numerous programs that build connections between our team
 members and their communities. We believe our team members share our corporate ethics and values, as demonstrated in their daily interactions with customers, co-workers, vendors, and the public at large.

 As of March 31, 2024, we employed approximately 5,900 people, with 400 people in the United States, 5,000 people in Mexico, 200 people Canada, and 300 people in Malaysia and China. Approximately 5,400 people are production employees. We have
 non-union and unionized facilities. Approximately 4,900 production employees are covered by a local union. We believe we have a strong relationship with the union that represents our employees.

 Our facilities are located in labor markets with readily available access to skilled and unskilled workers. Our relationship and communication with our unionized and non-represented workforce is good.

 Inclusion and Diversity. Our board is ethnically diverse and comprised of 8 independent directors, including three women. We believe an inclusive workforce is critical to our
 success, with an ongoing focus on the hiring, retention, and advancement of women and other underrepresented ethnic groups. We employ 37% women and 63% men globally. In the United States, 73% of our workforce are considered ethnic minorities.

 Health, Safety and Wellness. The success of our business is connected to the safety and well-being of our team members and their families. We provide our employees and their
 families with flexible and convenient health and wellness programs – including protection and security to lessen concerns about missing work and the potential financial impact. Our programs are intended to support the physical and mental
 well-being with the tools and resources for employees to improve or maintain their health, and we encourage engagement in healthy behaviors for team members and their families.

 Compensation and benefits. We provide competitive compensation and benefit programs that meet the needs of our employees, and are tailored to their local markets. In addition to
 wages and salaries, these programs may include annual cash bonuses, stock awards, a 401(k) Plan, healthcare, and insurance, and implemented methodologies to manage performance, provide feedback and develop talent.

 Social Responsibility. We are firmly committed to social responsibility. While safety, respect, and inclusion have always been fundamental to our company, these qualities are more
 important than ever. Our socially responsible initiatives include subsidized food programs for certain employees, donations to community organizations, sponsorship of sport teams and weekend family events.

 Information Security and Risk Oversight

 We have an information security risk program committed to regular risk management practices surrounding the protection of confidential data. This program includes various technical controls, including security monitoring, data leakage
 protection, network segmentation and access controls around the computer resources that house confidential or sensitive data. We have also implemented employee awareness training programs around phishing, malware, and other cyber risks. We
 continually evaluate the security environment surrounding the handling and control of our critical data and have instituted additional measures to help protect us from system intrusion or data breaches.

 Our Board of Directors appointed the Audit Committee with direct oversight of our: (i) information security policies, including periodic assessment of risk of information security breach, training program, significant threat changes and
 vulnerabilities and monitoring metrics and (ii) effectiveness of information security policy implementation. Our Audit Committee is comprised entirely of independent directors, one of whom has significant work experience related to information
 security issues or oversight. Management will report information security instances to the Audit Committee as they occur, if material, and will provide a summary multiple times per year to the Audit Committee.

 Governmental Regulation

 Our operations are subject to various regulations governing, among other things, emissions to air, discharge to waters, and the generation, handling, storage, transportation, treatment and disposal of waste and other materials. We believe
 that our businesses, operations and facilities have been and are being operated in compliance in all material respects with applicable environmental and health and safety laws and regulations, many of which provide for substantial fines and
 criminal sanctions for violations. Potentially significant expenditures, however, could be required in order to comply with evolving environmental and health and safety laws, regulations or requirements that may be adopted or imposed in the
 future.

 Access to Public Information

 We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available free of charge to the public over the Internet at the SEC's website at www.sec.gov.
 In addition, our SEC filings and Code of Ethics are available free of charge on our website www.motorcarparts.com. The information contained on the websites referenced in this Form 10-K is not
 incorporated by reference into this filing. Further, our references to website URLs are intended to be inactive textual references only.

 Item 1A.

 Risk Factors

 While we believe the risk factors described below are all the material risks currently facing our business, additional risks we are not presently aware of or that we currently believe are immaterial may also impair our business operations.
 Our financial condition or results of operations could be materially and adversely impacted by these risks, and the trading price of our common stock could be adversely impacted by any of these risks. In assessing these risks, you should also
 refer to the other information included in or incorporated by reference into this Form 10-K, including our consolidated financial statements and related notes thereto appearing elsewhere or incorporated by reference in this Form 10-K.

 Risks Related to Economic, Political and Health Conditions

 Developments in global and local conditions, such as international trade disputes, a foreign or domestic debt crisis, currency volatility, natural disasters, war, such as the war in Ukraine and
 the conflict in Israel, Gaza and surrounding areas, epidemics and pandemics, the fear of spread of contagious diseases and civil unrest, may have a material impact on our results of operations and financial condition, and the continuation of or
 worsening of such conditions could have a similar or worse impact.

 Several conditions have led to adverse impacts on the U.S. and global economies and created uncertainty regarding the potential effects on our employees, supply chains, operations, and customer demand
 including international trade disputes, a foreign or domestic debt crisis, currency volatility, natural disasters, war, such as the war in Ukraine and the conflict in Israel, Gaza and surrounding areas, epidemics and pandemics, the fear of
 spread of contagious diseases and civil unrest. Certain of these conditions may impact our operations and the operations of our customers, suppliers, and vendors in a number of ways, including but not
 limited to, the following:

 •

 supply chain delays or stoppages due to shipping delays (cargo ship, train and truck shortages as well as staffing shortages) resulting in increased freight costs, closed supplier facilities or distribution centers, reduced
 workforces, scarcity of raw materials and scrutiny or embargoing of goods from some countries or areas;

 •

 change in demand for or availability of our products as a result of our customers modifying their restocking, fulfillment, or shipping practices;

 •

 increased raw material, and other input costs;

 •

 increased working capital needs and/or an increase in trade accounts receivable write-offs as a result of increased financial pressures on our suppliers or customers; and

 •

 fluctuations in foreign currency exchange rates or interest rates.

 Unfavorable economic conditions may adversely affect our business.

 Adverse changes in economic conditions, including inflation, recession, increased fuel prices, tariffs, and unemployment levels, availability of consumer credit, taxation or instability in the financial markets
 or credit markets may either lower demand for our products or increase our operational costs, or both. In addition, elections and other changes in the political landscape could have similar effects. Such conditions may also materially impact
 our customers, suppliers and other parties with whom we do business. Our revenue will be adversely affected if demand for our products declines. The impact of unfavorable economic conditions may also impair the ability of our customers to pay
 for products they have purchased. As a result, reserves for doubtful accounts and write-offs of accounts receivables may increase, and delay or failure to collect a significant portion of amounts due on those receivables could have a material
 adverse effect upon our business, results of operations, and financial condition. In addition, we also get pressure from our suppliers to pay them faster and our customers to pay us slower, which impacts our cash flows.

 Risks Related to Our Business and Industry

 We rely on a few customers for a majority of our business, and the loss of any of these customers, significant changes in the
 prices, marketing allowances or other important terms provided to any of these customers, or adverse developments with
 respect to the financial condition of these customers, could harm our operating results.

 Our net sales are concentrated among a small number of our customers. Sales to our three largest customers in the aggregate represented 83%, and sales to our largest customer represented 35% of our net sales during fiscal 2024. We are under
 ongoing pressure from our major customers to offer lower prices, extend payment terms, increase marketing and other allowances and other terms more favorable to these customers because our sales to these customers are concentrated, and provide
 the market in which we operate is very competitive. Customer demands have put continued pressure on our operating margins and profitability, resulted in periodic contract renegotiation to provide more favorable prices and terms to these
 customers and significantly increased our working capital needs. The loss of or a significant decline in sales to any of these customers could adversely affect our business, results of operations, and financial condition. In addition, customer
 concentration leaves us vulnerable to any adverse change in the financial condition of these customers.

 We regularly review our accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality and age of the accounts receivable, and the current economic conditions that may affect a
 customer's ability to pay amounts owed to us. We participate in trade accounts receivable discount programs with our major customers. If the creditworthiness of any of our customers was downgraded, we could be adversely affected as we may be
 subjected to higher interest rates on the use of these discount programs or we could be forced to wait longer for payment. Should our customers experience significant cash flow problems, our financial position and results of operations could be
 materially and adversely affected, and our losses could include the outstanding receivable balance, Used Cores expected to be returned by customers, and the value of the Remanufactured Cores held at customers' locations. We maintain an
 allowance for credit losses that, in our opinion, provides for an adequate reserve to cover losses that may be incurred. However, we cannot assure you that our losses will not exceed our reserve for the reasons and risks above. Changes in terms
 with, significant allowances for, and collections from these customers could affect our operating results and cash flows.

 Failure to compete effectively could reduce our market share and significantly harm our financial performance.

 Our industry is highly competitive, and our success depends on our ability to compete with suppliers of automotive aftermarket products, some of which may have substantially greater financial, marketing and other resources than we do. The
 automotive aftermarket industry is highly competitive, and our success depends on our ability to compete with domestic and international suppliers of automotive aftermarket products. Due to the diversity of our
 product offering, we compete with several large and medium-sized companies, including (i) BBB Industries, First Brands and DRIV for hard parts, (ii) Burke Porter and Loccionni for test solutions and diagnostic equipment, and (iii) a large
 number of smaller regional and specialty companies. We also face competition from original equipment manufacturers, which, through their automotive dealerships, supply many of the same types of replacement parts we sell. In addition, other
 overseas competitors, particularly those located in China, are increasing their operations and are becoming a significant competitive force.

 Some of our competitors may have larger customer bases and significantly greater financial, technical and marketing resources than we do. These factors may allow our competitors to:

 •

 respond more quickly than we can to new or emerging technologies and changes in customer requirements by devoting greater resources than we can to the development, promotion and sale of automotive aftermarket products;

 •

 engage in more extensive research and development; and

 •

 allocate more money and resources on marketing and promotion.

 Increased competition could put additional pressure on us to reduce prices or take other actions, which may have an adverse effect on our operating results. We may also lose significant customers or lines of business to competitors.

 If we do not respond appropriately, the evolution of the automotive industry could adversely affect our business.

 The automotive industry is increasingly focused on the development of hybrid and electric vehicles and of advanced driver assistance technologies, with the goal of a commercially-viable, fully-automated driving experience. There has also
 been an increase in consumer preferences for mobility on demand services, such as car and ride sharing, as opposed to automobile ownership, which may result in a long-term reduction in the number of vehicles per capita. In addition, some
 industry participants are exploring transportation through alternatives to automobiles. These evolving areas have also attracted increased competition from entrants outside the traditional automotive industry. If we do not continue to innovate
 and develop, or acquire, new and compelling products that capitalize upon new technologies in response to consumer preferences, it could have an adverse impact on our results of operations. These changes may also reduce demand for our products
 for combustion engine vehicles.

 Work stoppages, production shutdowns and similar events could significantly disrupt our business.

 Because the automotive industry relies heavily on just-in-time delivery of components during the assembly and manufacture of vehicles, a work stoppage or production shutdown at one or more of our manufacturing and assembly facilities could
 have adverse effects on our business. Similarly, if one or more of our customers were to experience a work stoppage, that customer would likely halt or limit purchases of our products. We have also experienced significant disruptions in the
 supply of several key components from Asia due to work stoppages, production shutdowns, government closures, and other supply chain issues at many of our suppliers, leading to an adverse effect on our financial results.

 Interruptions or delays in obtaining component parts could impair our business and adversely affect our operating results.

 In our remanufacturing processes, we obtain Used Cores, primarily through the core exchange programs with our customers, and component parts from third-party manufacturers. To supplement Used Cores received from our customers we purchase
 Used Cores from core brokers. Historically, the Used Core returned from customers together with purchases from core brokers have provided us with an adequate supply of Used Cores. If there was a significant disruption in the supply of Used
 Cores, whether as a result of increased Used Core acquisitions by existing or new competitors or otherwise, our operating activities could be materially and adversely impacted. In addition, a number of the other components used in the
 remanufacturing process are available from a very limited number of suppliers. We are, as a result, vulnerable to any disruption in component supply, and any meaningful disruption in this supply would materially and adversely impact our
 operating results.

 Increases in the market prices of key component raw materials could increase the cost of our products and negatively impact our
 profitability.

 In addition to the continuous pressure on pricing which we have experienced from our largest customers, we also may not be able to recoup the higher costs of our products due to changes in the prices of raw materials, including, but not
 limited to, aluminum, copper, steel, and cardboard. We recover a substantial portion of our raw materials from Used Cores returned to us by our customers through the core exchange programs. To supplement Used Cores received from our customers,
 we purchase Used Cores from core brokers. Although this is not a primary source of Used Cores, it is a critical source for meeting our raw material demands. The higher prices of these Used Cores that we purchase could impact the cost of raw
 materials. Raw material price increases have had an impact on our product costs and profitability and continued increases will similarly adversely affect us.

 Our financial results are affected by automotive parts failure rates that are outside of our control.

 Our operating results are affected over the long term by automotive parts failure rates. These failure rates are impacted by a number of factors outside of our control, including the reliability and durability of vehicles and parts, the
 number of miles driven by consumers, and the average age of vehicles on the road. These trends could reduce the demand for our products and thus adversely affect our sales and profitability.

 Our reliance on foreign suppliers for some of the automotive parts we sell to our customers or included in our products presents risks to our business.

 A significant portion of automotive parts and components we use in our remanufacturing process are imported from suppliers located outside the U.S., including China and other countries in Asia. As a result, we
 are subject to various risks of doing business in foreign markets and importing products from abroad, such as the following, which we have experienced in the last fiscal year:

 significant delays in the delivery of cargo due to port security and over-crowding considerations;

 imposition of duties, taxes, tariffs or other charges on imports;

 financial or political instability in the countries in which our product is manufactured;

 potential recalls or cancellations of orders for products that do not meet our quality standards;

 disruption of imports by labor disputes or strikes and local business practices;

 inability of our non-U.S. suppliers to obtain adequate credit or access liquidity to finance their operations; and

 natural disasters, conflicts, disease epidemics and health related concerns, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods.

 We also face the following risks related to doing business in foreign markets and importing products from abroad:

 imposition of new legislation relating to import quotas or other restrictions that may limit the quantity of our product that may be imported into the U.S. from countries or regions where we do business;

 political or military conflict involving foreign countries or the U.S., which could cause a delay in the transportation of our products and an increase in transportation costs;

 heightened terrorism security concerns, which could subject imported goods to additional, more frequent or more thorough inspections, leading to delays in deliveries or impoundment of goods for extended
 periods; and

 our ability to enforce agreements with our foreign suppliers.

 Any of the foregoing factors, or a combination of them, could increase the cost or reduce the supply of products available to us and materially and adversely impact our business, financial condition, results of
 operations or liquidity.

 In addition, because we depend on independent third parties to manufacture a significant portion of our wheel hub, brake-related products, and other purchased finished goods, we cannot be certain that we will not
 experience operational difficulties with such manufacturers, such as reductions in the availability of production capacity, errors in complying with merchandise specifications, insufficient quality controls and failure to meet production
 deadlines or increases in manufacturing costs.

 An increase in the cost or a disruption in the flow of our imported products may significantly decrease our sales and profits.

 Merchandise manufactured offshore represents a significant portion of our total product purchases. A disruption in the shipping or cost of such merchandise may significantly decrease our sales and profits. In
 addition, if imported merchandise becomes more expensive or unavailable, the transition to alternative sources may not occur in time to meet our demands. Merchandise from alternative sources may also be of lesser quality and more expensive than
 those we currently import. Risks associated with our reliance on imported merchandise include disruptions in the shipping and importation or increase in the costs of imported products. For example, common risks include:

 •

 raw material shortages;

 •

 problems with oceanic shipping, including shipping container shortages;

 •

 increased customs inspections of import shipments or other factors causing delays in shipments; and

 •

 increases in shipping rates, all of which we experienced.

 As well as the following common risks, which we may experience in the future:

 •

 work stoppages;

 •

 strikes and political unrest;

 •

 economic crises;

 •

 international disputes and wars;

 •

 loss of "most favored nation" trading status by the U. S. in relations to a particular foreign country;

 •

 import duties; and

 •

 import quotas and other trade sanctions.

 Products manufactured overseas and imported into the U.S. and other countries are subject to import restrictions and duties, which could delay their delivery or increase their cost. We are regularly
 in contact with customs officials from various countries and disagree from time to time on the amounts due. In addition, government agencies and self-regulatory organizations have the ability to conduct periodic examinations of and
 administrative proceedings regarding our business.

 Our operating results may continue to fluctuate significantly.

 We have experienced significant variations in our annual and quarterly results of operations. These fluctuations have resulted from many factors, including shifts in the demand and pricing for our products, general economic conditions,
 including changes in prevailing interest rates, wage inflation and multiple minimum wage increases in Mexico in the past and likely in the future, and the introduction of new products. Our gross profit percentage fluctuates due to numerous
 factors, some of which are outside of our control. These factors include the timing and level of marketing allowances provided to our customers, actual sales during the relevant period, pricing strategies, the mix of products sold during a
 reporting period, and general market and competitive conditions. We also incur allowances, accruals, charges and other expenses that differ from period to period based on changes in our business, which causes our operating income to fluctuate.

 Natural disasters or other disruptions in our business in California and Baja California, Mexico could increase our operating expenses or cause us to lose revenues.

 A substantial portion of our operations are located in Southern California and Baja California, Mexico, including our headquarters, remanufacturing and warehouse facilities. Any natural disaster, such as an earthquake, or other damage to our
 facilities from weather, fire or other events could cause us to lose inventory, delay delivery of orders to customers, incur additional repair-related expenses, disrupt our operations or otherwise harm our business. These events could also
 disrupt our information systems, which would harm our ability to manage our operations worldwide and compile and report financial information. As a result, we could incur additional expenses or liabilities or lose revenues, which could exceed
 any insurance coverage and would adversely affect our financial condition and results of operations. During fiscal 2024, we sustained minor damage from rain, which resulted in short-term power outages.

 Our failure to maintain effective internal control over financial reporting may affect our ability to accurately report our financial results and could materially and adversely affect the market
 price of our common stock.

 Under the Sarbanes-Oxley Act, we must maintain effective disclosure controls and procedures and internal control over financial reporting, which requires significant resources and management oversight. Effective
 internal and disclosure controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our
 reputation and operating results would be harmed. We cannot assure you that our internal control over financial reporting will be effective in the future or that other material weakness will not be discovered in the future. Any failure to
 maintain effective controls or timely effect any necessary improvement of our internal and disclosure controls could harm operating results or cause us to fail to meet our reporting obligations, which could affect our ability to remain listed
 with the Nasdaq Global Select Market or subject us to adverse regulatory consequences. Ineffective internal and disclosure controls could also cause investors to lose confidence in our reported financial information, which would likely have a
 negative effect on the trading price of our stock.

 Risks Related to Our Overseas Operations

 Our offshore remanufacturing and logistic activities expose us to increased political and economic risks and place a greater
 burden on management to achieve quality standards.

 Our international operations, especially our operations in Mexico, increase our exposure to political, criminal or economic instability in the host countries and to currency fluctuations. Risks are inherent in international operations,
 including:

 •

 exchange controls and currency restrictions;

 •

 currency fluctuations and devaluations;

 •

 changes in local economic conditions;

 •

 repatriation restrictions (including the imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries);

 •

 global sovereign uncertainty and hyperinflation;

 •

 laws and regulations relating to export and import restrictions;

 •

 exposure to government actions;

 •

 increased required employment related costs; and

 •

 exposure to local political or social unrest including resultant acts of war, terrorism or similar events.

 These and other factors may have a material adverse effect on our international activities and on our business, results of operations and financial condition. Our overall success as a business depends substantially upon our ability to manage
 our foreign operations. We may not continue to succeed in developing and implementing policies and strategies that are effective in each location where we do business, and failure to do so could materially and adversely impact our business,
 results of operations, and financial condition.

 Unfavorable currency exchange rate fluctuations could adversely affect us.

 We are exposed to market risk from material movements in foreign exchange rates between the U.S. dollar and the currencies of the foreign countries in which we operate. In fiscal 2024, approximately 27% of our total expenses were in
 currencies other than the U.S. dollar. As a result of our extensive operations in Mexico, our primary risk relates to changes in the rates between the U.S. dollar and the Mexican peso. To mitigate this currency risk, we enter into forward
 foreign exchange contracts to exchange U.S. dollars for Mexican pesos. We also enter into forward foreign exchange contracts to exchange U.S. dollars for Chinese yuan in order to mitigate risk related to our purchases and payments to our
 Chinese vendors. The extent to which we use forward foreign exchange contracts is periodically reviewed in light of our estimate of market conditions and the terms and length of anticipated requirements. The use of derivative financial
 instruments allows us to reduce our exposure to the risk that the eventual net cash outflow resulting from funding the expenses of the foreign operations will be materially affected by changes in the exchange rates. We do not engage in currency
 speculation or hold or issue financial instruments for trading purposes. These contracts generally expire in a year or less. Any change in the fair value of foreign exchange contracts is accounted for as an increase or decrease to foreign
 exchange impact of lease liabilities and forward contracts in the consolidated statements of operations. We recorded a non-cash loss of $1,373,000, a non-cash gain of $2,776,000, and a non-cash loss of $316,000 due to the change in the fair
 value of the forward foreign currency exchange contracts during fiscal 2024, 2023, and 2022, respectively. In addition, we recorded gains of $5,187,000, $6,515,000, and $1,989,000 in connection with the remeasurement of foreign
 currency-denominated lease liabilities during fiscal 2024, 2023, and 2022, respectively.

 Changes in trade policy and other factors beyond our control could materially adversely affect our business.

 We are affected by trade policy, including the North American Free Trade Agreement ("NAFTA") and the World Trade Organization (the "WTO"). In December 2019, the United States, Mexico and Canada signed the amended
 United States-Mexico-Canada Agreement (the "USMCA"), which replaced NAFTA. In July 2020, the U.S. notified the United Nations of its intention to withdraw from the WTO. While the current presidential administration has rejoined the WTO, it
 remains difficult to predict what effect the USMCA, the WTO or other trade agreements and organizations will have on our business. If the U.S. were to withdraw from or materially modify any other international trade agreements to which it is a
 party or if the U.S. imposes significant additional tariffs on imports from China or other restrictions, it could have an adverse impact on our business.

 Possible new tariffs that might be imposed by the United States government could have a material adverse effect on our results of operations.

 The U.S. government has placed tariffs on certain goods imported from China and may impose new tariffs on goods imported from China and other countries, including products that we import. In retaliation, China has responded by imposing
 tariffs on a wide range of products imported from the U.S. and by adjusting the value of its currency. If renegotiations of existing tariffs are unsuccessful or additional tariffs or trade restrictions are implemented by the U.S. or other
 countries in connection with a global trade war, the resulting escalation of trade tensions could have a material adverse effect on world trade and the global economy. Even in the absence of further tariffs or trade restrictions, the related
 uncertainty and the market's fear of an economic slowdown could lead to a decrease in consumer spending, and we may experience lower net sales than expected. Reduced net sales may result in reduced operating cash flows if we are not able to
 appropriately manage inventory levels or leverage expenses.

 Risks Related to Our Indebtedness

 Our debt can impact our operating results and cash flows and limit our operations.

 As of March 31, 2024, we had $128,000,000 of debt outstanding under our credit facility, which is at variable interest rates. Fluctuations in those rates could impact our operating results and cash flows. In particular, interest rates have
 been rising recently, which increases our interest expense. The weighted average interest on our debt was 8.43% at March 31, 2024 compared with 8.12% at March 31, 2023. In addition, our credit facility has covenants that limit aspects of our
 operations.

 In addition, on March 31, 2023, we issued and sold $32,000,000 in aggregate principal amount of 10.0% convertible notes due in 2029 (the "Convertible Notes"). The issuance of shares of our common stock upon conversion of the Convertible
 Notes may dilute the ownership interests of existing stockholders and reduce our per share results of operations. Any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices
 of our common stock.

 We may also incur additional debt in the future, which could further increase our leverage, reduce our cash flow or further restrict our business.

 Our lenders may not waive future defaults under our credit agreements.

 Our credit agreement with our lenders contains certain financial and other covenants. If we fail to meet any of these covenants in the future, there is no assurance that our lenders will waive any such defaults or that we will otherwise be
 able to cure them. If we obtained a waiver, it may impose significant costs or covenants on us. In addition, as the capital markets get more volatile, it may become more difficult to obtain such waivers or refinance our debt.

 Weakness in conditions in the global credit markets and macroeconomic factors, including interest rates, could adversely affect
 our financial condition and results of operations.

 The banking industry and global credit markets also experience difficulties from time to time, and issues involving our lenders could impact our deposits, the availability, terms and cost of borrowings or our ability to refinance our debt.
 Any weakness in the credit markets could result in significant constraints on liquidity and availability of borrowing terms from lenders and accounts payable terms with vendors. These issues could also result in more stringent lending standards
 and terms and higher interest rates. In addition, we are exposed to changes in interest rates primarily as a result of our borrowing and receivable discount programs, which have interest costs that vary with interest rate movements. Any
 limitations on our ability to fund our operations could have a material adverse effect on our business, financial condition and ability to grow.

 Risks Related to Owning Our Stock

 Our stock price is volatile and could decline substantially.

 Our stock price has fluctuated in the past and may decline substantially in the future as a result of developments in our business, the volatile nature of the stock market, and other factors beyond our control. Our stock price and the stock
 market generally has, from time to time, experienced extreme price and volume fluctuations. Many factors may cause the market price for our common stock to decline, including: (i) our operating results failing to meet the expectations of
 securities analysts or investors in any period, (ii) downward revisions in securities analysts' estimates, (iii) market perceptions concerning our future earnings prospects, (iv) public or private sales of a substantial number of shares of our
 common stock, (v) adverse changes in general market conditions or economic trends, and (vi) market shocks generally or in our industry. Our stock price is also affected by volume, which impacts the ability of investors to buy or sell our stock.

 General Risk Factors

 We have made and may continue to make strategic acquisitions of other companies and businesses, and these acquisitions have and
 may continue to introduce significant risks and uncertainties, including risks related to integrating the acquired businesses and achieving benefits from the acquisitions.

 In order to position ourselves to take advantage of growth opportunities, we have made, and may continue to make, strategic acquisitions that involve significant risks and uncertainties. These risks and uncertainties include:

 •

 the difficulty in integrating newly acquired businesses and operations in an efficient and effective manner;

 •

 the challenges in achieving strategic objectives, cost savings and other benefits from acquisitions;

 •

 the potential loss of key employees of the acquired businesses;

 •

 the risk of diverting the attention of senior management from our operations;

 •

 risks associated with integrating financial reporting and internal control systems;

 •

 difficulties in expanding information technology systems and other business processes to accommodate the acquired businesses; and

 •

 future impairments of any goodwill of an acquired business.

 We may also incur significant expenses to pursue and consummate acquisitions. Any of the foregoing, or a combination of them, could cause us to incur additional expenses and materially and adversely impact our business, financial condition,
 results of operations or liquidity.

 Increasing attention to environmental, social, and governance matters may impact our business, financial results, or stock price.

 In recent years, increasing attention has been given to corporate activities related to environmental, social, and governance ("ESG") matters in public discourse and the investment community. A number of advocacy groups, both domestically
 and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including through the investment and voting practices of investment advisers, public pension funds,
 universities, and other members of the investing community. These activities include increasing attention and demands for action related to climate change and promoting the use of energy saving building materials. As they evaluate investment
 decisions, many investors and customers, look not only at company disclosures but also to ESG rating systems that have been developed by third parties to allow ESG comparisons among companies. Although we participate in a number of these
 ratings systems, we do not participate in all such systems. The criteria used in these ratings systems may conflict and change frequently, and we cannot predict how these third parties will score us, nor can we have any assurance that they
 score us accurately or other companies accurately or that other companies have provided them with accurate data. We supplement our participation in ratings systems with published disclosures of our ESG activities, but some investors may desire
 other disclosures that we do not provide. We also incur significant costs in complying with reporting obligations and could incur liability if a regulator or other third party disagrees with our statements.

 In addition, the SEC recently issued final rules that mandate additional ESG disclosure and impose other requirements on us. In addition, some of the domestic and foreign jurisdictions in which we operate could mandate additional ESG
 disclosure and impose additional requirements on us. For example, in October 2023, California passed two bills that require certain companies that do business in California to disclose their GHG emissions and climate-related financial risks
 starting in 2026. A failure to comply with investor or customer expectations and standards, which are evolving, or if we are perceived to not have responded appropriately to the growing concern for ESG issues, regardless of whether there is a
 legal requirement to do so, could also cause reputational harm to our business, cause certain investors to be unwilling to invest in our stock, which could adversely impact our ability to raise capital and could have other material adverse
 effects on us.

 Regulations related to conflict minerals could adversely impact our business.

 The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") contains provisions to improve transparency and accountability concerning the supply of certain minerals, known as "conflict minerals", originating from the
 Democratic Republic of Congo ("DRC") and adjoining countries. These rules could adversely affect the sourcing, supply, and pricing of materials used in our products, as the number of suppliers who provide conflict-free minerals may be limited.
 We may also suffer reputational harm if we determine that certain of our products contain minerals not determined to be conflict-free or if we are unable to modify our products to avoid the use of such materials. We may also face challenges in
 satisfying customers who may require that our products be certified as containing conflict-free minerals.

 The products we manufacture or contract to manufacture contain small quantities of Tin and Gold. We manufacture or contract to manufacture one product with small quantities of Tantalum. For the reporting year ending December 31, 2023, we
 surveyed 255 smelters or refiners for these minerals that are, or could be, in our supply chain. Of these, 87% were validated as Compliant or Conformant as conflict-free, per publicly available information on the Conflict Free Sourcing
 Initiative website. We have not been able to ascertain the conflict-free status of the remaining smelters or refiners.

 Our strategy for managing risks associated with conflict minerals in products includes continuing to encourage our suppliers to engage in conflict-free sourcing and obtaining data from our suppliers that is more applicable to the products we
 purchase. We continue to monitor progress on industry efforts to ascertain whether some facilities that suppliers identified are actually smelters. We do not believe conflict minerals pose risk to our operations. We are a member of the
 Automobile Industry Action Group (AIAG) and support their efforts in the conflict minerals area.

 If our technology and telecommunications systems were to fail, or we were not able to successfully anticipate, invest in or adopt technological advances in our industry, it could have an adverse
 effect on our operations.

 We rely on computer and telecommunications systems to communicate with our customers and vendors and manage our business. The temporary or permanent loss of our computer and telecommunications equipment and software systems, through
 casualty, operating malfunction, software virus or service provider failure, could disrupt our operations. In addition, our future growth may require additional investment in our systems to keep up with technological advances in our industry.
 If we are not able to invest in or adopt changes to our systems, or such upgrades take longer or cost more than anticipated, our business, financial condition and operating results may be adversely affected.

 Cyber-attacks or other breaches of information technology security could adversely impact our business and operations.

 The incidence of cyber-attacks and other breaches of information technology security have increased worldwide. Cyber-attacks or other breaches of network or information technology security may cause equipment failure or disruption to our
 operations. We may face such attacks through use of malware, computer viruses, attachments to e-mails and other means for disruption or unauthorized access The risk of a cybersecurity attack, including by computer hackers (individual or hacking
 organizations), foreign governments, and cyber terrorists, has generally increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased. The techniques and sophistication used to
 conduct cyber-attacks and breaches of IT systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time.

 We have been impacted by security incidents in the past and will likely continue to experience security incidents of varying degrees. The preventive actions we take to reduce the risk of cyber incidents and protect our information technology
 and networks may be insufficient to repel a major cyber-attack in the future. As cyber-attacks continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to
 investigate and remediate any information security vulnerabilities. In addition, our remediation efforts may not be successful. To the extent that any disruption or security breach results in a loss or damage to our data or unauthorized
 disclosure of confidential information, it could cause significant damage to our reputation, affect our relationship with our customers, suppliers and employees, and lead to claims against us and ultimately harm our business. Additionally, we
 may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future including if such security breaches result in a violation of applicable federal and state privacy and other
 laws, or subject us to private consumer, business partner, or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability. While we maintain specific
 cyber insurance coverage, which may apply in the event of various breach scenarios, the amount of coverage may not be adequate in any particular case. Furthermore, because cyber threat scenarios are inherently difficult to predict and can take
 many forms, some breaches may not be covered under our cyber insurance coverage.

 Item 1B.

 Unresolved Staff Comments

 None.

 Item 1C.

 Cybersecurity

 Material Effects of Cybersecurity Incidents

 Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations, or financial condition.
 Further information regarding cybersecurity risks can be found in Item 1A. Risk Factors - risks relating to "cyber-attacks or other breaches of information technology security could adversely impact our business and operation".

 Cybersecurity Risk Management and Strategy

 We have developed and implemented a cybersecurity program designed to provide structured and thorough cybersecurity risk management and governance. Our cybersecurity program prioritizes, among other things, prevention of unauthorized access;
 protection of sensitive information; detection, assessment, and response to cyber threats; and continuous improvement of our cybersecurity measures. We seek to achieve our cybersecurity program priorities through a multi-pronged approach to
 address cyber threats and incidents that includes (i) implementation of various industry best practices, (ii) proactive monitoring of our IT systems, (iii) ongoing employee training, (iv) quarterly phishing campaigns, (v) continued education
 for our cybersecurity team, and (vi) regular risk assessments. We also maintain cyber insurance coverage to help mitigate a portion of the potential costs in the event of covered events.

 Our cybersecurity program is aligned with various frameworks for managing cybersecurity risks, such as the National Institute of Standards and Technology Cybersecurity Framework for IT. We have an Information Technology Steering Committee
 that oversees the IT function, material projects, budgeting, and cybersecurity. In addition, we have an Incident Response Team, as highlighted in our cybersecurity policy to respond to any information security risks or incidents. These
 committees report directly to the Audit Committee of the Board of Directors, which is responsible for overall oversight of the Company's cybersecurity program.

 We rely upon both internal and external resources for evaluating and enhancing our cyber posture. Our information security team works with external cybersecurity firms to review and provide feedback on improving our cybersecurity program,
 including in the areas of data protection, threat and vulnerability management, and end-point protection. We require annual cybersecurity training by our employees, send out regular tips and memos to help our employees recognize phishing emails
 and other social engineering tactics, and provide various methods for employees to report suspicious activity that may give rise to a cyber-incident or threat. Significant results of such testing and reviews are communicated to our executive
 management team and our Audit Committee, as applicable, and are utilized in our cybersecurity program's continuous improvement process.

 In response to the growing risks associated with third-party service providers, we do not have any direct connections between our enterprise resource planning ("ERP") system to our third-party suppliers and their access to our IT systems
 that could significantly disrupt our operations.

 We maintain a set of core practices and procedures when responding to certain high-risk information security threats and incidents, which are designed to ensure appropriate resources are utilized to provide an effective, timely, and
 coordinated response in managing crises, including significant cyber threats and incidents. Our Management Risk Committee will assume overall responsibility in an effort to ensure that the appropriate functions and work streams are mobilized
 and coordinated to effectively manage any significant cyber events.

 We have been a target of cyberattacks and other hacking activities, as have certain of our third-party service providers. While our cybersecurity program is designed to prevent unauthorized access and protect sensitive information, including
 through continuous improvement of our cybersecurity measures, and we have not experienced any material cyber threats or incidents to date, we can give no assurance that we will be able to prevent, identify, respond to, or mitigate the impact of
 all cyber threats or incidents. To the extent future cyber threats or incidents result in significant disruptions and costs to our operations, reduce the effectiveness of our internal controls over financial reporting, or otherwise
 substantially impact our business, it could have a material adverse effect on our business, liquidity, financial condition, and/or results of operations. For additional discussion on our cybersecurity risks, refer to Item 1A. "Risk Factors" of
 this Form 10-K.

 Cybersecurity Governance

 Our Board of Directors oversees the management of risks inherent in the operation of our business, with a focus on the most significant risks that we face, including those related to cybersecurity. Our Board of
 Directors has delegated oversight of cybersecurity, including privacy and information security, as well as enterprise risk management to the Audit Committee. In connection with that oversight responsibility, our VP of IT and General Counsel
 meet with the Audit Committee on a quarterly basis to provide information and updates on a range of cybersecurity topics which may include our cybersecurity program and governance processes; cyber risk monitoring and management; the status of
 projects to strengthen our cybersecurity and privacy capabilities; recent significant incidents or threats impacting our operations, industry, or third-party suppliers; and the emerging threat landscape.

 Our cybersecurity team is managed by a dedicated information security team, led by our VP of IT. Our VP of IT has more than 25 years of information technology experience across various disciplines, including
 nearly 15 years of experience in the financial, re-manufacturing, and distribution industries. She has led our global information security organization for almost three years. In addition to her employment experience in the cybersecurity field,
 our VP of IT has a Bachelor's of Business Administration and Computer Information Systems, and meets regularly with other members of our executive team to provide relevant updates on our cybersecurity program.

 Item 2.

 Properties

 The following sets forth the location, type of facility, square footage and ownership interest in each of our material facilities.

 Location

 Type of Facility

 Approx.

 Square

 Feet

 or

 Owned

 Expiration

 Torrance, CA

 Remanufacturing, Warehouse, Administrative, and Office

 231,000

 March 2032

 Remanufacturing, Warehouse, and Office

 312,000

 August 2033

 Distribution Center and Office

 410,000

 December 2032

 Remanufacturing, Warehouse, and Office

 199,000

 December 2032

 Core Induction, Warehouse, and Office

 173,000

 December 2032

 Warehouse

 68,000

 June 2026

 Singapore & Malaysia

 Remanufacturing, Warehouse, and Office

 144,000

 Various through September 2032

 Shanghai, China

 Warehouse and Office

 27,000

 March 2027

 Ontario, Canada

 Remanufacturing, Warehouse, and Office

 157,000

 May 2026

 Ontario, Canada

 Manufacturing, Warehouse, and Office

 35,000

 December 2024

 We believe the above mentioned facilities are sufficient to satisfy our current and foreseeable operations.

 Item 3.

 Legal Proceedings

 We are subject to various lawsuits and claims. In addition, government agencies and self-regulatory organizations have the ability to conduct periodic examinations of and administrative proceedings regarding our
 business, and our compliance with law, code, and regulations related to all matters including but not limited to environmental, information security, taxes, levies, tariffs and such.

 Item 4.

 Mine Safety Disclosures

 Not applicable.

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Our common stock is traded on the NASDAQ Global Select Market under the trading symbol MPAA. As of June 4, 2024, there were 19,662,380 shares of common stock outstanding held by 10 holders of record.

 Purchases of Equity Securities by the Issuer

 Share repurchase activity during the fourth quarter of fiscal 2024 was as follows:

 Periods

 Total Number of

 Shares Purchased

 Average Price

 Paid Per Share

 Total Number of

 Shares Purchased

 as Part of Publicly

 Announced Plans

 or Programs

 Approximate

 Dollar Value of

 Shares That May

 Yet Be Purchased

 Under the Plans or

 Programs (1)

 January 1 - January 31, 2024:

 Open market and privately negotiated purchases

 -

 $

 -

 -

 $

 18,255,000

 February 1 - February 29, 2024:

 Open market and privately negotiated purchases

 -

 $

 -

 -

 18,255,000

 March 1 - March 31, 2024:

 Open market and privately negotiated purchases

 -

 $

 -

 -

 18,255,000

 Total

 $

 18,255,000

 (1)

 As of March 31, 2024, $18,745,000 of the $37,000,000 was utilized and $18,255,000 remains available to repurchase shares under the authorized share repurchase program, subject to the limit in our Credit Facility. We retired the
 837,007 shares repurchased under this program through March 31, 2024. Our share repurchase program does not obligate us to acquire any specific number of shares and shares may be repurchased in privately negotiated and/or open
 market transactions.

 Equity Compensation Plan Information

 The following summarizes our equity compensation plans as of March 31, 2024:

 Plan Category

 Number of securities to

 be issued upon

 exercise of outstanding

 options, warrants and

 rights

 (a)

 Weighted-average

 exercise price of

 outstanding options

 warrants and rights

 (b)

 Number of securities

 remaining available for

 future issuance under

 equity compensation plans

 (excluding securities

 reflected in column (a))

 (c)

 Equity compensation plans approved by security holders

 2,122,863

 (1

)

 $

 9.32

 (2

)

 430,129

 (3

)

 Equity compensation plans not approved by security holders

 N/A

 N/A

 N/A

 Total

 2,122,863

 $

 9.32

 430,129

 (1)

 Consists of (i) 140,299 restricted stock units ("RSUs"), 192,696 performance stock units (PSU's), and 975,884 stock options issued under the Fourth Amended and Restated 2010 Incentive Award Plan (the "2010 Plan") and (ii) 100,624
 RSUs, 581,227 PSUs, and 132,133 stock options issued under our 2022 Incentive Award Plan (the "2022 Plan").

 (2)

 The weighted average exercise price does not reflect the shares that will be issued in connection with the settlement of RSUs and PSUs, since RSUs and PSUs have no exercise price.

 (3)

 Consists of shares available for future issuance under our 2022 Plan.

 Stock Performance Graph

 The following graph compares the cumulative return to holders of our common stock for the five years ending March 31, 2024 with the NASDAQ Composite Total Returns Index and the Zacks Retail and Wholesale Auto Parts Index. The comparison
 assumes $100 was invested at the close of business on March 31, 2019 in our common stock and in each of the comparison groups, and assumes reinvestment of dividends.

 Item 6.

 Selected Financial Data

 None.

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 The following discussion contains forward-looking statements, including, without limitation, our expectations and statements regarding our outlook and future revenues, expenses, results of operations, liquidity, plans, strategies and
 objectives of management and any assumptions underlying any of the foregoing. Our actual results may differ significantly from those projected in the forward-looking statements. Our forward-looking statements and factors that might cause future
 actual results to differ materially from our recent results or those projected in the forward-looking statements include, but are not limited to, those discussed in the section titled "Cautionary Note Regarding Forward-Looking Statements" and
 "Risk Factors" of this Annual Report on Form 10-K. Except as required by law, we assume no obligation to update the forward-looking statements or our risk factors for any reason.

 Management Overview

 With a scalable infrastructure and abundant growth opportunities, we are focused on growing our aftermarket business in the North American marketplace and growing our leadership position in the test solutions and diagnostic equipment market
 by providing innovative and intuitive solutions to our customers. Our investments in infrastructure and human resources during the past few years reflects the significant expansion of manufacturing capacity to support multiple product lines.
 These investments included (i) a 410,000 square foot distribution center, (ii) two buildings totaling 372,000 square feet for remanufacturing and core sorting of brake calipers, and (iii) the realignment of production at our original 312,000
 square foot facility in Mexico.

 Highlights and Accomplishments in Fiscal 2024

 During fiscal 2024, we continued to execute our strategic plan – focusing on meaningful growth and improving profitability by leveraging our offshore infrastructure, industry position and customer relationships. The following significant
 accomplishments support our optimism moving forward:

 •

 Sales increased by 5.1 percent to a record $717.7 million, despite industry softness in the fiscal fourth quarter;

 •

 Increased market share for our brake-related product lines for both our branded Quality-Built and our private label retail brake products;

 •

 Expanded brand equity by increasing sales under the MPA portfolio of brands, including Quality-Built, in the professional installer market;

 •

 Sales growth in our recently launched Mexican market continued to accelerate, driven by market share gains through additional business being awarded by current customers;

 •

 Secured additional commitments for our JBT-1 bench-top testers that are being rolled-out to the majority of retail stores in North America;

 •

 Gross profit increased 16.3 percent to $132.6 million;

 •

 Gross margin increased 1.8 percentage points to 18.5 percent;

 •

 Opened a new facility in Malaysia to support manufacturing of wheel hub products for direct shipments to our customers;

 •

 Operating income increased 26.5 percent to $46.1 million;

 •

 Generated cash from operating activities of approximately $39.2 million;

 •

 Reduced net bank debt by $32.5 million to $114.0 million;

 •

 Restructured our credit agreement to eliminate the senior leverage ratio financial covenant;

 •

 Retired our term loans and materially reduced the balance of our revolving facility;

 •

 Instituted a vendor supply chain financing program to support our strategy for neutralization of working capital; and

 •

 Made significant progress on enhancing our Environmental, Social and Governance practices on a global basis.

 Trends Affecting Our Business

 Our business is impacted by various factors within the economy that affect both our customers and our industry, including but not limited to inflation, interest rates, disruptions in the supply chain, fuel costs,
 wage rates, and other economic conditions. Given the nature of these various factors, we cannot predict whether or for how long certain trends will continue, nor can we predict to what degree these trends will impact us in the future.

 Inflation

 The cost to manufacture and distribute our products is impacted by the cost of raw materials, finished goods, labor, and transportation. During fiscal 2024, we experienced increased costs of raw materials,
 finished goods, higher labor costs in Mexico, and other administrative costs. We can only pass our increased costs onto customers on a limited basis. Future general price inflation and its impact on costs and availability of materials could
 adversely affect our financial results.

 Interest Rates

 Interest rates remain high in an effort to curb on-going inflation. We are experiencing higher interest costs for our accounts receivable discount programs and borrowings under our credit facility, which have
 interest costs that vary with interest rate movements. The majority of our interest costs result from our accounts receivable discount programs, which had a weighted average discount rate of 6.8% for fiscal 2024 compared with 5.3% for fiscal
 2023. These continued higher interest rates and any future increases in interest rates will continue to adversely impact our financial results.

 Segment Reporting

 Our three operating segments are as follows:

 •

 Hard Parts, which includes (i) light duty rotating electric products such as alternators and starters, (ii) wheel hub products, (iii) brake-related products, including brake calipers, brake
 boosters, brake rotors, brake pads and brake master cylinders, and (iv) turbochargers,

 •

 Test Solutions and Diagnostic Equipment, which includes (i) applications for combustion engine vehicles, including bench-top testers for alternators and starters, (ii) equipment for the pre-
 and post-production of electric vehicles, and (iii) software emulation of power system applications for the electrification of all forms of transportation (including automobiles, trucks, the emerging electrification of systems within
 the aerospace industry, and electric vehicle charging stations), and

 •

 Heavy Duty, which includes non-discretionary automotive aftermarket replacement hard parts for heavy-duty truck, industrial, marine, and agricultural applications.

 Our Hard Parts operating segment meets the criteria of a reportable segment. The Test Solutions and Diagnostic Equipment and Heavy Duty segments are not material, are not required to be separately reported, and
 are included within the "all other" category. See Note 19 of the notes to consolidated financial statements for more information.

 Critical Accounting Policies

 We prepare our consolidated financial statements in accordance with generally accepted accounting principles, or GAAP, in the United States. Our significant accounting policies are discussed in detail below and in Note 2 of the notes to
 consolidated financial statements.

 In preparing our consolidated financial statements, we use estimates and assumptions for matters that are inherently uncertain. We base our estimates on historical experiences and reasonable assumptions. Our use of estimates and assumptions
 affect the reported amounts of assets, liabilities and the amount and timing of revenues and expenses we recognize for and during the reporting period. We are not currently aware of any specific event or circumstance that would require an
 update to our estimates or judgments or a revision of the carrying value of our assets or liabilities as of March 31, 2024. However, these estimates may change, as new events occur and additional information is obtained. Actual results could
 differ materially from these estimates under different assumptions or conditions.

 Our remanufacturing operations include core exchange programs for the core portion of the finished goods. The Used Cores that we acquire and are returned to us from our customers are a necessary raw material for remanufacturing. We also
 offer our customers marketing and other allowances that impact revenue recognition. These elements of our business give rise to more complex accounting than many businesses our size or larger.

 Recently Adopted Accounting Pronouncements

 Supplier Finance Programs

 In September 2022, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier
 Finance Program Obligations. This standard requires qualitative and quantitative disclosures sufficient to enable users of the financial statements to understand the nature, activity during the period, changes from period to period and
 potential magnitude of supplier finance programs. The guidance is effective for fiscal years beginning after December 15, 2022.

 During fiscal 2024, we launched a supplier finance program as part of our ongoing efforts to improve cash flow and liquidity. This program allows certain of our suppliers to sell their receivables due from us to a participating financial
 institution at the sole discretion of both the supplier and the financial institution. The program is administered by a third party. We have no economic interest in the sale of these receivables and no direct relationship with the financial
 institution. Payments to the third-party administrator are based on services rendered and are not on related to the volume or number of financing agreements between suppliers, financial institution, and the third-party administrator. We are not
 a party to agreements negotiated between participating suppliers and the financial institution. Our obligations to our suppliers, including amounts due and payment terms, are not affected by a supplier's decision to participate in this program.
 We do not provide guarantees and there are no assets pledged to the financial institution or the third-party administrator for the committed payment in connection with this program. As of March 31, 2024, we had $1,695,000 of outstanding
 supplier obligations confirmed under this program, included in accounts payable in the consolidated balance sheet.

 Accounting Pronouncements Not Yet Adopted

 Disclosure Improvements

 In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. This standard was issued in
 response to the SEC's disclosure update and simplification initiative, which affects a variety of topics within the Accounting Standards Codification. The amendments apply to all reporting entities within the scope of the affected Topics unless
 otherwise indicated. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. We are currently
 evaluating the impact this guidance will have on our financial statement disclosures.

 Reportable Segment Disclosures

 In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This standard requires us to disclose significant segment expenses that are regularly
 provided to the CODM and are included within each reported measure of segment operating results. The standard also requires us to disclose the total amount of any other items included in segment operating results, which were not deemed to be
 significant expenses for separate disclosure, along with a qualitative description of the composition of these other items. In addition, the standard also requires disclosure of the CODM's title and position, as well as detail on how the CODM
 uses the reported measure of segment operating results to evaluate segment performance and allocate resources. The standard also aligns interim segment reporting disclosure requirements with annual segment reporting disclosure requirements.
 This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact this guidance will
 have on our financial statement disclosures.

 Improvements to Income Tax Disclosures

 In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). This standard requires us to provide further disaggregated income tax disclosures for specific
 categories on the effective tax rate reconciliation, as well as additional information about federal, state/local and foreign income taxes. The standard also requires us to annually disclose our income taxes paid (net of refunds received),
 disaggregated by jurisdiction. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is to be applied prospective basis, although optional retrospective application is
 permitted. We are currently evaluating the impact this guidance will have on our financial statement disclosures.

 Inventory

 Inventory is comprised of: (i) Used Core and component raw materials, (ii) work-in-process, and (iii) remanufactured and purchased finished goods.

 Used Core, component raw materials, and purchased finished goods are stated at the lower of average cost or net realizable value.

 Work-in-process is in various stages of production and is valued at the average cost of Used Cores and component raw materials issued to work orders still open, including allocations of labor and overhead costs. Historically, work-in-process
 inventory has not been material compared to the total inventory balance.

 Remanufactured finished goods include: (i) the Used Core cost and (ii) the cost of component raw materials, and allocations of labor and variable and fixed overhead costs (the "Unit Cost"). The allocations of labor and variable and fixed
 overhead costs are based on the actual use of the production facilities over the prior 12 months which approximates normal capacity. This method prevents the distortion in allocated labor and overhead costs that would occur during short periods
 of abnormally low or high production. In addition, we exclude certain unallocated overhead such as severance costs, duplicative facility overhead costs, start-up costs, training, and spoilage from the calculation and expenses these unallocated
 overhead costs as period costs. Purchased finished goods also include an allocation of fixed overhead costs.

 The estimate of net realizable value is subjective and based on our judgment and knowledge of current industry demand and management's projections of industry demand. The estimates may, therefore, be revised if there are changes in the
 overall market for our products or market changes that in our judgment impact our ability to sell or liquidate potentially excess or obsolete inventory. Net realizable value is determined at least quarterly as follows:

 •

 Net realizable value for finished goods by customer, by product line are determined based on the agreed upon selling price with the customer for a product in the trailing 12 months. We compare the average selling price,
 including any discounts and allowances, to the finished goods cost of on-hand inventory, less any reserve for excess and obsolete inventory. Any reduction of value is recorded as cost of goods sold in the period in which the
 revaluation is identified.

 •

 Net realizable value for Used Cores are determined based on current core purchase prices from core brokers to the extent that core purchases in the trailing 12 months are significant. Remanufacturing consumes, on average, more than
 one Used Core for each remanufactured unit produced since not all Used Cores are reusable. The yield rates depend upon both the product and customer specifications. We purchase Used Cores from core brokers to supplement our yield rates
 and Used Cores not returned under the core exchange programs. We also consider the net selling price our customers have agreed to pay for Used Cores that are not returned under our core exchange programs to assess whether Used Core cost
 exceeds Used Core net realizable value on a by customer, by product line basis. Any reduction of core cost is recorded as cost of goods sold in the period in which the revaluation is identified.

 •

 We record an allowance for potentially excess and obsolete inventory based upon recent sales history, the quantity of inventory on-hand, and a forecast of potential use of the inventory. We periodically review inventory to identify
 excess quantities and part numbers that are experiencing a reduction in demand. Any part numbers with quantities identified during this process are reserved for at rates based upon our judgment, historical rates, and consideration of
 possible scrap and liquidation values which may be as high as 100% of cost if no liquidation market exists for the part. As a result of this process, we recorded reserves for excess and obsolete inventory of $17,372,000 and $16,436,000
 at March 31, 2024 and 2023, respectively. This increase in the reserve was primarily due to excess inventory of certain finished goods on hand at March 31, 2024 compared with March 31, 2023.

 We record vendor discounts as a reduction of inventories and are recognized as a reduction to cost of sales as the inventories are sold.

 Inventory Unreturned

 Inventory unreturned represents our estimate, based on historical data and prospective information provided directly by the customer, of finished goods shipped to customers that we expect to be returned, under our general right of return
 policy, after the balance sheet date. Inventory unreturned includes only the Unit Cost of a finished goods. The return rate is calculated based on expected returns within the normal operating cycle, which is generally one year. As such, the
 related amounts are classified in current assets. Inventory unreturned is valued in the same manner as our finished goods inventory.

 Contract Assets

 Contract assets consists of: (i) the core portion of the finished goods shipped to customers, (ii) upfront payments to customers in connection with customer contracts, (iii) core premiums paid to customers,
 (iv) finished goods premiums paid to customers, and (v) long-term core inventory deposits.

 Remanufactured Cores held at customers' locations as a part of the finished goods sold to the customer are classified as long-term contract assets. These assets are valued at the lower of cost or net realizable
 value of Used Cores on hand (See Inventory above). For these Remanufactured Cores, we expect the finished good containing the Remanufactured Core to be returned under our general right of return policy or a similar Used Core to be returned to
 us by the customer, under our core exchange programs, in each case for credit. Remanufactured Cores and Used Cores returned by consumers to our customers but not yet returned to us are classified as "Cores expected to be returned by
 customers", which are included in short-term contract assets until we physically receive them during our normal operating cycle, which is generally one year.

 Upfront payments to customers represent marketing allowances, such as sign-on bonuses, slotting fees, and promotional allowances provided to our customers. These allowances are recognized as an asset and amortized over the appropriate period
 of time as a reduction of revenue if we expect to generate future revenues associated with the upfront payment. If we do not expect to generate additional revenue, then the upfront payment is recognized in the
 consolidated statements of operations when payment occurs as a reduction of revenue. Upfront payments expected to be amortized during our normal operating cycle, which is generally one year, are classified as short-term contract assets.

 Core premiums paid to customers represent the difference between the Remanufactured Core acquisition price paid to customers generally in connection with new business, and the related Used Core cost. The core premiums are treated as an asset
 and recognized as a reduction of revenue through the later of the date at which related revenue is recognized or the date at which the sales incentive is offered. We consider, among other things, the length
 of our largest ongoing customer relationships, duration of customer contracts, and the average life of vehicles on the road in determining the appropriate period of time over which to amortize these premiums. These core premiums are amortized
 over a period typically ranging from six to eight years, adjusted for specific circumstances associated with the arrangement. Core premiums are recorded as long-term contract assets. Core premiums expected to be
 amortized within our normal operating cycle, which is generally one year, are classified as short-term contract assets.

 Finished goods premiums paid to customers represent the difference between the finished good acquisition price paid to customers, generally in connection with new business, and the related finished good cost, which is treated as an asset and
 recognized as a reduction of revenue through the later of the date at which related revenue is recognized or the date at which the sales incentive is offered. We consider, among other things, the length of
 our largest ongoing customer relationships, duration of customer contracts, and the average life of vehicles on the road in determining the appropriate period of time over which to amortize these premiums. Finished goods premiums are amortized
 over a period typically ranging from six to eight years, adjusted for specific circumstances associated with the arrangement. Finished goods premiums are recorded as long-term contract assets. Finished goods premiums expected to be amortized within our normal operating cycle, which is generally one year, are classified as short-term contract assets.

 Long-term core inventory deposits represent the cost of Remanufactured Cores we have purchased from customers, which are held by the customers and remain on the customers' premises. The costs of these Remanufactured Cores were established at
 the time of the transaction based on the then current cost. The selling value of these Remanufactured Cores was established based on agreed upon amounts with these customers. We expect to realize the selling value and the related cost of these
 Remanufactured Cores should our relationship with a customer end, a possibility that we consider remote based on existing long-term customer agreements and historical experience.

 Revenue Recognition

 Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our products. Revenue is measured as the amount of consideration we
 expect to receive in exchange for transferring goods or providing services. Revenue is recognized net of all anticipated returns, marketing allowances, volume discounts, and other forms of variable consideration.
 Revenue is recognized either when products are shipped or when delivered, depending on the applicable contract terms.

 The price of a finished remanufactured product sold to customers is generally comprised of separately invoiced amounts for the Remanufactured Core included in the product ("Remanufactured Core value") and the unit portion included in the
 product ("Unit Value"), for which revenue is recorded based on our then current price list, net of applicable discounts and allowances. The Remanufactured Core value is recorded as a net revenue based upon the estimate of Used Cores that will
 not be returned by the customer for credit. These estimates are subjective and based on management's judgment and knowledge of historical, current, and projected return rates. As reconciliations are completed with the customers the actual rates
 at which Used Cores are not being returned may differ from the current estimates. This may result in periodic adjustments of the estimated contract asset and liability amounts recorded and may impact the projected revenue recognition rates used
 to record the estimated future revenue. These estimates may also be revised if there are changes in contractual arrangements with customers, or changes in business practices. A significant portion of the remanufactured automotive parts sold to
 customers are replaced by similar Used Cores sent back for credit by customers under the core exchange programs (as described in further detail below). The number of Used Cores sent back under the core exchange programs is generally limited to
 the number of similar Remanufactured Cores previously shipped to each customer.

 Revenue Recognition — Core Exchange Programs

 Full price Remanufactured Cores: When remanufactured products are shipped, certain customers are invoiced for the Remanufactured Core value of the product at the full Remanufactured Core sales price. For these Remanufactured Cores, revenue
 is only recognized based upon an estimate of the rate at which these customers will pay cash for Remanufactured Cores in lieu of sending back similar Used Cores for credits under the core exchange programs. The remainder of the full price
 Remanufactured Core value invoiced to these customers is established as a long-term contract liability rather than being recognized as revenue in the period the products are shipped as we expect these Remanufactured Cores to be returned for
 credit under our core exchange programs.

 Nominal price Remanufactured Cores: Certain other customers are invoiced for the Remanufactured Core value of the product shipped at a nominal (generally $0.01 or less) Remanufactured Core price. For these nominal Remanufactured Cores,
 revenue is only recognized based upon an estimate of the rate at which these customers will pay cash for Remanufactured Cores in lieu of sending back similar Used Cores for credits under the core exchange programs. Revenue amounts are
 calculated based on contractually agreed upon pricing for these Remanufactured Cores for which the customers are not returning similar Used Cores. The remainder of the nominal price Remanufactured Core value invoiced to these customers is
 established as a long-term contract liability rather than being recognized as revenue in the period the products are shipped as we expect these Remanufactured Cores to be returned for credit under our core exchange programs.

 Revenue Recognition; General Right of Return

 Customers are allowed to return goods that their end-user customers have returned to them, whether or not the returned item is defective (warranty returns). In addition, under the terms of certain agreements
 and industry practice, customers from time to time are allowed stock adjustments when their inventory of certain product lines exceeds the anticipated sales to end-user customers (stock adjustment returns). Customers have various contractual
 rights for stock adjustment returns, which are typically less than 5% of units sold. In some instances, a higher level of returns is allowed in connection with significant restocking orders. The aggregate returns are generally limited to less
 than 20% of unit sales.

 The allowance for warranty returns is established based on a historical analysis of the level of this type of return as a percentage of total unit sales. The allowance for stock adjustment returns is based on
 specific customer inventory levels, inventory movements, and information on the estimated timing of stock adjustment returns provided by customers. Stock adjustment returns do not occur at any specific time during the year. The return rate
 for stock adjustments is calculated based on expected returns within the normal operating cycle, which is generally one year.

 The Unit Value of the warranty and stock adjustment returns are treated as reductions of revenue based on the estimations made at the time of the sale. The Remanufactured Core value of warranty and stock
 adjustment returns are provided for as indicated in the paragraph "Revenue Recognition – Core Exchange Programs".

 As is standard in the industry, we only accept returns from on-going customers. If a customer ceases doing business with us, we have no further obligation to accept additional product returns from that customer. Similarly, we accept product
 returns and grant appropriate credits to new customers from the time the new customer relationship is established.

 Contract Liability

 Contract liability consists of: (i) customer allowances earned, (ii) accrued core payments, (iii) customer core returns accruals, (iv) core bank liability, (v) finished goods liabilities, and (vi) customer
 deposits.

 Customer allowances earned includes all marketing allowances provided to customers. Such allowances include sales incentives and concessions. Voluntary marketing allowances related to a single exchange of
 product are recorded as a reduction of revenues at the time the related revenues are recorded or when such incentives are offered. Other marketing allowances, which may only be applied against future purchases, are recorded as a reduction to
 revenues in accordance with a schedule set forth in the relevant contract. Sales incentive amounts are recorded based on the value of the incentive provided. Customer allowances to be provided to customers within our normal operating cycle,
 which is generally one year, are considered short-term contract liabilities and the remainder are recorded as long-term contract liabilities.

 Accrued core payments represent the sales price of Remanufactured Cores purchased from customers, generally in connection with new business, which are held by these customers and remain on their premises. The
 sales price of these Remanufactured Cores will be realized when our relationship with a customer ends, a possibility that we consider remote based on existing long-term customer agreements and historical experience. The payments to be made to
 customers for purchases of Remanufactured Cores within our normal operating cycle, which is generally one year, are considered short-term contract liabilities and the remainder are recorded as long-term contract liabilities.

 Customer core returns accruals represent the full and nominally priced Remanufactured Cores shipped to our customers. When we ship product, we recognize an obligation to accept a similar Used Core sent back
 under the core exchange programs based upon the Remanufactured Core price agreed upon by us and our customer. The contract liability related to Used Cores returned by consumers to our customers but not yet returned to us are classified as
 short-term contract liabilities until we physically receive these Used Cores as they are expected to be returned during our normal operating cycle, which is generally one year and the remainder are recorded as long-term contract liabilities.

 The core bank liability represents the full Remanufactured Core sales price for cores returned under our core exchange programs. The payment for these returned cores are made over a contractual repayment period
 pursuant to our agreement with this customer. Payments to be made within our normal operating cycle, which is generally one year, are considered short-term contract liabilities and the remainder are recorded as long-term contract liabilities.

 Finished goods liabilities represents the agreed upon price of finished goods acquired from customers, generally in connection with new business. The payment for these finished goods are made over a contractual
 repayment period pursuant to our agreement with the customer. Payments to be made within our normal operating cycle, which is generally one year, are considered short-term contract liabilities and the remainder are recorded as long-term
 contract liabilities.

 Customer deposits represent the receipt of prepayments from customers for the obligation to transfer goods or services in the future. We classify these customer deposits as short-term contract liabilities as we
 expect to satisfy these obligations within our normal operating cycle, which is generally one year.

 Customer Finished Goods Returns Accrual

 The customer finished goods returns accrual represents our estimate of our exposure to customer returns, including warranty returns, under our general right of return policy to allow customers to return items that their end user customers
 have returned to them and from time to time, stock adjustment returns when the customers' inventory of certain product lines exceeds the anticipated sales to end-user customers. The customer finished goods returns accrual represents the Unit
 Value of the estimated returns and is classified as a current liability due to the expectation that these returns will occur within the normal operating cycle of one year. Our customer finished goods returns accrual was $38,312,000 and
 $37,984,000 at March 31, 2024 and 2023, respectively. The change in the customer finished goods returns accrual primarily resulted from the timing of returned goods authorizations ("RGAs") issued at March 31, 2024 compared with March 31, 2023.

 Income Taxes

 We account for income taxes using the liability method, which measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their
 reported amounts in the financial statements. The resulting asset or liability is adjusted to reflect changes in the tax laws as they occur. A valuation allowance is provided to reduce deferred tax assets when it is more likely than not that a
 portion of the deferred tax asset will not be realized.

 Realization of deferred tax assets is dependent upon our ability to generate sufficient future taxable income. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any
 valuation allowance recorded against our net deferred tax assets. We make these estimates and judgments about our future taxable income that are based on assumptions that are consistent with our future plans. A valuation allowance is
 established when we believe it is not more likely than not all or some of a deferred tax assets will be realized. In evaluating our ability to recover deferred tax assets within the jurisdiction in which they arise, we consider all available
 positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, past financial performance, and tax planning strategies. Deferred tax assets arising primarily as a result of net
 operating loss carry-forwards and research and development credits in connection with our Canadian operations have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. During the year
 ended March 31, 2024, we recorded a discrete non-cash valuation allowance of $38,009,000 on U.S. federal and various state deferred tax assets that is considered not more likely than not to be realized under U.S. GAAP. Should the actual amount
 differ from our estimate, the amount of our valuation allowance could be impacted.

 We have made an accounting policy election to recognize the U.S. tax effects of global intangible low-taxed income as a component of income tax expense in the period the tax arises.

 Results of Operations

 The following discussion and analysis should be read together with the financial statements and notes thereto appearing elsewhere herein.

 The following summarizes certain key operating consolidated data for the periods indicated:

 2024

 2023

 2022

 Cash flows provided by (used in) operations

 $

 39,172,000

 $

 (21,754,000

)

 $

 (44,862,000

)

 Finished goods turnover (1)

 3.7

 3.6

 3.8

 (1)

 Finished goods turnover is calculated by dividing the cost of goods sold for the year by the average of beginning and ending non-core finished goods inventory values, for each fiscal year. We believe that this provides a useful
 measure of our ability to turn our inventory into revenues.

 Fiscal 2024 Compared with Fiscal 2023

 Net Sales and Gross Profit

 The following summarizes net sales and gross profit:

 2024

 2023

 Net sales to external customers

 $

 717,684,000

 $

 683,074,000

 Cost of goods sold

 585,133,000

 569,112,000

 Gross profit

 132,551,000

 113,962,000

 Gross profit percentage

 18.5

 %

 16.7

 %

 Net Sales. Our consolidated net sales for fiscal 2024 were $717,684,000, which represents an increase of $34,610,000, or 5.1%, from fiscal 2023 of $683,074,000 due to strong demand for both our
 rotating electric and brake-related product lines.

 The following summarizes consolidated net sales by product mix:

 2024

 2023

 Rotating electrical products

 %

 %

 Brake-related products

 %

 %

 Wheel hub products

 %

 %

 Other products

 %

 %

 %

 %

 Gross Profit. Our consolidated gross profit for fiscal 2024 increased $18,589,000, or 16.3%, to $132,551,000 from $113,962,000 for
 fiscal 2023. Our consolidated gross margin, as a percentage of consolidated net sales, improved by 1.8% for fiscal 2024 to 18.5% from 16.7% for fiscal 2023. This improvement is due to better utilization of our facilities and the benefit of
 price increases that went into effect during current and prior periods.

 In addition, our gross margin for fiscal 2024 compared with fiscal 2023 was impacted by (i) additional expenses of $7,472,000 and $8,195,000, respectively, primarily due to certain costs for disruptions in the
 supply chain, (ii) amortization of core and finished goods premiums paid to customers related to new business of $10,963,000 and $11,791,000, respectively, and (iii) the non-cash quarterly revaluation
 of cores that are part of the finished goods on the customers' shelves (which are included in contract assets) to the lower of cost or net realizable value, which resulted in a write-down of $5,353,000 and $3,736,000, respectively.

 In addition, gross margin for fiscal 2023 was impacted by a $2,034,000 reduction of payroll expense for the Employee Retention Credit ("ERC").

 Operating Expenses

 The following summarizes consolidated operating expenses:

 2024

 2023

 General and administrative

 $

 57,769,000

 $

 54,756,000

 Sales and marketing

 22,481,000

 21,729,000

 Research and development

 9,995,000

 10,322,000

 Foreign exchange impact of lease liabilities and forward contracts

 (3,814,000

)

 (9,291,000

)

 Percent of net sales

 General and administrative

 8.0

 %

 8.0

 %

 Sales and marketing

 3.1

 %

 3.2

 %

 Research and development

 1.4

 %

 1.5

 %

 Foreign exchange impact of lease liabilities and forward contracts

 (0.5

)%

 (1.4

)%

 General and Administrative. Our general and administrative expenses for fiscal 2024 were $57,769,000, which represents an increase of $3,013,000, or 5.5%, from fiscal 2023 of $54,756,000. This
 increase was primarily due to (i) $2,960,000 of increased employee incentives, (ii) $1,075,000 of increased employee-related expenses which resulted from the $1,377,000 employee retention credit recorded in the prior year partially offset by
 lower expenses due to cost-cutting measures, and (iii) $1,033,000 of increased professional services. These increases were partially offset by (i) $952,000 of decreased severance and (ii) the benefit of our continued cost-cutting measures at
 our offshore locations.

 Sales and Marketing. Our sales and marketing expenses for fiscal 2024 were $22,481,000, which represents an increase of $752,000, or 3.5%, from fiscal 2023 of $21,729,000. This increase was primarily
 due to (i) the $968,000 employee retention credit recorded in the prior year and (ii) $467,000 of increased commissions due to higher sales. These increases were partially offset by our cost-cutting measures, which included (i) $375,000 of
 decreased marketing and advertising expenses and (ii) $218,000 of decreased trade show expense.

 Research and Development. Our research and development expenses for fiscal 2024 were $9,995,000, which represents a decrease of $327,000, or 3.2%, from fiscal 2023 of $10,322,000. This decrease was
 primarily due to a headcount reduction and a reduction in research and development expenses. These decreases were partially offset by the $725,000 employee retention credit recorded in the prior year.

 Foreign Exchange Impact of Lease Liabilities and Forward Contracts. Our foreign exchange impact of lease liabilities and forward contracts for fiscal 2024 and 2023 were non-cash gains of $3,814,000
 and $9,291,000, respectively. This change during fiscal 2024 compared with fiscal 2023 was primarily due to (i) the remeasurement of our foreign currency-denominated lease liabilities, which resulted in non-cash gains of $5,187,000 and
 $6,515,000, respectively, due to foreign currency exchange rate fluctuations and (ii) the forward foreign currency exchange contracts, which resulted in a non-cash loss of $1,373,000 compared with a non-cash gain of $2,776,000, respectively,
 due to the changes in their fair values.

 Operating Income

 Consolidated Operating Income. Our consolidated operating income for fiscal 2024 was $46,120,000, which represents an increase of $9,674,000, or 26.5%, from fiscal 2023 of $36,446,000. Operating
 income increased primarily due to higher gross profit, which was partially offset by higher operating expenses as discussed above.

 Interest Expense

 Interest Expense, net. Our interest expense for fiscal 2024 was $60,040,000, which represents an increase of $20,485,000, or 51.8%, from interest expense for fiscal 2023 of
 $39,555,000. This increase was primarily due to (i) higher interest rates and increased collection of receivables utilizing accounts receivable discount programs on higher sales, (ii) higher interest rates offset by lower average outstanding
 balances under our credit facility, and (iii) non-cash interest expense incurred on the convertible notes issued on March 31, 2023.

 Change in Fair Value of Compound Net Derivative Liability

 Change in Fair Value of Compound Net Derivative Liability. Our change in fair value of compound net derivative liability for fiscal 2024 was a non-cash gain of $1,020,000
 associated with the convertible notes issued on March 31, 2023.

 Loss on Extinguishment of Debt

 Loss on Extinguishment of Debt. Our loss on extinguishment of debt was $168,000 in connection with the repayment of the remaining outstanding balance of our term loans during
 fiscal 2024.

 Provision for Income Taxes

 Income Tax. We recorded an income tax expense of $36,176,000, or an effective tax rate of (276.8)%, and $1,098,000, or an effective tax rate of (35.3)%, for fiscal 2024 and
 2023, respectively. During fiscal 2024, we recorded a discrete non-cash valuation allowance of $38,009,000 on our U.S. federal and various state deferred tax assets primarily due to recent losses. The effective tax rate for fiscal 2024, was
 primarily impacted by (i) the valuation allowance on U.S. and Canadian deferred tax assets that we do not expect to be realized, (ii) excess tax benefit from stock-based compensation, (iii) non-deductible executive compensation under Internal
 Revenue Code Section 162(m), and (iv) foreign income taxed at rates that are different from the federal statutory rate.

 Fiscal 2023 Compared with Fiscal 2022

 A discussion of the changes in our results of operations for the year ended March 31, 2023, as compared with the year ended March 31, 2022, has been omitted from this Form 10-K but may be found in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations " of the annual report on Form 10-K for the year ended March 31, 2023, filed with the SEC on June 14, 2023, which is available free of charge on the SEC's website at www.sec.gov by searching with our ticker symbol
 "MPAA" or at our internet address, www.motorcarparts.com, by clicking "Investors" located at the top of the page.

 Liquidity and Capital Resources

 Overview

 We had working capital (current assets minus current liabilities) of $156,034,000 and $154,886,000, a ratio of current assets to current liabilities of 1.4:1.0 at March 31, 2024 and 2023, respectively.

 Our primary source of liquidity was from cash generated from operations during fiscal 2024. We believe cash generated from operations, our cash and cash equivalents, use of accounts receivable discount programs, amounts available under our
 credit facility, and other sources are sufficient to satisfy our working capital needs, and lease and capital expenditure obligations over the next 12 months.

 Cash Flows

 The following summarizes cash flows as reflected in the consolidated statements of cash flows:

 2024

 2023

 2022

 Cash provided by (used in):

 Operating activities

 $

 39,172,000

 $

 (21,754,000

)

 $

 (44,862,000

)

 Investing activities

 (479,000

)

 (4,191,000

)

 (7,938,000

)

 Financing activities

 (36,439,000

)

 14,308,000

 60,215,000

 Effect of exchange rates on cash and cash equivalents

 124,000

 217,000

 78,000

 Net increase (decrease) in cash and cash equivalents

 $

 2,378,000

 $

 (11,420,000

)

 $

 7,493,000

 Additional selected cash flow data:

 $

 11,619,000

 $

 12,444,000

 $

 12,886,000

 Capital expenditures

 1,000,000

 4,201,000

 7,550,000

 Fiscal 2024 Compared with Fiscal 2023

 Net cash provided by operating activities was $39,172,000 for fiscal 2024 compared with net cash used in operations of $21,754,000 for fiscal 2023. The significant changes in our operating activities reflect (i) increased collections of our
 accounts receivable balances resulting from higher sales during the current year, (ii) the timing of supplier payments compared with the prior year, and (iii) continued investments in inventory to support anticipated future demand for our
 products compared with inventory reduction initiatives in the prior year. We continue to manage our working capital to maximize our operating cash flow.

 Net cash used in investing activities was $479,000 and $4,191,000 for fiscal 2024 and 2023, respectively. The change in our investing activities primarily resulted from decreased capital expenditures.

 Net cash used in financing activities was $36,439,000 for fiscal 2024 compared with net cash provided by financing activities of $14,308,000 for fiscal 2023. The change in our financing activities primarily resulted from (i) the net
 repayment of amounts outstanding under our credit facility of $30,325,000 during fiscal 2024 compared with $13,550,000 during fiscal 2023 and (ii) the payment of debt issuance costs incurred in connection with the amendments to our credit
 facility and convertible notes during fiscal 2024. During fiscal 2023 we generated proceeds, less debt issuance costs, from the issuance of $32,000,000 in convertible notes issued on March 31, 2023.

 Fiscal 2023 Compared with Fiscal 2022

 A discussion of the changes in our operating activities, investing activities, and financing activities for the year ended March 31, 2023, as compared with the year ended March 31, 2022, has been omitted
 from this Form 10-K but may be found in Item 7. "Management's Discussion and Analysis of Financial Condition
 and Results of Operations " of the annual report on Form 10-K for the year ended March 31, 2023, filed with the SEC on June 14, 2023, which is available free of charge on the SEC's website at www.sec.gov
 by searching with our ticker symbol "MPAA" or at our internet address, www.motorcarparts.com, by clicking "Investors" located at the top of the page.

 Capital Resources

 Credit Facility

 We are party to a $268,620,000 senior secured financing, (as amended from time to time, the "Credit Facility") with a syndicate of lenders, and PNC Bank, National Association, as administrative agent, consisting of (i) a $238,620,000
 revolving loan facility, subject to borrowing base restrictions, a $24,000,000 sublimit for borrowings by Canadian borrowers, and a $20,000,000 sublimit for letters of credit (the "Revolving Facility") and (ii) a $30,000,000 term loan facility
 (the "Term Loans"). Prior to the eighth amendment discussed below, the loans under the Credit Facility were scheduled to mature on May 28, 2026. In connection with the Credit Facility, the lenders have a security interest in substantially all
 of our assets.

 On August 3, 2023, we entered into a seventh amendment to the Credit Facility, which among other things, (i) permitted us to repay our outstanding balance of Term Loans, (ii) permitted the exclusion of quarterly
 principal payments of Term Loans from the fixed charge coverage ratio (including retrospectively for the prior periods) for all quarters beginning June 30, 2023, (iii) reset the fixed charge coverage ratio financial covenant level for the
 quarters ending September 30, 2023 and December 31, 2023, (iv) eliminated the senior leverage ratio financial covenant effective with the quarter ended June 30, 2023, (v) extended the minimum undrawn availability financial covenant through the
 delivery of the June 30, 2024 compliance certificate, and (vi) excluded the amount of all amendment fees and expenses incurred in connection with this amendment as well as prior unamortized fees associated with the Term Loans from bank EBITDA
 and the fixed charge coverage ratio financial covenant.

 On August 3, 2023, we repaid the remaining outstanding balance of our Term Loans and recorded a loss on extinguishment of debt for the remaining unamortized debt issuance costs of $168,000 in the consolidated statement of operations.

 On December 12, 2023, we entered into an eighth amendment to the Credit Facility, which among other things, (i) extended the maturity date to December 12, 2028 from May

 28, 2026, (ii) amended the definition of "Applicable Margin" to provide for a pricing grid, with the Applicable Margin for Term SOFR loans ranging from 2.75% to 3.25% and the Applicable Margin for base rate loans
 ranging from 1.75% to 2.25%, in each case based on average daily undrawn availability for the most recently completed calendar quarter, (iii) amended the existing fixed charge coverage ratio financial covenant that is only tested if undrawn
 availability (which may include up to $8,000,000 of suppressed availability) is less than 22.5% of the aggregate revolving commitments, and (iv) amended the definitions of Consolidated EBITDA and fixed charge coverage ratio and certain
 component definitions used therein.

 We had $128,000,000 and $145,200,000 outstanding under the Revolving Facility at March 31, 2024 and 2023, respectively. In addition, $6,370,000 was outstanding for letters of credit at March 31, 2024. At
 March 31, 2024, after certain contractual adjustments, $100,915,000 was available under the Revolving Facility. The interest rate on our Revolving Facility was 8.43% and 8.13% respectively, at March 31, 2024 and 2023, respectively.

 The Credit Facility, as amended, requires us to maintain a minimum fixed charge coverage ratio if undrawn availability is less than 22.5% of the aggregate revolving commitments and a specified minimum undrawn
 availability. During the period ended March 31, 2024, undrawn availability was greater than the 22.5% threshold, therefore, the fixed charge coverage ratio financial covenant was not required to be tested.

 Convertible Notes

 On March 31, 2023, we entered into a note purchase agreement, as amended, (the "Note Purchase Agreement") with Bison Capital Partners VI, L.P. and Bison Capital Partners VI-A, L.P. (collectively, the
 "Purchasers") and Bison Capital Partners VI, L.P., as the purchaser representative (the "Purchaser Representative") for the issuance and sale of $32,000,000 in aggregate principal amount of convertible notes due in 2029 (the "Convertible
 Notes"), which was used for general corporate purposes. The Convertible Notes bear interest at a rate of 10.0% per annum, compounded annually, and payable (i) in kind or (ii) in cash, annually in arrears on April 1 of each year, commencing on
 April 1, 2024. On June 8, 2023, we entered into the first amendment to the Note Purchase Agreement, which among other things, removed a provision that specified the Purchasers would be entitled to receive a dividend or distribution payable in
 certain circumstances. This amendment was effective as of March 31, 2023. On August 1, 2023, we entered into the second amendment to the Note Purchase Agreement, which amended the definition of "Permitted Restricted Payments" to permit the
 prepayment of our Term Loans.

 The aggregate proceeds from the offering were approximately $31,280,000, net of initial purchasers' fees and other related expenses. The initial conversion rate is 66.6667 shares of our common stock per $1,000
 principal amount of notes (equivalent to an initial conversion price of approximately $15.00 per share of common stock). At March 31, 2024, we had 28,214,757 shares of our common stock available to be issued if the Convertible Notes were
 converted.

 In connection with the Note Purchase Agreement, we entered into common stock warrants (the "Warrants") with the Purchasers, which mature on March 30, 2029. The Warrants do not become exercisable unless a Company
 Redemption (as defined below) occurs and the volume weighted average price of our common stock for 20 consecutive days prior to the redemption is less than $15.00. The fair value of the Warrants, using Level 3 inputs and the Monte Carlo
 simulation model, was zero at March 31, 2024 and 2023. We estimate the fair value of the Warrants at each balance sheet date. Any subsequent changes from the initial recognition in the fair value of the Warrants will be recorded in current
 period earnings in the consolidated statements of operations.

 The Convertible Notes may be converted, subject to certain conditions, at a conversion price of approximately $15.00 (the "Conversion Option"). The Convertible Notes also include a provision for a return of
 interest ("Return of Interest"), which requires the Purchasers to return 15.0% of the interest paid to us in certain circumstances. The Return of Interest provision is accounted for as part of the Conversion Option and if the Conversion Option
 is exercised in the future, the Return of Interest provision will remain outstanding until the Purchaser sells all of the underlying stock received upon conversion. Upon conversion, any value associated with the Return of Interest provision
 will be reflected as a derivative asset upon conversion, with changes in fair value being recorded in earnings in the consolidated statements of operations until settlement in connection with the sale of the underlying stock by the Purchaser.
 Unless and until we deliver a redemption notice, the Purchasers of the Convertible Notes may convert their Convertible Notes at any time at their option. Upon conversion, the Convertible Notes will be settled in shares of our common stock. The
 conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. The Convertible Notes have a stated maturity of March 30, 2029, subject to earlier conversion or redemption in accordance with
 their terms.

 If there is a Fundamental Transaction, as defined in the Form of Convertible Promissory Note, we may redeem all or part of the Convertible Notes. Except in the case of the occurrence of a Fundamental Transaction,
 we may not redeem the Convertible Notes prior to March 31, 2026. After March 31, 2026, we may redeem all or part of the Convertible Notes for a cash purchase (the "Company Redemption") price equal to the redemption price plus $5,000,000, but
 only if (i) we are listed on a national exchange, (ii) there is no "Event of Default" occurring and continuing and (iii) Adjusted EBITDA for the prior four quarters is greater than $80,000,000. The "Redemption Price" shall mean a cash amount
 equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest. However, if the volume weighted average price of our common stock for 20 consecutive days prior to the notice of the Company Redemption is
 less than $15, the Purchasers may exercise the warrants and we will pay the Redemption Price plus $2,000,000.

 The Conversion Option and the Company Redemption both met the criteria for bifurcation from the Convertible Notes as derivatives and have been combined as a compound net derivative liability (the "Compound Net
 Derivative Liability"). The Compound Net Derivative Liability has been recorded within convertible note, related party in the consolidated balance sheets. The fair value of the Conversion Option and the Company Redemption option using Level 3
 inputs and the Monte Carlo simulation model was a liability of $9,800,000 and $10,400,000, and an asset of $2,390,000 and $1,970,000 at March 31, 2024 and 2023, respectively. We estimate the fair value of the Compound Net Derivative Liability
 at each balance sheet date. Any subsequent changes from the initial recognition in the fair value of the Compound Net Derivative Liability will be recorded in current period earnings in the consolidated statements of operations. During the year
 ended March 31, 2024, we recorded a gain of $1,020,000 as the change in fair value of the Compound Net Derivative Liability in the consolidated statement of operations and consolidated statement of cash flows.

 The Convertible Notes also contain additional features, such as, default interest and options related to a Fundamental Transaction, requiring bifurcation which were not separately accounted for as the value of
 such features were not material at March 31, 2024 and 2023. Any subsequent changes from the initial recognition in the fair value of those features will be recorded in current period earnings in the consolidated statements of operations.

 The Convertible Notes include customary provisions relating to the occurrence of Events of Default, which include the following: (i) certain payment defaults on the Convertible Notes (ii) certain events of
 bankruptcy, insolvency and reorganization involving us or any of our subsidiaries; (iii) the entering of one or more final judgments or orders against us or any of our subsidiaries for an aggregate payment exceeding $25,000,000; (iv) the
 acceleration of senior debt; (v) certain failures of us to comply with certain provisions of the Note Purchase Agreement or material breaches of the Note Purchase Agreement by us or any of our subsidiaries; (vi) any material provision of the
 Note Purchase Agreement, the Convertible Notes, the guarantee, the subordination agreement, the warrants or the registration rights agreement, for any reason, ceases to be valid and binding on us or any subsidiary, or any subsidiary shall so
 claim in writing to challenge the validity of or our liability under the Note Purchase Agreement, the Convertible Notes, or the registration rights agreement; or (vii) we fail to maintain the listing of our capital stock on a national
 securities exchange. Events of Default will be subject to a 30-day cure period except for those related to clause (ii) and (iv) of the preceding sentence.

 If an Event of Default occurs and is continuing, then, we shall deliver written notice to the Purchasers within 5 business days of first learning of such Event of Default. If an Event of Default involving
 bankruptcy, insolvency or reorganization events with respect to us (and not solely with respect to our significant subsidiary) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then
 outstanding will immediately become due and payable without any further action.

 Unamortized debt issuance costs of $1,058,000 and $1,006,000 are presented in the balance sheet as a direct deduction from the carrying amounts of the Convertible Notes at March 31, 2024 and 2023, respectively.
 Debt issuance costs are amortized using the effective interest method through the maturity of the Convertible Notes and recorded in interest expense in the consolidated statements of operations. The effective interest rate was 18.3% as of March
 31, 2024. Debt issuance costs of $360,000 allocated to the Compound Net Derivative Liability were immediately expensed to interest expense in the consolidated statements of operations for the year ended March 31, 2023.

 Additionally, pursuant to the Note Purchase Agreement, subject to certain conditions, the Purchaser Representative shall have the right to nominate one director to serve (the "Investor Director") on our Board of
 Directors (the "Board"). If an Investor Director is not currently serving on the Board, and subject to certain other conditions set forth in the Note Purchase Agreement, the Purchaser Representative shall have the right to designate one person
 to have observation rights with respect to all meetings of the Board. In connection with our entry into the Note Purchase Agreement, we appointed Douglas Trussler to serve on our Board.

 Accounts Receivable Discount Programs

 We use accounts receivable discount programs offered by certain customers and their respective banks. Under these programs, we have options to sell those customers' receivables to those banks at a discount to be agreed upon at the time the
 receivables are sold. These accounts receivable discount programs allow us to accelerate receipt of payment on customers' receivables. While these arrangements have reduced our working capital needs, there can be no assurance that these
 accounts receivable discount programs will continue in the future. Interest expense resulting from these accounts receivable discount programs would increase if interest rates rise, if utilization of these accounts receivable discount programs
 expand, if customers extend their payment to us, or if the discount period is extended to reflect more favorable payment terms to customers.

 The following is a summary of the accounts receivable discount programs:

 2024

 2023

 Receivables discounted

 $

 618,012,000

 $

 548,376,000

 Weighted average days

 Weighted average discount rate

 6.8

 %

 5.3

 %

 Amount of discount as interest expense

 $

 39,175,000

 $

 26,432,000

 Multi-year Customer Agreements

 We have or are renegotiating long-term agreements with many of our major customers. Under these agreements, which in most cases have initial terms of at least four years, we are designated as the exclusive or primary supplier for specified
 categories of our products. Because of the very competitive nature of the market and the limited number of customers for these products, our customers have sought and obtained price concessions, significant marketing allowances and more
 favorable delivery and payment terms in consideration for our designation as a customer's exclusive or primary supplier. These incentives differ from contract to contract and can include (i) the issuance of a specified amount of credits against
 receivables in accordance with a schedule set forth in the relevant contract, (ii) support for a particular customer's research or marketing efforts provided on a scheduled basis, (iii) discounts granted in connection with each individual
 shipment of product, and (iv) other marketing, research, store expansion or product development support. These contracts typically require that we meet ongoing performance standards.

 While these longer-term agreements strengthen our customer relationships, the increased demand for our products often requires that we increase our inventories and personnel. Customer demands that we purchase their Remanufactured Core
 inventory also require the use of our working capital. The marketing and other allowances we typically grant our customers in connection with our new or expanded customer relationships adversely impact the near-term revenues, profitability and
 associated cash flows from these arrangements. However, we believe the investment we make in these new or expanded customer relationships will improve our overall liquidity and cash flow from operations over time.

 Share Repurchase Program

 In August 2018, our board of directors approved an increase in our share repurchase program from $20,000,000 to $37,000,000 of our common stock. During fiscal 2024 and 2023, we did not repurchase any shares of our common stock. During
 fiscal 2022, we repurchased 106,486 shares of our common stock for $1,914,000. As of March 31, 2024, $18,745,000 was utilized and $18,255,000 remains available to repurchase shares under the authorized share repurchase program, subject to the
 limit in our Credit Facility. We retired the 837,007 shares repurchased under this program through March 31, 2024. Our share repurchase program does not obligate us to acquire any specific number of shares and shares may be repurchased in
 privately negotiated and/or open market transactions.

 Capital Expenditures and Commitments

 Our total capital expenditures were $1,755,000 for fiscal 2024 and $4,792,000 for fiscal 2023. These capital expenditures include (i) cash paid for the purchase of plant and equipment plant, (ii) equipment acquired under finance leases, and
 (iii) non-cash capital expenditures. Capital expenditures for fiscal 2024 primarily include the purchase of equipment for our current operations. We expect to incur approximately $7,000,000 of capital expenditures primarily to support our
 global growth initiatives and current operations during fiscal 2025. We have used and expect to continue using our working capital and additional capital lease obligations to finance these capital expenditures.

 Contractual Obligations

 The following summarizes our contractual obligations and other commitments as of March 31, 2024 and the effect such obligations could have on our cash flows in future periods:

 Payments Due by Period

 Contractual Obligations

 Total

 Less than

 1 year

 1 to 3

 years

 3 to 5

 years

 More than 5

 years

 Finance lease obligations (1)

 $

 3,825,000

 $

 1,753,000

 $

 1,539,000

 $

 533,000

 $

 -

 Operating lease obligations (2)

 101,759,000

 12,676,000

 23,568,000

 22,054,000

 43,461,000

 Revolving facility (3)

 128,000,000

 -

 -

 128,000,000

 -

 Convertible notes (4)

 56,704,000

 -

 -

 56,704,000

 -

 Accrued core payment (5)

 10,650,000

 3,792,000

 5,737,000

 1,121,000

 -

 Core bank liability (6)

 14,130,000

 2,018,000

 4,036,000

 4,036,000

 4,040,000

 Finished goods liabilities (7)

 549,000

 404,000

 145,000

 -

 -

 Unrecognized tax benefits (8)

 -

 -

 -

 -

 -

 Other long-term obligations (9)

 54,095,000

 14,701,000

 21,479,000

 15,089,000

 2,826,000

 Total

 $

 369,712,000

 $

 35,344,000

 $

 56,504,000

 $

 227,537,000

 $

 50,327,000

 (1)

 Finance lease obligations represent amounts due under finance leases for various types of equipment.

 (2)

 Operating lease obligations represent amounts due for rent under our leases for all our facilities, certain equipment, and our Company automobile.

 (3)

 Obligations under our Revolving Facility mature on December 12, 2028. This debt is classified as a short term liability on our balance sheet as we expect to use our working capital to repay the amounts outstanding under our revolving
 loan.

 (4)

 Obligations under our Convertible Notes mature on March 30, 2029. There are no future payments required under the Convertible Notes prior to their maturity, therefore, the carrying value of the notes plus interest payable in kind,
 assuming no early redemption or conversion has occurred, is included in the above table based on their maturity date of March 30, 2029.

 (5)

 Accrued core payment represents the amounts due for principal of $10,011,000 and interest payments of $639,000 to be made in connection with the purchases of Remanufactured Cores from our customers, which are held by these customers
 and remain on their premises.

 (6)

 The core bank liability represents the amounts due for principal of $13,582,000 and interest payments of $548,000 to be made in connection with the return of Used Cores from our customers.

 (7)

 Finished goods liabilities represents the amounts due for principal of $549,000 and no interest payments to be made in connection with the purchase of finished goods from our customers.

 (8)

 We are unable to reliably estimate the timing of future payments related to uncertain tax position liabilities at March 31, 2024; therefore, future tax payment accruals related to uncertain tax positions in the amount of $1,784,000
 have been excluded from the table above.

 (9) Other long-term obligations represent commitments we have with certain customers to provide marketing allowances in consideration for multi-year customer agreements to provide products
 over a defined period. We are not obligated to provide these marketing allowances should our business relationships end with these customers.

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Our primary market risk relates to changes in interest rates, foreign currency exchange rates, and customer credit. We do not enter into derivatives or other financial instruments for trading or speculative purposes. As our overseas
 operations expand, our exposure to the risks associated with foreign currency fluctuations will continue to increase.

 Interest rate risk

 We are exposed to changes in interest rates primarily as a result of our borrowing and receivable discount programs, which have interest costs that vary with interest rate movements. Our revolving facility bears interest at variable base
 rates, plus an applicable margin, which was 8.43% and 8.12% at March 31, 2024 and 2023, respectively. At March 31, 2024, borrowings under our revolving facility totaled $128,000,000. If interest rates were to increase 1%, our net annual
 interest expense on our revolving facility would have increased by approximately $1,280,000. In addition, during the years ended March 31, 2024 and 2023, collections under our accounts receivable discount program were $618,012,000 and
 $548,376,000, respectively. The weighted average discount rate was 6.8% and 5.3% during fiscal 2024 and 2023, respectively. If discount rates were to increase 1%, our net annual interest expense on our accounts receivable discount programs
 would have increased by approximately $6,180,000.

 Foreign currency risk

 We are exposed to foreign currency exchange risk inherent in our anticipated purchases and expenses denominated in currencies other than the U.S. dollar. We transact business in the following foreign currencies; Mexican pesos, Malaysian
 ringgit, Singapore dollar, Chinese yuan, and the Canadian dollar. Our primary currency risks result from fluctuations in the value of the Mexican peso and to a lesser extent the Chinese yuan. To mitigate these risks, we enter into forward
 foreign currency exchange contracts to exchange U.S. dollars for these foreign currencies. The extent to which we use forward foreign currency exchange contracts is periodically reviewed in light of our estimate of market conditions and the
 terms and length of anticipated requirements. The use of derivative financial instruments allows us to reduce our exposure to the risk that the eventual net cash outflow resulting from funding the expenses of the foreign operations will be
 materially affected by changes in exchange rates. These contracts generally expire in a year or less. Any changes in the fair values of our forward foreign currency exchange contracts are reflected in current period earnings. Based upon our
 forward foreign currency exchange contracts related to these currencies, an increase of 10% in exchange rates at March 31, 2024 would have increased our operating expenses by approximately $5,146,000. During fiscal 2024 and fiscal 2023, a loss
 of $1,373,000 and a gain of $2,776,000, respectively, was recorded due to the change in the value of the forward foreign currency exchange contracts subsequent to entering into the contracts. In addition, we recorded gains $5,187,000 and
 $6,515,000 in connection with the remeasurement of foreign currency-denominated lease liabilities during fiscal 2024 and fiscal 2023, respectively.

 Credit Risk

 We regularly review our accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality and age of the accounts receivable, and the current economic conditions that may affect a
 customer's ability to pay such amounts owed to us. The majority of our sales are to leading automotive aftermarket parts suppliers. We participate in trade accounts receivable discount programs with our major customers. If the creditworthiness
 of any of our customers was downgraded, we could be adversely affected, in that we may be subjected to higher interest rates on the use of these discount programs or we could be forced to wait longer for payment. Should our customers experience
 significant cash flow problems, our financial position and results of operations could be materially and adversely affected, and the maximum amount of loss that would be incurred would be the outstanding receivable balance, Used Cores expected
 to be returned by customers, and the value of the Remanufactured Cores held at customers' locations. We maintain an allowance for credit losses that, in our opinion, provides for an adequate reserve to cover losses that may be incurred.

 Item 8.

 Financial Statements and Supplementary Data

 The information required by this item is set forth in the consolidated financial statements, commencing on page F-1 included herein.

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 Item 9A.

 Controls and Procedures

 Evaluation of Disclosure Controls and Procedures

 Management, with the participation of our Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and Chief Accounting Officer ("CAO"), has evaluated the effectiveness of our
 disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the "Exchange Act,") as of the end of the period covered by this Annual Report on Form 10-K.

 Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and
 communicated to our management, including our CEO, CFO and CAO, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules
 and forms. Based on this evaluation, our CEO, CFO and CAO have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2024.

 Management's Annual Report on Internal Control over Financial Reporting

 Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d- 15(f) under the Exchange Act. Our internal control over
 financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting
 principles.

 Management assessed the effectiveness of our internal control over financial reporting as of March 31, 2024 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in
 Internal Control—Integrated Framework (2013). Based on its assessment, our management, including our CEO and CFO, has concluded that our internal control over financial reporting was effective as of March 31, 2024.

 The effectiveness of our internal control over financial reporting as of March 31, 2024 has been audited by the Company's independent registered public accounting firm, Ernst & Young LLP. Their assessment is
 included in the accompanying Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting.

 Change in Internal Control Over Financial Reporting

 There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control
 performed during the period covered by this report, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 Inherent Limitations on Effectiveness of Controls

 Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design
 of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can
 provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur
 because of a simple error or mistake.

 Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based
 in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate
 because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be
 detected.

 Item 9B.

 Other Information

 Trading Arrangements

 During the quarter ended March 31, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as each such term is defined in Item 408 of Regulation
 S-K.

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 None.

 Item 10.

 Directors, Executive Officers and Corporate Governance

 The information required by this item is incorporated by reference to our Definitive Proxy Statement in connection with our next Annual Meeting of Stockholders (the "Proxy Statement").

 Item 11.

 Executive Compensation

 The information required by this item is incorporated by reference to the Proxy Statement.

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The information required by this item is incorporated by reference to the Proxy Statement.

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 The information required by this item is incorporated by reference to the Proxy Statement.

 Item 14.

 Principal Accountant Fees and Services

 The information required by this item is incorporated by reference to the Proxy Statement.

 Item15.

 Exhibits, Financial Statement Schedule

 a.

 Documents filed as part of this report:

 (1)

 Index to Consolidated Financial Statements:

 Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 42)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Comprehensive (Loss) Income

 Consolidated Statements of Shareholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 (2) Schedule.

 Schedule II — Valuation and Qualifying Accounts

 S-1

 (3)

 Exhibits:

 3.1

 Certificate of Incorporation of the Company

 Incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form SB-2 declared effective on March 22, 1994 (the "1994 Registration Statement").

 3.2

 Amendment to Certificate of Incorporation of the Company

 Incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-1 (No. 33-97498) declared effective on November 14, 1995 (the "1995 Registration Statement").

 3.3

 Amendment to Certificate of Incorporation of the Company

 Incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1997.

 3.4

 Amendment to Certificate of Incorporation of the Company

 Incorporated by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998 (the "1998 Form 10-K").

 3.5

 Amendment to Certificate of Incorporation of the Company

 Incorporated by reference to Exhibit C to the Company's proxy statement on Schedule 14A filed with the SEC on November 25, 2003.

 3.6

 Amended and Restated By-Laws of the Company

 Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on August 24, 2010.

 3.7

 Certificate of Amendment of the Certificate of Incorporation of the Company

 Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on April 17, 2014.

 3.8

 Amendment to the Amended and Restated By-Laws of the Company

 Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on June 14, 2016.

 3.9

 Amendment to the Amended and Restated By-Laws of the Company

 Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on February 22, 2017.

 3.10

 Third Amendment to the Amended and Restated By-Laws of the Company

 Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on February 1, 2022.

 4.1

 Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

 Incorporated by reference to Exhibit 4.1 to Quarterly Report on Form 10-Q filed on August 9, 2022.

 4.2

 2004 Non-Employee Director Stock Option Plan

 Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A for the 2004 Annual Shareholders Meeting.

 4.3

 2010 Incentive Award Plan

 Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on December 15, 2010.

 4.4

 Amended and Restated 2010 Incentive Award Plan

 Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on March 5, 2013.

 4.5

 Second Amended and Restated 2010 Incentive Award Plan

 Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on March 3, 2014.

 4.6

 2014 Non-Employee Director Incentive Award Plan

 Incorporated by reference to Appendix B to the Proxy Statement on Schedule 14A filed on March 3, 2014.

 4.7

 Third Amended and Restated 2010 Incentive Award Plan

 Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on November 20, 2017.

 4.8

 Fourth Amended and Restated 2010 Incentive Award Plan

 Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on July 24, 2020.

 4.9

 2022 Incentive Award Plan

 Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on July 29, 2022.

 4.10

 Form of Convertible Promissory Note

 Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on March 31, 2023.

 4.11

 Form of Common Stock Warrant

 Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on March 31, 2023.

 4.12

 First Amended and Restated Convertible Promissory Note

 Incorporated by reference to Exhibit 4.12 to the Annual Report on Form 10-K filed on June 14, 2023.

 4.13

 First Amended and Restated Common Stock Warrant

 Incorporated by reference to Exhibit 4.13 to the Annual Report on Form 10-K filed on June 14, 2023.

 10.1

 Form of Indemnification Agreement for officers and directors

 Incorporated by reference to Exhibit 10.25 to the 1997 Registration Statement.

 10.2

 Amended and Restated Employment Agreement, dated as of December 31, 2008, by and between the Company and Selwyn Joffe

 Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed January 7, 2009.

 10.3

 Employment Agreement, dated as of May 18, 2012, between Motorcar Parts of America, Inc., and Selwyn Joffe

 Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on May 24, 2012.

 10.4

 Form of Stock Option Notice for use in connection with stock options granted to Selwyn Joffe pursuant to the Motorcar Parts of America, Inc. 2010 Incentive Award Plan

 Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 12, 2013.

 10.5

 Form of Stock Option Agreement for use in connection with stock options granted to Selwyn Joffe pursuant to the Motorcar Parts of America, Inc. 2010 Incentive Award Plan

 Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on August 12, 2013.

 10.6*

 Revolving Credit, Term Loan and Security Agreement, dated as of June 3, 2015, among Motorcar Parts of America, Inc., each lender from time to time party thereto, and PNC Bank, National Association, as
 administrative agent

 Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 8, 2015.

 10.7

 First Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of November 5, 2015, among Motorcar Parts of America, Inc., each lender from time to time party thereto, and PNC Bank,
 National Association, as administrative agent

 Incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed on November 9, 2015.

 10.8

 Consent and Second Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of May 19, 2016, among Motorcar Parts of America, Inc., each lender from time to time party thereto, and PNC
 Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on August 9, 2016.

 10.9

 Third Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of March 24, 2017, among Motorcar Parts of America, Inc., each lender from time to time party thereto, and PNC Bank,
 National Association, as administrative agent

 Incorporated by reference to Exhibit 10.38 to Annual Report on Form 10-K filed on June 14, 2017.

 10.10

 Fourth Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of April 24, 2017, among Motorcar Parts of America, Inc., each lender from time to time party thereto and PNC Bank,
 National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 27, 2017.

 10.11

 Fifth Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of July 18, 2017, among Motorcar Parts of America, Inc., each lender from time to time party thereto and PNC Bank,
 National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on July 24, 2017.

 10.12*

 Amended and Restated Credit Facility, dated as of June 5, 2018, among Motorcar Parts of America, Inc., each lender from time to time party thereto and PNC Bank, National Association, as administrative
 agent

 Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on August 9, 2018.

 10.13

 First Amendment to Amended and Restated Loan Agreement, dated as of November 14, 2018, among Motorcar Parts of America, Inc., D & V Electronics Ltd., each lender from time to time party thereto, and
 PNC Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 20, 2018.

 10.14

 Amendment No. 2 to Employment Agreement, dated as of February 5, 2019, between Motorcar Parts of America, Inc., and Selwyn Joffe

 Incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed on February 11, 2019.

 10.15

 Second Amendment to Amended and Restated Loan Agreement, dated as of June 4, 2019, among Motorcar Parts of America, Inc., D&V Electronics Ltd., Dixie Electric Ltd., Dixie Electric Inc., each lender
 from time to time party thereto, and PNC Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 7, 2019.

 10.16

 Amendment No. 3 to Employment Agreement, dated as of March 30, 2020, between Motorcar Parts of America, Inc., and Selwyn Joffe

 Incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K filed on June 15, 2020.

 10.17

 Amendment No. 4 to Employment Agreement, dated as of May 21, 2020, between Motorcar Parts of America, Inc., and Selwyn Joffe

 Incorporated by reference to exhibit 10.1 to the Quarterly Report filed on August 10, 2020.

 10.18

 Third Amendment to Amended and Restated Loan Agreement, dated as of May 28, 2021, among Motorcar Parts of America, Inc., D&V Electronics Ltd., Dixie Electric Ltd., Dixie Electric Inc., each lender
 from time to time party thereto, and PNC Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 2, 2021.

 10.19

 Amendment No. 5 to Employment Agreement, dated as of June 18, 2021, between Motorcar Parts of America, Inc., and Selwyn Joffe

 Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on August 9, 2021.

 10.20

 Fourth Amendment to Amended and Restated Loan Agreement, dated as of November 3, 2022, among Motorcar Parts of America, Inc., D&V Electronics Ltd., Dixie Electric Ltd., Dixie Electric Inc., each lender from time to time party
 thereto, and PNC Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on November 9, 2022.

 10.21

 Fifth Amendment to Amended and Restated Loan Agreement, dated as of February 3, 2023, among Motorcar Parts of America, Inc., D&V Electronics Ltd., Dixie Electric Ltd., Dixie Electric Inc., each lender from time to time party
 thereto, and PNC Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed on February 9, 2023.

 10.22

 Note Purchase Agreement

 Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 31, 2023.

 10.23

 Registration Rights Agreement

 Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 31, 2023.

 10.24

 Sixth Amendment to Amended and Restated Loan Agreement, dated as of May 28, 2021, among Motorcar Parts of America, Inc., D & V Electronics Ltd., Dixie Electric Ltd., and Dixie Electric Inc., each lender from time to time party
 thereto, and PNC Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on March 31, 2023.

 10.25

 Amendment No. 6 to Employment Agreement, dated March 29, 2023, between Motorcar Parts of America, Inc. and Selwyn Joffe.

 Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on March 31, 2023.

 10.26

 First Amendment to Note Purchase Agreement

 Incorporated by reference to Exhibit 10.26 to the Annual Report on Form 10-K filed on June 14, 2023.

 10.27

 Seventh Amendment to Amended and Restated Loan Agreement, dated as of August 3, 2023, among Motorcar Parts of America, Inc., D & V Electronics Ltd., Dixie Electric Ltd., and Dixie Electric Inc., each lender from time to time
 party thereto, and PNC Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on August 9, 2023.

 10.28

 Second Amendment to the Note Purchase Agreement

 Incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed on August 9, 2023.

 10.29

 Eighth Amendment to Amended and Restated Loan Agreement, dated as of December 12, 2023, among Motorcar Parts of America, Inc., D & V Electronics Ltd., Dixie Electric Ltd., and Dixie Electric Inc., each lender from time to time
 party thereto, and PNC Bank, National Association, as administrative agent

 Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 13, 2023.

 21.1

 List of Subsidiaries

 23.1

 Consent of Independent Registered Public Accounting Firm Ernst & Young LLP

 31.1

 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002

 31.2

 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002

 31.3

 Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002

 32.1

 Certifications of Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002

 101.INS

 101.SCM

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 *

 Portions of this exhibit have been granted confidential treatment by the SEC.

 The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not
 rely on them for that purpose. In particular, any representations and warranties made by us in those agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the
 actual state of affairs as of the date they were made or at any other time.

 Item 16.

 Form 10-K Summary

 None.

 SIGNATURES

 Pursuant to the requirements of Section 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.

 MOTORCAR PARTS OF AMERICA, INC.

 Dated: June 11, 2024

 By:

 /s/ David Lee

 David Lee

 Chief Financial Officer

 Dated: June 11, 2024

 By:

 /s/ Kamlesh Shah

 Kamlesh Shah

 Chief Accounting Officer

 Pursuant to the requirements of the Securities Exchange Act of 1934, this Report on Form 10-K has been signed by the following persons on behalf of the Registrant in the capacities and on the dates indicated:

 /s/ Selwyn Joffe

 Chief Executive Officer and Director

 (Principal Executive Officer)

 Selwyn Joffe

 /s/ David Lee

 Chief Financial Officer

 (Principal Financial Officer)

 David Lee

 /s/ Kamlesh Shah

 Chief Accounting Officer

 (Principal Accounting Officer)

 Kamlesh Shah

 /s/ Rudolph Borneo

 Rudolph Borneo

 /s/ David Bryan

 David Bryan

 /s/ Joseph Ferguson

 Joseph Ferguson

 /s/ Philip Gay

 Philip Gay

 /s/ Jeffrey Mirvis

 Jeffrey Mirvis

 /s/ Jamy Rankin

 Jamy Rankin

 /s/ Douglas Trussler

 Douglas Trussler

 /s/ Patricia Warfield

 Patricia Warfield

 /s/ Barbara Whittaker

 Barbara Whittaker

 MOTORCAR PARTS OF AMERICA, INC.

 AND SUBSIDIARIES

 CONTENTS

 Page

 Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 42)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Comprehensive (Loss) Income

 Consolidated Statements of Shareholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 Schedule II — Valuation and Qualifying Accounts

 S-1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Shareholders and
 the Board of Directors of Motorcar Parts of America, Inc.

 Opinion on Internal
 Control Over Financial Reporting

 We have audited Motorcar
 Parts of America, Inc. and subsidiaries' internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
 Commission (2013 framework) (the COSO criteria). In our opinion, Motorcar Parts of America, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2024, based
 on the COSO criteria.

 We also have audited, in
 accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive
 (loss) income, shareholders' equity and cash flows for each of the three years in the period ended March 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15 and our report dated June 11, 2024 expressed
 an unqualified opinion thereon.

 Basis for Opinion

 The Company's management
 is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over
 Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
 respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit
 in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

 Our audit included
 obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
 performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

 Definition and Limitations
 of Internal Control Over Financial Reporting

 A company's internal
 control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
 accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
 dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts
 and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
 disposition of the company's assets that could have a material effect on the financial statements.

 Because of its inherent
 limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
 in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 /s/ Ernst & Young LLP

 Los Angeles, California

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Shareholders
 and the Board of Directors of Motorcar Parts of America, Inc.

 Opinion on the
 Financial Statements

 We have audited the
 accompanying consolidated balance sheets of Motorcar Parts of America, Inc. and subsidiaries (the Company) as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, shareholders' equity and
 cash flows for each of the three years in the period ended March 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the "consolidated financial statements"). In our
 opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the
 period ended March 31, 2024, in conformity with U.S. generally accepted accounting principles.

 We also have
 audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2024, based on criteria established in Internal
 Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated June 11, 2024 expressed an unqualified opinion thereon.

 Basis for Opinion

 These financial
 statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required
 to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our
 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or
 fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
 examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the
 overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit
 matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are
 material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of this critical audit matter does not alter in any way our opinion on the consolidated financial statements,
 taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 Marketing Allowances

 Description of the Matter

 As more fully
 described in Note 2 and Note 14 to the consolidated financial statements, revenue is recognized net of applicable marketing allowances. These marketing allowances vary by contract and can include (i) the issuance of specified credits
 against receivables, (ii) support for research or marketing efforts, (iii) discounts granted in connection with each individual shipment of product, and (iv) other marketing, research, store expansion or product development support. At
 March 31, 2024, marketing allowances recorded on the Company's consolidated balance sheet was $19,789,000, which is presented within contract liabilities.

 Auditing the
 completeness of marketing allowances was complex because marketing allowances vary by contract and can be impacted by unrecorded marketing allowances provided to customers.

 How We Addressed the

 Matter in Our Audit

 We obtained
 an understanding, evaluated the design and tested the operating effectiveness of controls over the marketing allowances processes. For example, we tested controls over management's review of contracts with customers containing
 marketing allowances, management's review of the completeness and accuracy of data used in the marketing accrual analysis at period end and management's review of credits issued to customers subsequent to the balance sheet date.

 Our audit
 procedures to test marketing allowances included, among others, reviewing significant contracts with customers, obtaining confirmations of contractual terms and conditions from a sample of the Company's customers, and testing credits
 issued or payments made to customers during the year and subsequent to year-end. We tested the completeness and accuracy of data used in the calculation of the marketing allowance by agreeing contractual terms to the underlying
 agreements. In addition, we evaluated the relationship between revenue and marketing allowances and assessed subsequent events to determine whether there was any new information that would require adjustments to the amounts recorded.

 /s/ Ernst & Young LLP

 We have served as the Company's auditor since 2007.

 Los Angeles, California

 Consolidated
 Balance Sheets

 ASSETS

 Current assets:

 Cash and cash equivalents

 $

 13,974,000

 $

 11,596,000

 Short-term investments

 Accounts receivable — net

 96,296,000

 119,868,000

 Inventory — net

 377,040,000

 339,675,000

 Inventory unreturned

 20,288,000

 16,579,000

 Contract assets

 27,139,000

 25,443,000

 Income tax receivable

 5,683,000

 2,156,000

 Prepaid expenses and other current assets

 18,202,000

 20,150,000

 Total current assets

 560,459,000

 537,478,000

 Plant and equipment — net

 38,338,000

 46,052,000

 Operating lease assets

 83,973,000

 87,619,000

 Deferred income taxes

 2,976,000

 32,625,000

 Long-term contract assets

 320,282,000

 318,381,000

 Goodwill

 3,205,000

 3,205,000

 Intangible assets — net

 1,069,000

 2,143,000

 Other assets

 1,700,000

 1,062,000

 TOTAL ASSETS

 $

 1,012,002,000

 $

 1,028,565,000

 LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:

 Accounts payable

 $

 154,977,000

 $

 119,437,000

 Accrued liabilities

 30,205,000

 22,329,000

 Customer finished goods returns accrual

 38,312,000

 37,984,000

 Contract liabilities

 37,591,000

 40,340,000

 Revolving loan

 128,000,000

 145,200,000

 Other current liabilities

 7,021,000

 4,871,000

 Operating lease liabilities

 8,319,000

 8,767,000

 Current portion of term loan

 -

 3,664,000

 Total current liabilities

 404,425,000

 382,592,000

 Term loan, less current portion

 -

 9,279,000

 Convertible notes, related party

 30,776,000

 30,994,000

 Contract liabilities, less current portion

 212,068,000

 193,606,000

 Deferred income taxes

 511,000

 718,000

 Operating lease liabilities, less current portion

 72,240,000

 79,318,000

 Other liabilities

 6,872,000

 11,583,000

 Total liabilities

 726,892,000

 708,090,000

 Commitments and contingencies

 Shareholders' equity:

 Preferred stock; par value $ 0.01 per share, 5,000,000 shares authorized; none issued

 -

 -

 Series A junior participating preferred stock; par value $ 0.01 per share, 20,000 shares authorized; none issued

 -

 -

 Common stock; par value $ 0.01 per share, 50,000,000 shares authorized; 19,662,380 and 19,494,615
 shares issued and outstanding at March 31, 2024 and 2023, respectively

 197,000

 195,000

 Additional paid-in capital

 236,255,000

 231,836,000

 Retained earnings

 39,503,000

 88,747,000

 Accumulated other comprehensive income (loss)

 9,155,000

 ( 303,000

)

 Total shareholders' equity

 285,110,000

 320,475,000

 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 $

 1,012,002,000

 $

 1,028,565,000

 The accompanying notes to consolidated financial statements are an integral part hereof.

 Consolidated
 Statements of
 Operations

 2024

 2023

 2022

 Net sales

 $

 717,684,000

 $

 683,074,000

 $

 650,308,000

 Cost of goods sold

 585,133,000

 569,112,000

 532,443,000

 Gross profit

 132,551,000

 113,962,000

 117,865,000

 Operating expenses:

 General and administrative

 57,769,000

 54,756,000

 57,499,000

 Sales and marketing

 22,481,000

 21,729,000

 22,833,000

 Research and development

 9,995,000

 10,322,000

 10,502,000

 Foreign exchange impact of lease liabilities and forward contracts

 ( 3,814,000

)

 ( 9,291,000

)

 ( 1,673,000

)

 Total operating expenses

 86,431,000

 77,516,000

 89,161,000

 Operating income

 46,120,000

 36,446,000

 28,704,000

 Other expenses:

 Interest expense, net

 60,040,000

 39,555,000

 15,555,000

 Change in fair value of compound net derivative liability

 ( 1,020,000

)

 -

 -

 Loss on extinguishment of debt

 168,000

 -

 -

 Total other expenses

 59,188,000

 39,555,000

 15,555,000

 (Loss) income before income tax expense

 ( 13,068,000

)

 ( 3,109,000

)

 13,149,000

 Income tax expense

 36,176,000

 1,098,000

 5,788,000

 Net (loss) income

 $

)

 $

)

 $

 Basic net (loss) income per share

 $

 ( 2.51

)

 $

 ( 0.22

)

 $

 0.38

 Diluted net (loss) income per share

 $

 ( 2.51

)

 $

 ( 0.22

)

 $

 0.38

 Weighted average number of shares outstanding:

 Basic

 19,601,204

 19,340,246

 19,119,727

 Diluted

 19,601,204

 19,340,246

 19,559,646

 The accompanying notes to consolidated financial statements are an integral part hereof.

 Consolidated Statements of
 Comprehensive (Loss) Income

 2024

 2023

 2022

 Net (loss) income

 $

)

 $

)

 $

 Other comprehensive income, net of tax:

 Foreign currency translation income

 9,458,000

 4,763,000

 2,630,000

 Total other comprehensive income, net of tax

 9,458,000

 4,763,000

 2,630,000

 Comprehensive (loss) income

 $

 ( 39,786,000

)

 $

 556,000

 $

 9,991,000

 The accompanying notes to consolidated financial statements are an integral part hereof.

 Consolidated
 Statements of
 Shareholders' Equity

 Common Stock

 Amount

 Additional Paid-in

 Capital Common

 Stock

 Retained Earnings

 Accumulated

 Other

 Comprehensive

 (Loss) Income

 Total

 Balance at March 31, 2021

 19,045,386

 $

 190,000

 $

 223,058,000

 $

 85,593,000

 $

 ( 7,696,000

)

 $

 301,145,000

 Compensation recognized under employee stock plans

 -

 -

 7,287,000

 -

 -

 7,287,000

 Exercise of stock options, net of shares withheld for employee taxes and net share settlement of
 exercise price

 33,996

 -

 499,000

 -

 -

 499,000

 Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes

 131,855

 2,000

 ( 1,747,000

)

 -

 -

 ( 1,745,000

)

 Repurchase and cancellation of treasury stock, including fees

 ( 106,486

)

 ( 1,000

)

 ( 1,913,000

)

 -

 -

 ( 1,914,000

)

 Foreign currency translation

 -

 -

 -

 -

 2,630,000

 2,630,000

 Net income

 -

 -

 -

 -

 Balance at March 31, 2022

 19,104,751

 $

 191,000

 $

 227,184,000

 $

 92,954,000

 $

 ( 5,066,000

)

 $

 315,263,000

 Compensation recognized under employee stock plans

 -

 -

 4,685,000

 -

 -

 4,685,000

 Exercise of stock options, net of shares withheld for employee taxes and net share settlement of
 exercise price

 236,199

 2,000

 938,000

 -

 -

 940,000

 Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes

 153,665

 2,000

 ( 971,000

)

 -

 -

 ( 969,000

)

 Foreign currency translation

 -

 -

 -

 -

 4,763,000

 4,763,000

 Net loss

 -

 -

 -

)

 -

)

 Balance at March 31, 2023

 19,494,615

 $

 195,000

 $

 231,836,000

 $

 88,747,000

 $

 ( 303,000

)

 $

 320,475,000

 Compensation recognized under employee stock plans

 -

 -

 4,700,000

 -

 -

 4,700,000

 Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes

 167,765

 2,000

 ( 281,000

)

 -

 -

 ( 279,000

)

 Foreign currency translation

 -

 -

 -

 -

 9,458,000

 9,458,000

 Net loss

 -

 -

 -

)

 -

)

 Balance at March 31, 2024

 19,662,380

 $

 197,000

 $

 236,255,000

 $

 39,503,000

 $

 9,155,000

 $

 285,110,000

 The accompanying notes to consolidated financial statements are an integral part hereof.

 Consolidated
 Statements of
 Cash Flows

 2024

 2023

 2022

 Cash flows from operating activities:

 Net (loss) income

 $

)

 $

)

 $

 Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

 10,544,000

 10,984,000

 11,338,000

 Amortization of intangible assets

 1,075,000

 1,460,000

 1,548,000

 Amortization of debt issuance costs

 2,165,000

 663,000

 623,000

 Amortization of interest on contract liabilities, net

 933,000

 940,000

 879,000

 Accrued interest on convertible notes, related party

 3,200,000

 9,000

 -

 Loss on extinguishment of debt

 168,000

 -

 -

 Amortization of core premiums paid to customers

 10,181,000

 11,113,000

 11,242,000

 Amortization of finished goods premiums paid to customers

 782,000

 678,000

 718,000

 Non-cash lease expense

 10,255,000

 8,348,000

 7,447,000

 Foreign exchange impact of lease liabilities and forward contracts

 ( 3,814,000

)

 ( 9,291,000

)

 ( 1,673,000

)

 Foreign currency remeasurement

 65,000

 1,408,000

 48,000

 Change in fair value of compound net derivative liability

 ( 1,020,000

)

 -

 -

 Loss due to the change in the fair value of the contingent consideration

 -

 -

 67,000

 (Gain) loss on short-term investments

 ( 347,000

)

 181,000

 ( 163,000

)

 Net provision for inventory reserves

 16,233,000

 18,851,000

 13,504,000

 Net provision for customer payment discrepancies

 1,452,000

 2,112,000

 2,142,000

 Net (recovery of) provision for doubtful accounts

 ( 133,000

)

 108,000

 95,000

 Deferred income taxes

 29,564,000

 ( 5,207,000

)

 ( 7,442,000

)

 Share-based compensation expense

 4,700,000

 4,685,000

 7,287,000

 Loss on disposal of plant and equipment

 9,000

 17,000

 36,000

 Change in operating assets and liabilities:

 Accounts receivable

 22,687,000

 ( 37,176,000

)

 ( 24,145,000

)

 Inventory

 ( 53,585,000

)

 10,423,000

 ( 95,529,000

)

 Inventory unreturned

 ( 3,666,000

)

 ( 1,531,000

)

 ( 437,000

)

 Income tax receivable

 ( 3,501,000

)

 ( 2,030,000

)

 111,000

 Prepaid expenses and other current assets

 3,100,000

 ( 2,906,000

)

 ( 682,000

)

 Other assets

 ( 601,000

)

 435,000

 122,000

 Accounts payable and accrued liabilities

 47,264,000

 ( 23,757,000

)

 17,453,000

 Customer finished goods returns accrual

 222,000

 ( 201,000

)

 6,533,000

 Contract assets, net

 ( 14,221,000

)

 ( 17,560,000

)

 ( 52,474,000

)

 Contract liabilities, net

 14,664,000

 17,719,000

 48,056,000

 Operating lease liabilities

 ( 8,702,000

)

 ( 7,141,000

)

 ( 5,442,000

)

 Other liabilities

 ( 1,257,000

)

 ( 881,000

)

 6,515,000

 Net cash provided by (used in) operating activities

 39,172,000

 ( 21,754,000

)

 ( 44,862,000

)

 Cash flows from investing activities:

 Purchase of plant and equipment

 ( 1,000,000

)

 ( 4,201,000

)

 ( 7,550,000

)

 Redemptions of (payments for) short term investments

 521,000

 10,000

 ( 388,000

)

 Net cash used in investing activities

 ( 479,000

)

 ( 4,191,000

)

 ( 7,938,000

)

 Cash flows from financing activities:

 Borrowings under revolving loan

 82,005,000

 65,000,000

 107,000,000

 Repayments under revolving loan

 ( 99,205,000

)

 ( 74,800,000

)

 ( 36,000,000

)

 Repayments of term loan

 ( 13,125,000

)

 ( 3,750,000

)

 ( 3,750,000

)

 Proceeds from issuance of convertible notes, related party

 -

 32,000,000

 -

 Payments for debt issuance costs

 ( 3,973,000

)

 ( 1,716,000

)

 ( 1,159,000

)

 Payments on finance lease obligations

 ( 1,862,000

)

 ( 2,397,000

)

 ( 2,716,000

)

 Exercise of stock options

 -

 940,000

 499,000

 Cash used to net share settle equity awards

 ( 279,000

)

 ( 969,000

)

 ( 1,745,000

)

 Repurchase of common stock, including fees

 -

 -

 ( 1,914,000

)

 Net cash (used in) provided by financing activities

 ( 36,439,000

)

 14,308,000

 60,215,000

 Effect of exchange rate changes on cash and cash equivalents

 124,000

 217,000

 78,000

 Net increase (decrease) in cash and cash equivalents

 2,378,000

 ( 11,420,000

)

 7,493,000

 Cash and cash equivalents — Beginning of year

 11,596,000

 23,016,000

 15,523,000

 Cash and cash equivalents — End of year

 $

 13,974,000

 $

 11,596,000

 $

 23,016,000

 Supplemental disclosures of cash flow information:

 Cash paid for interest, net

 $

 53,797,000

 $

 37,772,000

 $

 13,994,000

 Cash paid for income taxes, net of refunds

 9,558,000

 14,198,000

 6,746,000

 Cash paid for operating leases

 13,358,000

 12,055,000

 10,406,000

 Cash paid for finance leases

 2,081,000

 2,659,000

 3,061,000

 Plant and equipment acquired under finance lease

 745,000

 1,246,000

 836,000

 Assets acquired under operating leases

 1,603,000

 7,832,000

 16,187,000

 Non-cash capital expenditures

 16,000

 6,000

 661,000

 Debt issuance costs included in accounts payable and accrued liabilities

 -

 476,000

 -

 The accompanying notes to consolidated financial statements are an integral part hereof.

 Notes to Consolidated Financial Statements

 1. Company Background and Organization

 Motorcar Parts of America, Inc. and its subsidiaries (the "Company", or "MPA") is a leading supplier of automotive aftermarket non-discretionary
 replacement parts, and test solutions and diagnostic equipment. These replacement parts are primarily sold to automotive retail chain stores and warehouse distributors throughout North America and to major automobile manufacturers for both their
 aftermarket programs and warranty replacement programs ("OES"). The Company's test solutions and diagnostic equipment primarily serves the global automotive component and powertrain testing market. The Company's products include (i) light duty and
 heavy duty rotating electrical products such as alternators and starters, (ii) wheel hub assemblies and bearings, (iii) brake-related products, which include brake calipers, brake boosters, brake rotors, brake pads, brake shoes, and brake master
 cylinders, and (iv) other products, which include (a) turbochargers and (b) test solutions and diagnostic equipment including: (i) applications for combustion engine vehicles, including bench-top testers for alternators and starters, (ii) equipment
 for the pre- and post-production of electric vehicles, and (iii) software emulation of power system applications for the electrification of all forms of transportation (including automobiles, trucks, the emerging electrification of systems within
 the aerospace industry, and electric vehicle charging stations).

 The Company primarily ships its products from its facilities, including the Company's 410,000 square foot distribution center in Tijuana, Mexico, and various third-party warehouse distribution centers in North America.

 2. Summary of Significant Accounting Policies

 Recently Adopted Accounting Pronouncements

 Supplier Finance Programs

 In September 2022, the Financial Accounting Standards Board
 (the "FASB") issued Accounting Standards Update ("ASU") 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations. This standard requires
 qualitative and quantitative disclosures to enable users of the financial statements to understand the nature, activity during the period, changes from period to period and potential magnitude of supplier finance programs. The guidance is
 effective for fiscal years beginning after December 15, 2022.

 During the year ended March 31, 2024, the Company launched a
 supplier finance program as part of its ongoing efforts to improve cash flow and liquidity. This program allows certain of the Company's suppliers to sell their receivables due from the Company to a participating financial institution at the sole
 discretion of both the supplier and the financial institution. The program is administered by a third party. The Company has no economic interest in the sale of these receivables and no direct relationship with the financial institution. Payments
 to the third-party administrator are based on services rendered and are not related to the volume or number of financing agreements between suppliers, financial institution, and the third-party administrator. The Company is not a party to
 agreements negotiated between participating suppliers and the financial institution. The Company's obligations to its suppliers, including amounts due and payment terms, are not affected by a supplier's decision to participate in this program.
 The Company does not provide guarantees and there are no assets pledged to the financial institution or the third-party administrator for the committed payment in connection with this program. As of March 31, 2024, the Company had $ 1,695,000 of outstanding supplier obligations confirmed under this program, included in accounts payable in the consolidated balance sheet.

 Accounting Pronouncements Not Yet Adopted

 Disclosure Improvements

 In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. This standard was issued in response to the SEC's disclosure update and simplification
 initiative, which affects a variety of topics within the Accounting Standards Codification. The amendments apply to all reporting entities within the scope of the affected topics unless otherwise indicated. The effective date for each amendment
 will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the impact this guidance will have on its
 financial statement disclosures.

 Reportable Segment Disclosures

 In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This standard requires the Company to disclose significant segment expenses that are regularly provided to the CODM and are included within each reported
 measure of segment operating results. The standard also requires the Company to disclose the total amount of any other items included in segment operating results, which were not deemed to be significant expenses for separate disclosure, along
 with a qualitative description of the composition of these other items. In addition, the standard also requires disclosure of the CODM's title and position, as well as detail on how the CODM uses the reported measure of segment operating results
 to evaluate segment performance and allocate resources. The standard also aligns interim segment reporting disclosure requirements with annual segment reporting disclosure requirements. This guidance is effective for fiscal years beginning after
 December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.

 Improvements to Income Tax Disclosures

 In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). This standard requires the Company to provide further disaggregated income tax disclosures for specific categories on the effective tax rate reconciliation,
 as well as additional information about federal, state/local and foreign income taxes. The standard also requires the Company to annually disclose its income taxes paid (net of refunds received), disaggregated by jurisdiction. This guidance is
 effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is to be applied prospective basis, although optional retrospective application is permitted. The Company is currently evaluating the impact
 this guidance will have on its financial statement disclosures.

 Principles of Consolidation

 The accompanying consolidated financial statements include the accounts of Motorcar Parts of America, Inc. and its wholly owned subsidiaries. All significant inter-company
 accounts and transactions have been eliminated.

 Segment Reporting

 The Company's three operating segments are as follows:

 •

 Hard Parts, which includes (i) light duty rotating electric products such as alternators and starters, (ii) wheel hub products, (iii)
 brake-related products, including brake calipers, brake boosters, brake rotors, brake pads and brake master cylinders, and (iv) turbochargers,

 •

 Test Solutions and
 Diagnostic Equipment, which includes (i) applications for combustion engine vehicles, including bench-top testers for alternators and starters, (ii) equipment for the pre- and post-production of electric vehicles, and
 (iii) software emulation of power system applications for the electrification of all forms of transportation (including automobiles, trucks, the emerging electrification of systems within the aerospace industry, and electric
 vehicle charging stations), and

 •

 Heavy Duty, which
 includes non-discretionary automotive aftermarket replacement hard parts for heavy-duty truck, industrial, marine, and agricultural applications.

 The Company's Hard Parts operating segment meets the
 criteria of a reportable segment. The Test Solutions and Diagnostic Equipment and Heavy Duty segments are not material, are not required to be separately reported, and are included within the "all other" category. See Note 19 for more
 information.

 Cash and Cash Equivalents

 Cash primarily consists of cash on hand and bank deposits. Cash equivalents consist of money market funds. The Company considers all highly liquid investments purchased
 with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with various financial institutions.

 Accounts Receivable

 The Company's accounts receivable are recorded at amortized cost less an allowance for credit losses that are not expected to be recovered. The net amount of accounts
 receivable and corresponding allowance for credit losses are presented in the consolidated balance sheets. The Company maintains allowances for credit losses resulting from the expected failure or inability of its customers to make required payments.
 The Company does not require collateral for accounts receivable. The Company believes its credit risk with respect to trade accounts receivable is limited due to its
 credit evaluation process and the long-term nature of its relationships with its largest customers. The Company utilizes a historical loss rate method, adjusted for any changes in economic conditions or risk characteristics, to estimate its
 expected credit losses each period. When developing an estimate of expected credit losses, the Company considers all available relevant information regarding
 the collectability of cash flows, including historical information, current conditions, and reasonable and supportable forecasts of future economic conditions over the contractual life of the receivable. The historical loss rate method considers
 past write-offs of trade accounts receivable over a period commensurate with the initial term of the Company's contracts with its customers. The Company recognizes the allowance for credit losses at inception and reassesses quarterly based on
 management's expectation of the asset's collectability. The Company's accounts receivable are short-term in nature and written off only when all collection attempts have failed.

 The Company has receivable discount programs that have been established with certain major customers and their respective banks. Under these programs, the Company has the
 option to sell those customers' receivables to those banks at a discount to be agreed upon at the time the receivables are sold. Once the customer chooses which outstanding invoices are going to be made available for discounting, the Company can
 accept or decline the bundle of invoices provided. The receivable discount programs are non-recourse, and funds cannot be reclaimed by the customer or its bank after the related invoices have been discounted.

 Inventory

 Inventory is comprised of: (i) Used Core and component raw materials, (ii) work-in-process, (iii) remanufactured finished goods and purchased finished goods.

 Used Core, component raw materials, and purchased finished goods are stated at the lower of average cost or net realizable value.

 Work-in-process is in various stages of production and is valued at the average cost of Used Cores and component raw materials issued to work orders still open, including
 allocations of labor and overhead costs. Historically, work-in-process inventory has not been material compared to the total inventory balance.

 Remanufactured finished goods include: (i) the Used Core cost and (ii) the cost of component raw materials, and allocations of labor and variable and fixed overhead costs
 (the "Unit Cost"). The allocations of labor and variable and fixed overhead costs are based on the actual use of the production facilities over the prior 12 months which approximates normal capacity. This method prevents the distortion in allocated labor and overhead costs that would occur during short periods of abnormally low or high production. In addition, the Company excludes
 certain unallocated overhead such as severance costs, duplicative facility overhead costs, start-up costs, training, and spoilage from the calculation and expenses these unallocated overhead costs as period costs. Purchased finished goods also
 include an allocation of fixed overhead costs.

 The estimate of net realizable value is subjective and based on management's judgment and knowledge of current industry demand and management's projections of industry
 demand. The estimates may, therefore, be revised if there are changes in the overall market for the Company's products or market changes that in management's judgment impact its ability to sell or liquidate potentially excess or obsolete inventory.
 Net realizable value is determined at least quarterly as follows:

 •

 Net realizable value for finished goods by customer, by product line are determined based on the agreed upon selling price with the customer for a product in the
 trailing 12 months. The Company compares the average selling price, including any discounts and allowances, to the finished goods cost of on-hand inventory, less any reserve for excess and obsolete inventory. Any reduction of value is
 recorded as cost of goods sold in the period in which the revaluation is identified.

 •

 Net realizable value for Used Cores are determined based on current core purchase prices from core brokers to the extent that core purchases in the trailing 12
 months are significant. Remanufacturing consumes, on average, more than one Used Core for each remanufactured unit produced since not all Used Cores are reusable. The yield rates depend upon both the product and consumer specifications. The
 Company purchases Used Cores from core brokers to supplement its yield rates and Used Cores not returned under the core exchange programs. The Company also considers the net selling price its customers have agreed to pay for Used Cores that
 are not returned under its core exchange programs to assess whether Used Core cost exceeds Used Core net realizable value on a by customer, by product line basis. Any reduction of core cost is recorded as cost of goods sold in the period in
 which the revaluation is identified.

 •

 The Company records an allowance for potentially excess and obsolete
 inventory based upon recent sales history, the quantity of inventory on-hand, and a forecast of potential use of the inventory. The Company periodically reviews inventory to identify excess quantities and part numbers that are experiencing a
 reduction in demand. Any part numbers with quantities identified during this process are reserved for at rates based upon management's judgment, historical rates, and consideration of possible scrap and liquidation values which may be as high
 as 100 % of cost if no liquidation market exists for the part. As a result of this process, the Company recorded reserves for
 excess and obsolete inventory of $ 17,372,000 and $ 16,436,000 at March 31, 2024 and 2023 respectively. This increase in the reserve was primarily due to excess inventory of certain finished goods
 on hand at March 31, 2024 compared with March 31, 2023.

 The Company records vendor discounts as a reduction of inventories and are recognized as a reduction to cost of sales as the inventories are sold.

 Inventory Unreturned

 Inventory unreturned represents the Company's estimate, based on historical data and prospective information provided directly by the customer, of
 finished goods shipped to customers that the Company expects to be returned under its general right of return policy, after the balance sheet date. Inventory unreturned includes only the Unit Cost of a finished good. The return rate is calculated
 based on expected returns within the normal operating cycle, which is generally one year. As such, the related amounts are classified in
 current assets. Inventory unreturned is valued in the same manner as the Company's finished goods inventory.

 Contract Assets

 Contract assets consists of: (i) the core portion of the finished goods shipped to customers, (ii) upfront payments to customers in connection with
 customer contracts, (iii) core premiums paid to customers, (iv) finished goods premiums paid to customers, and (v) long-term core inventory deposits.

 Remanufactured Cores held at customers' locations as a part of the finished goods sold to the customer are classified as long-term contract assets.
 These assets are valued at the lower of cost or net realizable value of Used Cores on hand (See Inventory above). For these Remanufactured Cores, the Company expects the finished good containing the Remanufactured Core to be returned under the
 Company's general right of return policy or a similar Used Core to be returned to the Company by the customer, under the Company's core exchange programs, in each case for credit. The Remanufactured Cores and Used Cores returned by consumers to the
 Company's customers but not yet returned to the Company are classified as "Cores expected to be returned by customers", which are included in short-term contract assets until the Company physically receives them during its normal operating cycle,
 which is generally one year.

 Upfront payments to customers represent marketing allowances, such as sign-on bonuses, slotting fees, and promotional allowances provided by the
 Company to its customers. These allowances are recognized as an asset and amortized over the appropriate period of time as a reduction of revenue if the Company expects to generate future revenues associated with the upfront payment. If the Company
 does not expect to generate additional revenue, then the upfront payment is recognized in the consolidated statements of operations when payment occurs as a reduction of revenue. Upfront payments expected to be amortized during the Company's normal
 operating cycle, which is generally one year, are classified as short-term contract assets.

 Core premiums paid to customers represent the difference between the Remanufactured Core acquisition price paid to customers, generally in connection
 with new business, and the related Used Core cost. The core premiums are treated as an asset and recognized as a reduction of revenue through the later of the date at which related revenue is recognized or the date at which the sales incentive is
 offered. The Company considers, among other things, the length of its largest ongoing customer relationships, duration of customer contracts, and the average life of vehicles on the road in determining the appropriate period of time over which to
 amortize these premiums. These core premiums are amortized over a period typically ranging from six to eight years, adjusted for specific circumstances associated with the arrangement. Core premiums are recorded as long-term contract assets. Core premiums
 expected to be amortized within the Company's normal operating cycle, which is generally one year, are classified as short-term contract assets.

 Finished goods premiums paid to customers represent the difference between the finished good acquisition price paid to customers, generally in connection with new business,
 and the related finished good cost, which is treated as an asset and recognized as a reduction of revenue through the later of the date at which related revenue is
 recognized or the date at which the sales incentive is offered. The Company considers, among other things, the length of its largest ongoing customer relationships, duration of customer contracts, and the average life of vehicles on the road
 in determining the appropriate period of time over which to amortize these premiums. Finished goods premiums are amortized over a period typically ranging from six to eight years, adjusted for specific circumstances associated with the arrangement. Finished goods
 premiums are recorded as long-term contract assets. Finished goods premiums expected to be amortized within our normal operating cycle, which is generally one year,
 are classified as short-term contract assets.

 Long-term core inventory deposits represent the cost of Remanufactured Cores the Company has purchased from customers, which are held by the customers
 and remain on the customers' premises. The costs of these Remanufactured Cores were established at the time of the transaction based on the then current cost. The selling value of these Remanufactured Cores was established based on agreed upon
 amounts with these customers. The Company expects to realize the selling value and the related cost of these Remanufactured Cores should its relationship with a customer end, a possibility that the Company considers remote based on existing long-term
 customer agreements and historical experience.

 Customer Finished Goods Returns Accrual

 The customer finished goods returns accrual represents the Company's estimate of its exposure to customer returns, including warranty returns, under
 its general right of return policy to allow customers to return items that their end user customers have returned to them and from time to time, stock adjustment returns when the customers' inventory of certain product lines exceeds the anticipated
 sales to end-user customers. The customer finished goods returns accrual represents the Unit Value of the estimated returns and is classified as a current liability due to the expectation that these returns will occur within the normal operating
 cycle of one year.

 Income Taxes

 The Company accounts for income taxes using the liability method, which measures deferred income taxes by applying enacted statutory rates in effect at
 the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The resulting asset or liability is adjusted to reflect changes in the tax laws as they occur. A
 valuation allowance is provided to reduce deferred tax assets when it is more likely than not that a portion of the deferred tax asset will not be realized.

 The primary components of the Company's income tax expense were (i) federal income
 taxes, (ii) state income taxes, (iii) foreign income taxed at rates that are different from the federal statutory rate, (iv) change in realizable deferred tax items, (v) impact of the non-deductible executive compensation under Internal Revenue
 Code Section 162(m), (vi) the portion of book expense related to convertible notes and derivatives that is not expected to be deductible for tax, and (vii) income taxes associated with uncertain tax positions.

 Realization of deferred tax assets is dependent upon the Company's ability to generate sufficient future taxable income. Significant judgment is
 required in determining the Company's provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company's net deferred tax assets. The Company makes these estimates and judgments about its future
 taxable income that are based on assumptions that are consistent with the Company's future plans. A valuation allowance is established when the Company believes it is not more likely than not all or some deferred tax assets will be realized. In
 evaluating the Company's ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected
 future taxable income, past financial performance, and tax planning strategies. Deferred tax assets arising primarily as a result of net operating loss carry-forwards and research and development credits in connection with the Company's Canadian
 operations have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. During the year ended March 31, 2024, the Company recorded a discrete non-cash valuation allowance of $ 38,009,000 on U.S. federal and various state deferred tax assets that is considered not more likely than not to be realized under U.S. GAAP. Should the
 actual amount differ from the Company's estimates, the amount of the valuation allowance could be impacted.

 The Company has made an accounting policy election to recognize the U.S. tax effects of global intangible low-taxed income as a component of income tax
 expense in the period the tax arises.

 Plant and Equipment

 Plant and equipment are stated at cost, less accumulated depreciation. The cost of
 additions and improvements are capitalized, while maintenance and repairs are charged to expense when incurred. Depreciation is provided on a straight-line basis in amounts sufficient to relate the cost of depreciable assets to operations over
 their estimated service lives. Machinery and equipment are depreciated over a range from five to ten years. Office equipment and fixtures are depreciated over a range from three to ten years. Leasehold improvements are depreciated over the lives of the respective leases or the service lives of the leasehold improvements, whichever is shorter. Depreciation of assets recorded under finance leases is included in
 depreciation expense. The Company evaluates plant and equipment, including leasehold improvements, equipment, construction in progress, and right-of-use assets for impairment whenever events or circumstances indicate that the carrying value
 of an asset or asset group may not be recoverable. There was no impairment recorded during the years ended March 31, 2024, 2023, or
 2022.

 Leases

 The Company determines if an arrangement contains a lease at inception. Lease assets and lease liabilities are recorded based on the present value of lease payments over
 the lease term, which includes the minimum unconditional term of the lease. Certain of the Company's leases include options to extend the leases for up to five years. When the Company has the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that it will exercise the option, the option
 is considered in determining the classification and measurement of the lease. The lease assets are recorded net of any lease incentives received. The Company exempts leases with an initial term of 12 months or less from balance sheet recognition and,
 for all classes of assets, combines non-lease components with lease components. Lease assets are tested for impairment in the same manner as long-lived assets used in operations.

 The Company uses its incremental borrowing rate for each of its leases in determining the present value of its expected lease payments based on the information available at
 the lease commencement date as the rate implicit for each of its leases is not readily detainable. The Company's incremental borrowing rate is determined by analyzing and combining (i) an applicable risk-free rate, (ii) a financial spread adjustment,
 and (iii) any lease specific adjustment. Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services, which are
 expensed as incurred and not included in the determination of lease assets and lease liabilities. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees, and other factors.
 The Company records rent expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term.

 The Company has material non-functional currency leases. As required for other monetary liabilities, lessees shall remeasure a foreign currency-denominated lease liability
 using the exchange rate at each reporting date, but the lease assets are nonmonetary assets measured at historical rates, which are not affected by subsequent changes in the exchange rates. The Company recorded gains of $ 5,187,000, $ 6,515,000 and $ 1,989,000 during the years ended March 31, 2024, 2023 and 2022, respectively, which are included in foreign exchange impact of lease liabilities and
 forward contracts in the consolidated statements of operations. See Note 10 for additional information regarding the Company's leases.

 Goodwill

 The Company evaluates goodwill for impairment at least annually during the fourth quarter of each fiscal year or more frequently when an event occurs
 or circumstances change that indicate the carrying value may not be recoverable. The goodwill impairment test is performed at the reporting unit level, which represents the Company's operating segments. In testing for goodwill impairment, the Company
 may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company's qualitative assessment indicates that goodwill impairment is
 more likely than not, it will proceed with performing the quantitative assessment. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired. If the carrying value of the reporting unit exceeds its fair
 value an impairment loss will be recognized for the amount by which the carrying value exceeds the reporting unit's fair value. The Company completes the required annual testing of goodwill impairment for each of the reporting units during the fourth
 quarter of the year. No impairment was recorded during the years ended March 31, 2024, 2023, or 2022.

 Intangible Assets

 The Company's intangible assets other than goodwill are finite–lived and amortized on a straight-line basis over their respective useful lives. The Company analyzes its
 finite-lived intangible assets for impairment when and if indicators of impairment exist. No impairment was recorded during the years
 ended March 31, 2024, 2023 or 2022.

 Debt Issuance Costs

 Debt issuance costs include fees and costs incurred to obtain financing. Debt issuance costs related to the Company's term loan and convertible notes
 are presented in the balance sheet as a direct deduction from carrying amounts of the respective debt. Debt issuance costs related to the Company's revolving loan are presented in prepaid expenses and other current assets in the accompanying
 consolidated balance sheets, regardless of whether or not there are any outstanding borrowings under the revolving loan. Debt issuance costs related to the Company's convertible notes are amortized using the effective interest method and debt
 issuance costs related to the Company's term loans and revolving loans are amortized using the straight-line method, which approximates the effective interest method. Debt issuance costs are amortized over the term of the related loans and included
 in interest expense in the Company's consolidated statements of operation s.

 Foreign Currency Translation

 For financial
 reporting purposes, the functional currency of the foreign subsidiaries is the local currency. The assets and liabilities of foreign operations for which the local currency is the functional currency are translated into the U.S. dollar at the
 exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average exchange rates during the year. The accumulated foreign currency translation adjustment is presented as a component of comprehensive income or
 loss in the consolidated statements of shareholders' equity. Aggregate foreign currency transactions recorded in general and administrative expenses were a gain of $ 515,000, a loss of $ 1,401,000, and a gain
 of $ 239,000 for the years ended March 31, 2024, 2023, and 2022, respectively.

 Revenue Recognition

 Revenue is recognized when performance obligations under the terms of a contract with the Company's customers are satisfied; generally, this occurs with the transfer of
 control of its products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Revenue is recognized net of all anticipated returns, marketing allowances, volume discounts, and other forms of variable consideration. Revenue is recognized either when products are shipped or when delivered, depending on the applicable
 contract terms.

 The price of a finished remanufactured product sold to customers is generally comprised of separately invoiced amounts for the Remanufactured Core included in the product
 ("Remanufactured Core value") and the unit portion included in the product ("Unit Value"), for which revenue is recorded based on our then current price list, net of applicable discounts and allowances. The Remanufactured Core value is recorded as a
 net revenue based upon the estimate of Used Cores that will not be returned by the customer for credit. These estimates are subjective and based on management's judgment and knowledge of historical, current, and projected return rates. As
 reconciliations are completed with the customers the actual rates at which Used Cores are not being returned may differ from the current estimates. This may result in periodic adjustments of the estimated contract asset and liability amounts recorded
 and may impact the projected revenue recognition rates used to record the estimated future revenue. These estimates may also be revised if there are changes in contractual arrangements with customers, or changes in business practices. A significant
 portion of the remanufactured automotive parts sold to customers are replaced by similar Used Cores sent back for credit by customers under the core exchange programs (as described in further detail below). The number of Used Cores sent back under
 the core exchange programs is generally limited to the number of similar Remanufactured Cores previously shipped to each customer.

 Revenue Recognition — Core Exchange Programs

 Full price Remanufactured Cores: When remanufactured products are shipped, certain customers are invoiced for the Remanufactured Core value of the product at the full
 Remanufactured Core sales price. For these Remanufactured Cores, revenue is only recognized based upon an estimate of the rate at which these customers will pay cash for Remanufactured Cores in lieu of sending back similar Used Cores for credits
 under the core exchange programs. The remainder of the full price Remanufactured Core value invoiced to these customers is established as a long-term contract liability rather than being recognized as revenue in the period the products are shipped as
 the Company expects these Remanufactured Cores to be returned for credit under its core exchange programs.

 Nominal price Remanufactured Cores: Certain other customers are invoiced for the Remanufactured Core value of the product shipped at a nominal (generally $ 0.01 or less) Remanufactured Core price. For these nominal Remanufactured Cores, revenue is only recognized based upon an estimate of the rate at which
 these customers will pay cash for Remanufactured Cores in lieu of sending back similar Used Cores for credits under the core exchange programs. Revenue amounts are calculated based on contractually agreed upon pricing for these Remanufactured Cores
 for which the customers are not returning similar Used Cores. The remainder of the nominal price Remanufactured Core value invoiced to these customers is established as a long-term contract liability rather than being recognized as revenue in the
 period the products are shipped as the Company expects these Remanufactured Cores to be returned for credit under its core exchange programs.

 Revenue Recognition; General Right of Return

 Customers are allowed to return goods that their end-user customers have returned to them, whether or not the returned item is defective (warranty
 returns). In addition, under the terms of certain agreements and industry practice, customers from time to time are allowed stock adjustments when their inventory of certain product lines exceeds the anticipated sales to end-user customers (stock
 adjustment returns). Customers have various contractual rights for stock adjustment returns, which are typically less than 5 % of units
 sold. In some instances, a higher level of returns is allowed in connection with significant restocking orders. The aggregate returns are generally limited to less than 20 % of unit sales.

 The allowance for warranty returns is established based on a historical analysis of the level of this type of return as a percentage of total unit
 sales. The allowance for stock adjustment returns is based on specific customer inventory levels, inventory movements, and information on the estimated timing of stock adjustment returns provided by customers. Stock adjustment returns do not occur
 at any specific time during the year. The return rate for stock adjustments is calculated based on expected returns within the normal operating cycle, which is generally one year.

 The Unit Value of the warranty and stock adjustment returns are treated as reductions of revenue based on the estimations made at the time of the sale.
 The Remanufactured Core value of warranty and stock adjustment returns are provided for as indicated in the paragraph "Revenue Recognition – Core Exchange Programs".

 As is standard in the industry, the Company only accepts returns from on-going customers. If a customer ceases doing business with the Company, it has no further obligation
 to accept additional product returns from that customer. Similarly, the Company accepts product returns and grants appropriate credits to new customers from the time the new customer relationship is established.

 Shipping Costs

 The Company includes shipping and handling charges in the gross invoice price to customers and classifies the total amount as revenue. All shipping and handling costs are
 expensed as cost of sales as inventory is sold.

 Contract Liability

 Contract liability consists of: (i) customer allowances earned, (ii) accrued core payments, (iii) customer core returns accruals, (iv) core bank
 liability, (v) finished goods liabilities, and (vi) customer deposits.

 Customer allowances earned includes all marketing allowances provided to customers.
 Such allowances include sales incentives and concessions. Voluntary marketing allowances related to a single exchange of product are recorded as a reduction of revenues at the time the related revenues are recorded or when such incentives are
 offered. Other marketing allowances, which may only be applied against future purchases, are recorded as a reduction to revenues in accordance with a schedule set forth in the relevant contract. Sales incentive amounts are recorded based on the
 value of the incentive provided. See Note 14 for a description of all marketing allowances. Customer allowances to be provided to customers within the
 Company's normal operating cycle, which is generally one year, are considered short-term contract liabilities and the remainder are recorded as long-term contract liabilities.

 Accrued core payments represent the sales price of Remanufactured Cores purchased from customers, generally in connection with new business, which
 are held by these customers and remain on their premises. The sales price of these Remanufactured Cores will be realized when the Company's relationship with a customer ends, a possibility that the Company considers remote based on existing
 long-term customer agreements and historical experience. The payments to be made to customers for purchases of Remanufactured Cores within the Company's normal operating cycle, which is generally one year, are considered short-term contract
 liabilities and the remainder are recorded as long-term contract liabilities.

 Customer core returns accruals represent the full and nominally priced Remanufactured Cores shipped to the Company's customers. When the Company
 ships the product, it recognizes an obligation to accept a similar Used Core sent back under the core exchange programs based upon the Remanufactured Core price agreed upon by the Company and its customer. The Contract liability related to Used
 Cores returned by consumers to the Company's customers but not yet returned to the Company are classified as short-term contract liabilities until the Company physically receives these Used Cores as they are expected to be returned during the
 Company's normal operating cycle, which is generally one year and the remainder are recorded as long-term contract liabilities.

 The core bank liability represents the full Remanufactured Core sales price paid for cores returned under the core exchange programs. The payment for
 these cores are made over a contractual repayment period pursuant to the Company's agreement with this customer. Payments to be made within the Company's normal operating cycle, which is generally one year, are considered short-term contract
 liabilities and the remainder are recorded as long-term contract liabilities.

 Finished goods liabilities represents the agreed upon price of finished goods purchased from customers, generally in connection with new business.
 The payment for these finished goods are made over a contractual repayment period pursuant to the Company's agreement with the customer. Payments to be made within the Company's normal operating cycle, which is generally one year, are considered
 short-term contract liabilities and the remainder are recorded as long-term contract liabilities.

 Customer deposits represent the receipt of prepayments from customers for the obligation to transfer goods or services in the future. The Company
 classifies these customer deposits as short-term contract liabilities as the Company expects to satisfy these obligations within its normal operating cycle, which is generally one year.

 Advertising Costs

 The Company expenses all advertising costs as incurred. Advertising expenses for the years ended March 31, 2024, 2023 and 2022 were $ 614,000, $ 606,000, and $ 1,007,000, respectively.

 Net (Loss) Income Per Share

 Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding during the period. Diluted net (loss) income per share includes the effect, if any, from the potential
 exercise or conversion of securities, such as stock options, warrants, and Convertible Notes (as defined in Note 8), which would result in the issuance of incremental shares of common stock to the extent such
 impact is not anti-dilutive.

 The following presents a reconciliation of basic and diluted net (loss) income per share.

 2024

 2023

 2022

 Net (loss) income

 $

)

 $

)

 $

 Basic shares

 19,601,204

 19,340,246

 19,119,727

 Effect of dilutive stock options

 -

 -

 439,919

 Diluted shares

 19,601,204

 19,340,246

 19,559,646

 Net (loss) income per share:

 Basic net (loss) income per share

 $

 ( 2.51

)

 $

 ( 0.22

)

 $

 0.38

 Diluted net (loss) income per share

 $

 ( 2.51

)

 $

 ( 0.22

)

 $

 0.38

 Potential common shares that would have the effect of increasing diluted net income per share or decreasing diluted net loss per share are considered to be anti-dilutive
 and as such, these shares are not included in calculating diluted net (loss) income per share. For the years ended March 31, 2024, 2023 and 2022, there were 2,122,863,
 1,854,795, and 725,998,
 respectively, of potential common shares not i ncluded in the calculation of diluted net (loss) income per share because their effect was
 anti-dilutive. In addition, for the year ended March 31, 2024 and 2023, there were 1,693,778 and 5,846, respectively, of potential common shares not included in the calculation of diluted net (loss) income per share under the "if-converted" method
 for the Convertible Notes because their effect was anti-dilutive.
 The potential common shares related to the Warrants (as defined below) issued in connection with the Convertible Notes (see Note 8) are anti-dilutive until they become exercisable and as of March 31, 2024, the Warrants were not exercisable.

 Use of Estimates

 The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make
 estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. On an on-going basis, the Company evaluates its estimates, including
 allowances for credit losses, valuation of inventory and Used Cores, valuation of long-lived assets, goodwill and intangible assets, useful lives of long-lived assets, litigation matters, valuation of deferred tax assets, share-based compensation,
 sales returns and other customer marketing allowances, the incremental borrowing rate used in determining the present value of lease liabilities, and valuation of the embedded derivatives in connection with the convertible notes. Although the Company
 does not believe that there is a reasonable likelihood that there will be a material change in the future estimate or in the assumptions used in calculating the estimate, unforeseen changes in the industry, or business could materially impact the
 estimate and may have a material adverse effect on its business, financial condition and results of operation s.

 Financial Instruments

 The carrying amounts of cash
 and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these instruments. The carrying amount of short-term investments approximates their fair value as the
 shares of these mutual funds trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis. The carrying amounts of the revolving loan and other long-term liabilities approximate their fair value
 based on the variable nature of interest rates and current rates for instruments with similar characteristics. The estimated fair value of the Company's Convertible Notes (as defined in Note 8) was $ 38,276,000 using Level 3 inputs at March 31, 2024. The net carrying amount of the Convertible Notes approximated their fair value at March 31, 2023, as they were issued on March
 31, 2023. See Note 13 for further information concerning the fair value of the Company's Convertible Notes.

 Share-Based Payments

 The Company has share-based compensation plans and recognizes
 compensation expense over the requisite service period for its share-based plans based on the fair value of the awards on the date of the grant, award or issuance and accounts for forfeitures as they occur. Share-based plans include stock option
 awards, restricted stock units, restricted stock awards, and performance stock units issued under the Company's incentive plans. The cost is measured at the grant date, based on (i) the estimated fair value of the award using the Black-Scholes
 option pricing model for stock options, (ii) the closing share price of the Company's stock on the grant date for restricted stock units and restricted stock awards, (iii) the closing share price of the Company's stock on the grant date for
 performance stock units subject to performance conditions, and (iv) the estimated fair value of the award using the Monte Carlo valuation model for performance stock units subject to market conditions. See Note 18 for further information concerning
 the Company's share-based payments.

 The Black-Scholes option-pricing model and Monte Carlo valuation model require the input of assumptions including the expected volatility of the underlying stock and the
 expected holding period of the option. These assumptions are based on both historical and other information. Changes in the values assumed and used in the model can materially affect the estimate of fair value.

 Credit Risk

 The Company regularly reviews its accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality and age of the
 accounts receivable, and the current economic conditions that may affect a customer's ability to pay. The majority of the Company's sales are to leading automotive aftermarket parts suppliers. The Company participates in trade accounts receivable
 discount programs with its major customers. If the creditworthiness of any of its customers was downgraded, the Company could be adversely affected, in that it may be subjected to higher interest rates on the use of these discount programs or it
 could be forced to wait longer for payment. Should the Company's customers experience significant cash flow problems, its financial position and results of operations could be materially and adversely affected, and the maximum amount of loss that
 would be incurred would be the outstanding receivable balance, Used Cores expected to be returned by customers, and the value of the Remanufactured Cores held at customers' locations. The Company maintains an allowance for credit losses that, in
 its opinion, provide for an adequate reserve to cover losses that may be incurred.

 Deferred Compensation Plan

 The Company has a deferred compensation plan for certain members of management. The plan allows participants to defer salary and bonuses. The assets of the plan, which are
 held in a trust and are subject to the claims of the Company's general creditors under federal and state laws in the event of insolvency, are recorded as short-term investments in the consolidated balance sheets. Consequently, the trust qualifies as
 a Rabbi trust for income tax purposes. The plan's assets consist primarily of mutual funds and are recorded at market value with any unrealized gain or loss recorded as general and administrative expense. The carrying value of plan assets were $ 1,837,000 and $ 2,011,000, and the deferred
 compensation liability, which is included in other current liabilities in the accompanying consolidated balance sheets, was $ 1,837,000 and
 $ 2,011,000 at March 31, 2024 and 2023, respectively. During the years ended March 31, 2024, 2023, and 2022, the Company made contributions
 of $ 6,000, $ 75,000 and $ 119,000, respectively. During the year ended March 31, 2024, the Company's matching contributions under its deferred compensation plan were temporarily halted through February 2024 when they were reinstated.

 During the years ended March 31,
 2024, 2023, and 2022, contributions of $ 82,000, $ 287,000, and $ 388,000, respectively, were made to the deferred compensation plan. During the years
 ended March 31, 2024 and 2023, the Company redeemed $ 603,000 and $ 297,000, respectively, of its short-term investments for the payment of deferred compensation liabilities. During the year ended March 31, 2022, the Company did no t redeem any of its short-term investments for the payment of deferred compensation liabilities.

 The following summarizes the gain (loss) on the Company's equity investments:

 2024

 2023

 2022

 Net gain (loss) recognized on equity securities

 $

 347,000

 $

 ( 181,000

)

 $

 163,000

 Less: net gain (loss) recognized on equity securities sold

 74,000

 ( 15,000

)

 -

 Unrealized gain (loss) recognized on equity securities still held

 $

 273,000

 $

 ( 166,000

)

 $

 163,000

 Comprehensive Income or Loss

 Comprehensive income or loss is defined as the change in equity during a period resulting from transactions and other events and circumstances from
 non-owner sources. The Company's total comprehensive income or loss consists of net unrealized income or loss from foreign currency translation adjustments.

 3. Goodwill and Intangible Assets

 Goodwill

 The Company had goodwill of $ 3,205,000 at March 31, 2024
 and 2023, which was comprised of $ 2,551,000 for the Hard Parts
 segment and $ 654,000 for all others, respectively.

 Intangible Assets

 The following is a summary of acquired intangible assets subject to amortization:

 Amortization

 Period

 Gross Carrying

 Value

 Accumulated

 Amortization

 Gross Carrying

 Value

 Accumulated

 Amortization

 Intangible assets subject to amortization

 Trademarks

 9 years

 $

 705,000

 $

 641,000

 $

 705,000

 $

 577,000

 Customer relationships

 11 years

 8,573,000

 7,568,000

 8,576,000

 6,947,000

 Developed technology

 5 years

 -

 -

 2,667,000

 2,281,000

 Total

 9 years

 $

 9,278,000

 $

 8,209,000

 $

 11,948,000

 $

 9,805,000

 D uring the year ended March 31, 2024, the Company retired $ 2,667,000 of fully amortized intangible assets. During the year ended March 31, 2023, the Company did no t retire any fully amortized intangible assets.

 Amortization expense for acquired intangible assets is as follows:

 2024

 2023

 2022

 Amortization expense

 $

 1,075,000

 $

 1,460,000

 $

 1,548,000

 The estimated future amortization expense for acquired intangible assets subject to amortization is as follows:

 Year Ending March 31,

 2025

 486,000

 2026

 341,000

 2027

 242,000

 Total

 $

 1,069,000

 4. Accounts Receivable — Net

 The Company has trade accounts receivable that result from the sale of goods and services. Accounts receivable — net includes offset accounts related
 to customer payment discrepancies, returned goods authorizations ("RGAs") issued for in-transit unit returns, and allowances for credit losses.

 Accounts receivable — net is comprised of the following:

 Accounts receivable — trade

 $

 118,500,000

 $

 136,076,000

 Allowance for credit losses

 ( 189,000

)

 ( 339,000

)

 Customer payment discrepancies

 ( 1,206,000

)

 ( 1,634,000

)

 Customer returns RGA issued

 ( 20,809,000

)

 ( 14,235,000

)

 Less: total accounts receivable offset accounts

 ( 22,204,000

)

 ( 16,208,000

)

 Total accounts receivable — net

 $

 96,296,000

 $

 119,868,000

 5. Inventory

 Inventory is comprised of the following:

 Raw materials

 $

 158,819,000

 $

 147,880,000

 Work in process

 7,943,000

 7,033,000

 Finished goods

 227,650,000

 201,198,000

 394,412,000

 356,111,000

 Less allowance for excess and obsolete inventory

 ( 17,372,000

)

 ( 16,436,000

)

 Total

 $

 377,040,000

 $

 339,675,000

 Inventory unreturned

 $

 20,288,000

 $

 16,579,000

 6. Contract Assets

 During the years ended March 31, 2024 and 2023, the Company reduced the carrying value of Remanufactured Cores held at customers' locations by $ 5,353,000 and $ 3,736,000, respectively.

 Contract assets are comprised of the following:

 Short-term contract assets

 Cores expected to be returned by customers

 $

 15,409,000

 $

 13,463,000

 Core premiums paid to customers

 9,567,000

 9,812,000

 Upfront payments to customers

 1,407,000

 1,593,000

 Finished goods premiums paid to customers

 756,000

 575,000

 Total short-term contract assets

 $

 27,139,000

 $

 25,443,000

 Remanufactured cores held at customers' locations

 $

 279,427,000

 $

 271,628,000

 Core premiums paid to customers

 30,227,000

 38,310,000

 Long-term core inventory deposits

 5,569,000

 5,569,000

 Upfront payments to customers

 2,718,000

 344,000

 Finished goods premiums paid to customers

 2,341,000

 2,530,000

 Total long-term contract assets

 $

 320,282,000

 $

 318,381,000

 7. Plant and Equipment

 Plant and equipment is comprised of the following:

 Machinery and equipment

 $

 63,048,000

 $

 62,556,000

 Office equipment and fixtures

 33,463,000

 32,769,000

 Leasehold improvements

 15,110,000

 14,301,000

 111,621,000

 109,626,000

 Less: accumulated depreciation

 ( 73,283,000

)

 ( 63,574,000

)

 Total

 $

 38,338,000

 $

 46,052,000

 Plant and equipment located in the foreign countries where the Company has facilities, net of accumulated depreciation, totaled $ 33,455,000 and $ 40,609,000, of which $ 30,992,000 and $ 37,667,000 is located in
 Mexico, at March 31, 2024 and 2023, respectively.

 8. Debt

 The Company is party to a $ 268,620,000 senior secured
 financing, (as amended from time to time, the "Credit Facility") with a syndicate of lenders and PNC Bank, National Association, as administrative agent, consisting of (i) a $ 238,620,000 revolving loan facility, subject to borrowing base restrictions, a $ 24,000,000
 sublimit for borrowings by Canadian borrowers, and a $ 20,000,000 sublimit for letters of credit (the "Revolving Facility") and (ii) a $ 30,000,000 term loan facility (the "Term Loans"). Prior to the eighth amendment discussed below, the loans under the Credit Facility were scheduled to
 mature on May 28, 2026. In connection with the Credit Facility, the lenders have a security interest in substantially all of the Company's
 assets.

 On August 3, 2023, the Company entered into a seventh amendment to the Credit Facility, which among other things, (i) permitted the Company to repay its outstanding balance of Term Loans, (ii) permitted
 the exclusion of quarterly principal payments of Term Loans from the fixed charge coverage ratio (including retrospectively for the prior periods) for all quarters beginning June 30, 2023, (iii) reset the fixed charge coverage ratio financial
 covenant level for the quarters ending September 30, 2023 and December 31, 2023, (iv) eliminated the senior leverage ratio financial covenant effective with the quarter ended June 30, 2023, (v) extended the minimum undrawn availability financial
 covenant through the delivery of the June 30, 2024 compliance certificate, and (vi) excluded the amount of all amendment fees and expenses incurred in connection with this amendment as well as prior unamortized fees associated with the Term Loans
 from bank EBITDA and the fixed charge coverage ratio financial covenant.

 On August 3, 2023, the Company repaid the remaining outstanding balance of its Term Loans and recorded a loss on extinguishment of debt for the remaining unamortized debt issuance costs of $ 168,000 in the consolidated statement of operations.

 On December 12, 2023, the
 Company entered into an eighth amendment to the Credit Facility, which among other things, (i) extended the maturity date to December 12, 2028
 from May 28, 2026, (ii) amended the definition of "Applicable Margin" to provide for a pricing grid, with the Applicable Margin for Term
 SOFR loans ranging from 2.75 % to 3.25 %
 and the Applicable Margin for base rate loans ranging from 1.75 % to 2.25 %, in each case based on average daily undrawn availability for the most recently completed calendar quarter, (iii) amended the existing fixed charge coverage ratio financial
 covenant that is only tested if undrawn availability (which may include up to $ 8,000,000 of suppressed availability) is less than 22.5 % of the aggregate revolving commitments, and (iv) amended the definitions of Consolidated EBITDA and fixed charge coverage ratio and certain
 component definitions used therein.

 The Company had $ 128,000,000 and $ 145,200,000 outstanding under the Revolving Facility at March 31, 2024 and 2023, respectively. In addition, $ 6,370,000 was outstanding for letters of credit at March 31, 2024. At March 31, 2024, after certain contractual adjustments, $ 100,915,000 was available under the Revolving Facility. The interest rate on the Company's Revolving Facility was 8.43 % and 8.13 % at March 31, 2024 and 2023, respectively.

 In addition, the Credit Facility places limits on the Company's ability to incur liens, incur additional indebtedness, make loans and investments, engage in mergers and acquisitions, engage in asset
 sales, redeem, or repurchase capital stock, alter the business conducted by the Company and its subsidiaries, transact with affiliates, prepay, redeem, or purchase subordinated debt, and amend or otherwise alter debt agreements. The Credit
 Facility, as amended, requires the Company to maintain a minimum fixed charge coverage ratio if undrawn availability is less than 22.5 %
 of the aggregate revolving commitments and a specified minimum undrawn availability. During the period ended March 31, 2024, undrawn availability was greater than the 22.5 % threshold, therefore, the fixed charge coverage ratio financial covenant was not required to be tested.

 Convertible Notes

 On March 31, 2023, the
 Company entered into a note purchase agreement, as amended, (the "Note Purchase Agreement") with Bison Capital Partners VI, L.P. and Bison Capital Partners VI-A, L.P. (collectively, the "Purchasers") and Bison Capital Partners VI, L.P., as the
 purchaser representative (the "Purchaser Representative") for the issuance and sale of $ 32,000,000 in aggregate principal amount of
 convertible notes due in 2029 (the "Convertible Notes"), which was used for general corporate purposes. The Convertible Notes will bear interest at a rate of 10.0 % per annum, compounded annually, and payable (i) in kind or (ii) in cash, annually in arrears on April 1 of each year, commencing on April 1, 2024. On June 8, 2023, the Company entered
 into the first amendment to the Note Purchase Agreement, which among other things, removed a provision that specified the Purchasers would be entitled to receive a dividend or distribution payable in certain circumstances. This amendment was
 effective as of March 31, 2023. On August 1, 2023, the Company entered into the second amendment to the Note Purchase Agreement, which amended the definition of "Permitted Restricted Payments" to permit the prepayment of its Term Loans.

 The Company's Convertible Notes are comprised of the following:

 Principal amount of Convertible Notes

 $

 32,000,000

 $

 32,000,000

 Less: unamortized debt discount attributed to Compound Net Derivative Liability

 ( 7,576,000

)

 ( 8,430,000

)

 Less: unamortized debt discount attributed to debt issuance costs

 ( 1,058,000

)

 ( 1,006,000

)

 Carrying amount of the Convertible Notes

 23,366,000

 22,564,000

 Plus: Compound Net Derivative Liability

 7,410,000

 Net carrying amount of Convertible Notes, related party

 $

 30,776,000

 $

 30,994,000

 The aggregate proceeds
 from the offering were approximately $ 31,280,000, net of initial purchasers' fees and other related expenses. The initial conversion rate
 is 66.6667 shares of the Company's common stock per $ 1,000 principal amount of notes (equivalent to an initial conversion price of approximately $ 15.00
 per share of common stock). At March 31, 2024, the Company had 28,214,757 shares of its common stock available to be issued if the
 Convertible Notes were converted.

 In connection with the
 Note Purchase Agreement, the Company entered into common stock warrants (the "Warrants") with the Purchasers, which mature on March 30, 2029.
 The Warrants do not become exercisable unless a Company Redemption (as defined below) occurs and the volume weighted average price of the Company's common stock for 20 consecutive days prior to the redemption is less than $ 15.00. The fair
 value of the Warrants, using Level 3 inputs and the Monte Carlo simulation model, was zero at March 31, 2024 and 2023. The Company
 estimates the fair value of the Warrants at each balance sheet date. Any subsequent changes from the initial recognition in the fair value of the Warrants will be recorded in current period earnings in the consolidated statements of operations.

 The Convertible Notes
 may be converted, subject to certain conditions, at a conversion price of approximately $ 15.00 (the "Conversion Option"). The
 Convertible Notes also include a provision for a return of interest ("Return of Interest"), which requires the Purchasers to return 15.0 %
 of the interest paid to the Company in certain circumstances. The Return of Interest provision is accounted for as part of the Conversion Option and if the Conversion Option is exercised in the future, the Return of Interest provision will
 remain outstanding until the Purchaser sells all of the underlying stock received upon conversion. Upon conversion, any value associated with the Return of Interest provision will be reflected as a derivative asset upon conversion, with changes
 in fair value being recorded in earnings in the consolidated statements of operations until settlement in connection with the sale of the underlying stock by the Purchaser. Unless and until the Company delivers a redemption notice, the
 Purchasers of the Convertible Notes may convert their Convertible Notes at any time at their option. Upon conversion, the Convertible Notes will be settled in shares of the Company's common stock. The conversion rate and conversion price are
 subject to customary adjustments upon the occurrence of certain events. The Convertible Notes have a stated maturity of March 30, 2029,
 subject to earlier conversion or redemption in accordance with their terms.

 If there is a
 Fundamental Transaction, as defined in the Form of Convertible Promissory Note, the Company may redeem all or part of the Convertible Notes. Except in the case of the occurrence of a Fundamental Transaction, the Company may not redeem the
 Convertible Notes prior to March 31, 2026. After March 31, 2026, the Company may redeem all or part of the Convertible Notes for a cash purchase (the "Company Redemption") price equal to the redemption price plus $ 5,000,000, but only if (i) it is listed on a national exchange, (ii) there is no "Event of Default" occurring and continuing, and (iii) Adjusted
 EBITDA for the prior four quarters is greater than $ 80,000,000. The "Redemption Price" shall mean a cash amount equal to the
 principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest. However, if the volume weighted average price of the Company's common stock for 20 consecutive days prior to the notice of the Company Redemption is less than $ 15,
 the Purchasers may exercise the warrants and the Company will pay the Redemption Price plus $ 2,000,000.

 The Conversion
 Option and the Company Redemption both met the criteria for bifurcation from the Convertible Notes as derivatives and have been combined as a compound net derivative liability (the "Compound Net Derivative Liability"). The Compound Net
 Derivative Liability has been recorded within convertible note, related party in the consolidated balance sheets. The fair
 value of the Conversion Option and the Company Redemption option using Level 3 inputs and the Monte Carlo simulation model was a liability of $ 9,800,000
 and $ 10,400,000, and an asset of $ 2,390,000
 and $ 1,970,000 at March 31, 2024 and 2023, respectively. The Company estimates the fair value of the Compound Net Derivative
 Liability at each balance sheet date. Any subsequent changes from the initial recognition in the fair value of the Compound Net Derivative Liability will be recorded in current period earnings in the consolidated statements of operations.
 During the year ended March 31, 2024, the Company recorded a gain of $ 1,020,000 as the change in fair value of the Compound Net
 Derivative Liability in the consolidated statement of operations and consolidated statement of cash flows.

 The Convertible
 Notes also contain additional features, such as, default interest and options related to a Fundamental Transaction, requiring bifurcation which were not separately accounted for as the value of such features were not material at March 31,
 2024 and 2023. Any subsequent changes from the initial recognition in the fair value of those features will be recorded in current period earnings in the consolidated statements of operations.

 The
 Convertible Notes include customary provisions relating to the occurrence of Events of Default, which include the following: (i) certain payment defaults on the Convertible Notes (ii) certain events of bankruptcy, insolvency and
 reorganization involving the Company or any of its subsidiaries; (iii) the entering of one or more final judgments or orders against the Company or any of its subsidiaries for an aggregate payment exceeding $ 25,000,000; (iv) the acceleration of senior debt; (v) certain failures of the Company to comply with certain provisions of the Note Purchase
 Agreement or material breaches of the Note Purchase Agreement by the Company or any of its subsidiaries; (vi) any material provision of the Note Purchase Agreement, the Convertible Notes, the guarantee, the subordination agreement, the
 warrants or the registration rights agreement, for any reason, ceases to be valid and binding on the Company or any subsidiary, or any subsidiary shall so claim in writing to challenge the validity of or the Company's liability under
 the Note Purchase Agreement, the Convertible Notes, or the registration rights agreement; or (vii) the Company fails to maintain the listing of its capital stock on a national securities exchange. Events of Default will be subject to a
 30-day cure period except for those related to clause (ii) and (iv) of the preceding sentence.

 If an Event
 of Default occurs and is continuing, then, the Company shall deliver written notice to the Purchasers within 5 business
 days of first learning of such Event of Default. If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to its significant subsidiary) occurs, then the
 principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then outstanding will immediately become due and payable without any further action.

 Unamortized

 debt issuance costs of $ 1,058,000 and $ 1,006,000 are presented in the balance sheet as a direct deduction from the carrying amounts of the Convertible Notes at March 31, 2024 and 2023, respectively. Debt issuance costs are amortized
 using the effective interest method through the maturity of the Convertible Note and recorded in interest expense in the consolidated statements of opera tions. The effective interest rate was 18.3 % as of March 31, 2024. Debt issuance costs of $ 360,000 allocated to the Compound Net Derivative Liability were im mediately expensed to interest expense in the consolidated
 statements of operations for the year ended March 31, 2023.

 Additionally,

 pursuant to the Note Purchase Agreement, subject to certain conditions, the Purchaser Representative shall have the right to nominate one
 director to serve (the "Investor Director") on the Company's Board of Directors (the "Board"). If an Investor Director is not currently serving on the Board, and subject to certain other conditions set forth in the Note Purchase
 Agreement, the Purchaser Representative shall have the right to designate one person to have observation rights with
 respect to all meetings of the Board. In connection with the Company's entry into the Note Purchase Agreement, Douglas Trussler was appointed to serve on its Board.

 Interest expense related to the Convertible Notes is as follows:

 2024

 2023

 Contractual interest expense

 $

 3,200,000

 $

 9,000

 Accretion of debt discount

 853,000

 -

 Amortization of issuance costs

 119,000

 -

 Total interest expense

 $

 4,172,000

 $

 9,000

 There are no future payments
 required under the Convertible Notes prior to their maturity, therefore, the principal amount of the notes plus interest payable in kind, assuming no early redemption or conversion has occurred, of $ 56,704,000 would be paid on March 30, 2029.

 9. Contract Liabilities

 Contract liabilities are comprised of the following:

 Short-term contract liabilities

 Customer allowances earned

 $

 19,789,000

 $

 19,997,000

 Customer core returns accruals

 10,448,000

 11,112,000

 Accrued core payment

 3,476,000

 3,056,000

 Core bank liability

 1,739,000

 1,686,000

 Customer deposits

 1,735,000

 3,232,000

 Finished goods liabilities

 404,000

 1,257,000

 Total short-term contract liabilities

 $

 37,591,000

 $

 40,340,000

 Long-term contract liabilities

 Customer core returns accruals

 $

 193,545,000

 $

 170,420,000

 Core bank liability

 11,843,000

 13,582,000

 Accrued core payment

 6,535,000

 9,171,000

 Finished goods liabilities

 145,000

 433,000

 Total long-term contract liabilities

 $

 212,068,000

 $

 193,606,000

 10. Leases

 The Company leases various facilities in North America and Asia under operating leases expiring through August 2033. The Company also has finance leases for certain office
 and manufacturing equipment, which generally range from three to five years. The Company has material non-functional currency leases, which resulted in a remeasurement gains of $ 5,187,000, $ 6,515,000, and $ 1,989,000 during the years ended March 31, 2024, 2023, and 2022, respectively. These remeasurement gains are included in foreign exchange impact of lease liabilities and forward
 contracts in the consolidated statements of operations.

 Balance sheet information for leases is comprised of the following:

 Leases

 Classification

 Assets:

 Operating

 Operating lease assets

 $

 83,973,000

 $

 87,619,000

 Finance

 Plant and equipment

 4,611,000

 5,549,000

 Total leased assets

 $

 88,584,000

 $

 93,168,000

 Liabilities:

 Current

 Operating

 Operating lease liabilities

 $

 8,319,000

 $

 8,767,000

 Finance

 Other current liabilities

 1,585,000

 1,851,000

 Long-term

 Operating

 Long-term operating lease liabilities

 72,240,000

 79,318,000

 Finance

 Other liabilities

 1,893,000

 2,742,000

 Total lease liabilities

 $

 84,037,000

 $

 92,678,000

 Lease cost recognized in the consolidated statement of operations is comprised of the following:

 2024

 2023

 2022

 Lease cost

 Operating lease cost

 $

 15,047,000

 $

 13,176,000

 $

 12,472,000

 Short-term lease cost

 1,263,000

 1,686,000

 1,462,000

 Variable lease cost

 667,000

 761,000

 1,011,000

 Finance lease cost:

 Amortization of finance lease assets

 1,508,000

 1,983,000

 2,088,000

 Interest on finance lease liabilities

 219,000

 262,000

 345,000

 Total lease cost

 $

 18,704,000

 $

 17,868,000

 $

 17,378,000

 Maturities of lease commitments at March 31, 2024 were as follows:

 Maturity of lease liabilities by fiscal year

 Operating Leases

 Finance Leases

 Total

 2025

 $

 12,676,000

 $

 1,753,000

 $

 14,429,000

 2026

 12,374,000

 1,015,000

 13,389,000

 2027

 11,194,000

 524,000

 11,718,000

 2028

 10,928,000

 364,000

 11,292,000

 2029

 11,126,000

 169,000

 11,295,000

 Thereafter

 43,461,000

 -

 43,461,000

 Total lease payments

 101,759,000

 3,825,000

 105,584,000

 Less: amount representing interest

 ( 21,200,000

)

 ( 347,000

)

 ( 21,547,000

)

 Present value of lease liabilities

 $

 80,559,000

 $

 3,478,000

 $

 84,037,000

 Other information about leases is as follows:

 Lease term and discount rate

 Weighted-average remaining lease term (years):

 Finance leases

 2.8

 2.9

 Operating leases

 8.3

 9.0

 Weighted-average discount rate:

 Finance leases

 6.4

 %

 5.9

 %

 Operating leases

 5.8

 %

 5.8

 %

 11. Accounts Receivable Discount Programs

 The Company uses accounts receivable discount programs offered by certain customers and their respective banks. Under these accounts receivable
 discount programs, the Company may sell those customers' receivables to those banks at a discount to be agreed upon at the time the receivables are sold. These accounts receivable discount programs allow the Company to accelerate receipt of payment
 on customers' receivables.

 The following is a summary of the Company's accounts receivable discount programs:

 2024

 2023

 Receivables discounted

 $

 618,012,000

 $

 548,376,000

 Weighted average days

 Weighted average discount rate

 6.8

 %

 5.3

 %

 Amount of discount as interest expense

 $

 39,175,000

 $

 26,432,000

 12. Financial Risk Management and Derivatives

 Purchases and expenses denominated in currencies other than the U.S. dollar, which are primarily related to the Company's facilities overseas, expose
 the Company to market risk from material movements in foreign exchange rates between the U.S. dollar and the foreign currencies. The Company's primary risk exposure is from fluctuations in the value of the Mexican peso and to a lesser extent the
 Chinese yuan. To mitigate these risks, the Company enters into forward foreign currency exchange contracts to exchange U.S. dollars for these foreign currencies. The extent to which forward foreign currency exchange contracts are used is modified
 periodically in response to the Company's estimate of market conditions and the terms and length of anticipated requirements.

 The Company enters into forward foreign currency exchange contracts in order to reduce the impact of foreign currency fluctuations and not to engage in
 currency speculation. The use of derivative financial instruments allows the Company to reduce its exposure to the risk that the eventual cash outflow resulting from funding the expenses of the foreign operations will be materially affected by
 changes in exchange rates between the U.S. dollar and the foreign currencies. The Company does not hold or issue financial instruments for trading purposes. The forward foreign currency exchange contracts are designated for forecasted expenditure
 requirements to fund foreign operations.

 The Company had forward foreign currency exchange contracts with a U.S. dollar
 equivalent notional value of $54,092,000 and $48,486,000 at March 31, 2024 and 2023, respectively. These contracts
 generally have a term of one year or less, at
 rates agreed at the inception of the contracts. The counterparty to this derivative transaction is a major financial institution with investment grade credit rating; however, the Company is exposed to credit risk with this institution. The credit
 risk is limited to the potential unrealized gains (which offset currency fluctuations adverse to the Company) in any such contract should this counterparty fail to perform as contracted. Any changes in the fair values of forward foreign currency
 exchange contracts are included in foreign exchange impact of lease liabilities and forward contracts in the consolidated statements of operations.

 The following shows the effect of the Company's derivative instruments on its consolidated statements of operations:

 (Loss) Gain Recognized as Foreign Exchange Impact of Lease Liabilities and Forward Contracts

 Derivatives Not Designated as

 Hedging Instruments

 2024

 2023

 2022

 Forward foreign currency exchange contracts

 $

 ( 1,373,000

)

 $

 2,776,000

 $

 ( 316,000

)

 The fair value of the forward foreign currency exchange contracts of $ 2,516,000
 and $ 3,889,000 are included in prepaid and other current assets in the consolidated balance sheets at March 31, 2024 and 2023,
 respectively. The changes in the fair values of forward foreign currency exchange contracts are included in foreign exchange impact of lease liabilities and forward contracts in the consolidated statements of cash flows for the years ended March 31,
 2024, 2023, and 2022.

 13. Fair Value Measurements

 The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or
 most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses a three-tier valuation hierarchy based upon observable and unobservable inputs:

 •

 Level 1 — Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities.

 •

 Level 2 — Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or
 liability, either directly or indirectly, for substantially the full term of the financial instrument.

 •

 Level 3 — Valuation is based upon unobservable inputs that are significant to the fair value measurement.

 The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall
 into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a
 particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

 The following sets forth by level within the fair value hierarchy, the Company's financial assets and liabilities that were accounted for at fair value
 on a recurring basis according to the valuation techniques the Company used to determine their fair values at:

 Fair Value Measurements

 Fair Value Measurements

 Using Inputs Considered as

 Using Inputs Considered as

 Fair Value

 Level 1

 Level 2

 Level 3

 Fair Value

 Level 1

 Level 2

 Level 3

 Assets

 Short-term investments

 Mutual funds

 $

 $

 $

 -

 $

 -

 $

 $

 $

 -

 $

 -

 Prepaid expenses and other current assets

 Forward foreign currency exchange contracts

 2,516,000

 -

 2,516,000

 -

 3,889,000

 -

 3,889,000

 -

 Liabilities

 Other current liabilities

 Deferred compensation

 -

 -

 -

 -

 Convertible notes, related party

 Compound Net Derivative Liability

 7,410,000

 -

 -

 7,410,000

 -

 -

 Short-term Investments and Deferred Compensation

 The Company's short-term investments, which fund its deferred compensation liabilities, consist of investments in mutual funds. These investments are
 classified as Level 1 as the shares of these mutual funds trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis.

 Forward Foreign Currency Exchange Contracts

 The forward foreign currency exchange contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or
 foreign currency dealers (See Note 12).

 Compound Net Derivative Liability

 The Company estimates the fair value of the Compound Net Derivative Liability (see Note 8) using Level 3
 inputs and the Monte Carlo simulation model at the balance sheet date. The Monte Carlo simulation model requires the input of assumptions including the expected volatility of the underlying stock. These assumptions are based on both historical and
 other information. Changes in the values assumed and used in the model can materially affect the estimate of fair value. This amount is recorded within convertible notes, related party in the consolidated balance sheets at March 31, 2024 and 2023. Any changes in the fair value of the
 Compound Net Derivative Liability are recorded in change in fair value of compound net derivative liability in the consolidated statements of operations and in the consolidated statements of cash flows.

 The
 following assumptions were used to determine the fair value of the Compound Net Derivative Liability:

 Risk free interest rate

 4.36

 %

 3.64

 %

 Cost of equity

 23.20

 %

 21.80

 %

 Weighted average cost of capital

 14.90

 %

 14.60

 %

 Expected volatility of MPA common stock

 50.00

 %

 50.00

 %

 EBITDA volatility

 40.00

 %

 35.00

 %

 The following summarizes the activity for Level 3 fair value measurements:

 2024

 2023

 Beginning balance

 $

 $

 -

 Newly issued

 -

 Changes in the fair value of the Compound Net Derivative Liability included in earnings

 ( 1,020,000

)

 -

 Ending balance

 $

 7,410,000

 $

 During the years ended March 31, 2024 and 2023, the Company had no significant measurements of assets or liabilities at fair value on a nonrecurring
 basis subsequent to their initial recognition.

 The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to
 the short-term nature of these instruments. The carrying amounts of the revolving loan and other long-term liabilities approximate their fair value based on the variable nature of interest rates and current rates for instruments with similar
 characteristics. At March 31, 2024 and 2023, the net carrying amount of the Convertible Notes was $ 30,776,000 and $ 30,994,000, respectively, (see Note 8). The estimated fair value of the Company's Convertible Notes was $ 38,276,000 using Level 3 inputs at March 31, 2024. The net carrying amount of the Convertible Notes approximated their fair value at March 31, 2023, as they were issued on
 March 31, 2023.

 14. Commitments and Contingencies

 Warranty Returns

 The Company allows its customers to return goods that their consumers have returned to them, whether or not the returned item is defective ("warranty
 returns"). The Company accrues an estimate of its exposure to warranty returns based on a historical analysis of the level of this type of return as a percentage of total unit sales. Amounts charged to expense for these warranty returns are
 considered in arriving at the Company's net sales.

 The following summarizes the changes in the warranty return accrual:

 2024

 2023

 2022

 Balance at beginning of year

 $

 19,830,000

 $

 20,125,000

 $

 21,093,000

 Charged to expense

 142,240,000

 132,719,000

 118,675,000

 Amounts processed

 ( 142,744,000

)

 ( 133,014,000

)

 ( 119,643,000

)

 Balance at end of year

 $

 19,326,000

 $

 19,830,000

 $

 20,125,000

 At March 31, 2024 and 2023, the Company's total warranty return accrual was
 $ 19,326,000 and $ 19,830,000,
 respectively, of which $ 5,667,000 and $ 4,357,000,
 respectively, was included in the customer returns RGA issued within accounts receivable—net and $ 13,659,000 and $ 15,473,000, respectively, was included in the customer finished goods returns accrual in the consolidated balance sheets.

 Commitments to Provide Marketing Allowances under Long-Term Customer Contracts

 The Company has or is renegotiating long-term agreements with many of its major customers. Under these agreements, which in most cases have initial
 terms of at least four years, the Company is designated as the exclusive or primary supplier for specified categories of the Company's
 products. Because of the very competitive nature of the market and the limited number of customers for these products, the Company's customers have sought and obtained price concessions, significant marketing allowances, and more favorable delivery
 and payment terms in consideration for the Company's designation as a customer's exclusive or primary supplier. These incentives differ from contract to contract and can include (i) the issuance of a specified amount of credits against receivables in
 accordance with a schedule set forth in the relevant contract, (ii) support for a particular customer's research or marketing efforts provided on a scheduled basis, (iii) discounts granted in connection with each individual shipment of product, and
 (iv) other marketing, research, store expansion or product development support. These contracts typically require that the Company meet ongoing performance standards. While these longer-term agreements strengthen the Company's customer relationships,
 the increased demand for the Company's products often requires that the Company increase its inventories and personnel. Customer demands that the Company purchase their Remanufactured Core inventory also require the use of the Company's working
 capital.

 The marketing and other allowances the Company typically grants its customers in connection with its new or expanded customer relationships adversely
 impact the near-term revenues, profitability, and associated cash flows from these arrangements. Such allowances include sales incentives and concessions and typically consist of: (i) allowances which may only be applied against future purchases and
 are recorded as a reduction to revenues in accordance with a schedule set forth in the long-term contract, (ii) allowances related to a single exchange of product that are recorded as a reduction of revenues at the time the related revenues are
 recorded or when such incentives are offered, and (iii) amortization of core premiums paid to customers generally in connection with new business.

 The following summarizes the breakout of allowances discussed above, recorded as a reduction to revenues:

 2024

 2023

 2022

 Allowances incurred under long-term customer contracts

 $

 10,128,000

 $

 18,253,000

 $

 19,348,000

 Allowances related to a single exchange of product

 130,918,000

 154,194,000

 129,283,000

 Amortization of core premiums paid
 to customers

 10,181,000

 11,113,000

 11,242,000

 Total customer allowances recorded as a reduction of revenues

 $

 151,227,000

 $

 183,560,000

 $

 159,873,000

 The following presents the Company's commitments to incur allowances, excluding allowances related to a single exchange of product, which will be
 recognized as a reduction to revenue when the related revenue is recognized:

 Year Ending March 31,

 2025

 $

 14,701,000

 2026

 11,179,000

 2027

 10,300,000

 2028

 9,439,000

 2029

 5,650,000

 Thereafter

 2,826,000

 Total marketing allowances

 $

 54,095,000

 Contingencies

 The Company is subject to various lawsuits and claims. In addition, government agencies and self-regulatory organizations have the ability to conduct
 periodic examinations of and administrative proceedings regarding the Company's business, and its compliance with law, code, and regulations related to matters including, but not limited to,
 environmental, information security, taxes, levies, tariffs and such.

 15. Significant Customer and Other Information

 Significant Customer Concentrations

 While the Company continually seeks to diversify its customer base, it currently derives, and has historically derived, a substantial portion of its
 sales from a small number of large customers. Any meaningful reduction in the level of sales to any of these customers, deterioration of the financial condition of any of these customers or the loss of any of these customers could have a materially
 adverse impact on our business, results of operations, and financial condition. The Company's largest customers accounted for the following total percentage of net sales:

 2024

 2023

 2022

 Customer A

 %

 %

 %

 Customer C

 %

 %

 %

 Customer B

 %

 %

 %

 Customer D

 %

 %

 %

 Revenues for Customers A through C were derived from the Hard Parts segment and Test Solutions and Diagnostic Equipment segment. Revenues for Customer
 D were derived from the Hard Parts segment.

 The Company's largest customers accounted for the following total percentage of accounts receivable — trade:

 Customer A

 %

 %

 Customer B

 %

 %

 Customer C

 %

 %

 Customer D

 %

 %

 Geographic and Product Information

 The Company's products are predominantly sold in the U.S. and accounted for the following total percentage of net sales:

 2024

 2023

 2022

 Rotating electrical products

 %

 %

 %

 Brake-related products

 %

 %

 %

 Wheel hub products

 %

 %

 %

 Other products

 %

 %

 %

 %

 %

 %

 Significant Supplier Concentrations

 No suppliers accounted for more than 10% of the Company's inventory purchases for the years ended March 31, 2024, 2023, and 2022.

 16. Income Taxes

 Domestic and foreign components of (loss) income
 before income taxes are as follows:

 2024

 2023

 2022

 United States

 $

 ( 29,661,000

)

 $

 ( 14,470,000

)

 $

 6,021,000

 Foreign

 16,593,000

 11,361,000

 7,128,000

 (Loss) income before income taxes

 ( 13,068,000

)

 ( 3,109,000

)

 13,149,000

 The income tax expense is as follows:

 2024

 2023

 2022

 Current tax expense

 Federal

 $

 1,696,000

 $

 2,483,000

 $

 8,572,000

 State

 363,000

 396,000

 1,478,000

 Foreign

 4,553,000

 3,426,000

 3,180,000

 Total current tax expense

 6,612,000

 6,305,000

 13,230,000

 Deferred tax expense (benefit)

 Federal

 25,320,000

 ( 5,037,000

)

 ( 6,411,000

)

 State

 4,249,000

 ( 705,000

)

 ( 659,000

)

 Foreign

 ( 5,000

)

 535,000

 ( 372,000

)

 Total deferred tax expense (benefit)

 29,564,000

 ( 5,207,000

)

 ( 7,442,000

)

 Total income tax expense

 $

 36,176,000

 $

 1,098,000

 $

 5,788,000

 Deferred income taxes consist of the following:

 Assets

 Allowance for bad debts

 $

 44,000

 $

 78,000

 Customer allowances earned

 4,706,000

 4,760,000

 Allowance for stock adjustment returns

 3,620,000

 2,391,000

 Inventory adjustments

 7,419,000

 7,817,000

 Intangibles, net

 852,000

 809,000

 Stock options

 2,723,000

 2,770,000

 Operating lease liabilities

 21,251,000

 23,408,000

 Estimate for returns

 29,942,000

 26,670,000

 Accrued compensation

 2,600,000

 2,718,000

 Net operating losses

 4,670,000

 5,351,000

 Tax credits

 2,054,000

 2,012,000

 Capitalized research credits

 1,158,000

 -

 Plant and equipment, net

 1,010,000

 -

 Other

 6,588,000

 5,046,000

 Total deferred tax assets

 $

 88,637,000

 $

 83,830,000

 Liabilities

 Plant and equipment, net

 -

 ( 79,000

)

 Contract assets

 ( 10,265,000

)

 ( 12,357,000

)

 Operating lease assets

 ( 23,845,000

)

 ( 25,004,000

)

 Other

 ( 6,663,000

)

 ( 6,864,000

)

 Total deferred tax liabilities

 $

 ( 40,773,000

)

 $

 ( 44,304,000

)

 Less valuation allowance

 $

 ( 45,399,000

)

 $

 ( 7,619,000

)

 Total

 $

 2,465,000

 $

 31,907,000

 As of March 31, 2024, before tax effect, the Company had federal net operating loss carryforwards of $ 1,474,000 related to its January 2019 acquisition, state net operating loss carryforwards of $ 401,000 and foreign net operating loss carryforwards of $ 16,403,000. The federal net operating loss
 carryforwards expire beginning in fiscal year 2034, the state net operating loss carryforwards expire beginning in fiscal year 2033, and the foreign net operating loss carryforwards expire beginning in fiscal year 2038. As of March 31, 2024, the Company also had non-US tax credit carryforwards of $ 2,054,000,
 which will expire beginning in fiscal year 2034. A full valuation allowance was established on the federal and foreign net operating loss
 and tax credits carryforward as the Company believes it is more likely than not these tax attributes would not be realizable in the future. The net increase in the valuation allowance
 was $ 37,780,000 during the year ended March 31, 2024. One of the Company's Canadian subsidiaries currently has a valuation allowance of approximately $ 4,500,000. During the year ended March 31, 2024, this Canadian subsidiary experienced improved performance, which could result in a material reduction in the valuation allowance on its
 deferred tax assets in the next 12 months if this trend continues.

 Realization of deferred tax assets is dependent upon the Company's ability to generate sufficient future taxable income. Significant judgment is required in determining the
 Company's provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company's net deferred tax assets. The Company makes these estimates and judgments about its future taxable income that are
 based on assumptions that are consistent with the Company's future plans. A valuation allowance is established when the Company believes it is not more likely than not all or some deferred tax assets will be realized. In evaluating the Company's
 ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred
 tax liabilities, projected future taxable income, past financial performance, and tax planning strategies. Deferred tax assets arising primarily as a result of non-US net operating loss carry-forwards and non-US research and development
 credits in connection with the Company's Canadian operations have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. During the year
 ended March 31, 2024, the Company recorded a discrete non-cash valuation allowance of $ 38,009,000 on U.S. federal and various state
 deferred tax assets that is considered not more likely than not to be realized under U.S. GAAP.

 For the years ended March 31, 2024, 2023, and 2022, the primary components of the Company's income tax expense were (i) federal income taxes, (ii) state income taxes, (iii)
 foreign income taxed at rates that are different from the federal statutory rate, (iv) impact of the non-deductible executive compensation under Internal Revenue Code Section 162(m), and (v) change in valuation allowance. In addition, for the year ended March 31, 2024, the Company's income tax expense included the impact of an
 excess tax benefit from share-based compensation.

 The difference between the income tax expense at the federal statutory rate and the Company's effective tax rate is as follows:

 2024

 2023

 2022

 Statutory federal income tax rate

 21.0

 %

 21.0

 %

 21.0

 %

 State income tax rate, net of federal benefit

 10.8

 %

 3.5

 %

 4.1

 %

 Excess tax benefit from share-based compensation

 ( 4.8

)%

 -

 %

 -

 %

 Foreign income taxed at different rates

 ( 9.8

)%

 ( 28.7

)%

 4.9

 %

 Non-deductible executive compensation

 ( 2.6

)%

 ( 9.0

)%

 7.2

 %

 Change in valuation allowance

 ( 289.1

)%

 ( 25.8

)%

 5.0

 %

 Uncertain tax positions

 0.9

 %

 ( 1.0

)%

 6.1

 %

 Research and development credit

 0.7

 %

 2.7

 %

 ( 0.9

)%

 Net operating loss carryback

 -

 %

 -

 %

 ( 0.4

)%

 Other

 ( 3.9

)%

 2.0

 %

 ( 3.0

)%

 ( 276.8

)%

 ( 35.3

)%

 44.0

 %

 The Company and its subsidiaries file income tax returns for the U.S. federal, various state, and foreign jurisdictions with varying statutes of
 limitations. At March 31, 2024, the
 Company is under examination by the State of California for fiscal years ended March 31, 2020, 2021, and 2022
 and remains subject to examination from the fiscal years ended March 31, 2020 and forward. The Company believes no significant changes in the unrecognized tax benefits will occur within the next 12 months.

 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 2024

 2023

 2022

 Balance at beginning of period

 $

 1,964,000

 $

 1,975,000

 $

 1,104,000

 Additions based on tax positions related to the current year

 15,000

 53,000

 352,000

 Additions for tax positions of prior year

 15,000

 -

 581,000

 Reductions for tax positions of prior year

 ( 210,000

)

 ( 64,000

)

 ( 62,000

)

 Balance at end of period

 $

 1,784,000

 $

 1,964,000

 $

 1,975,000

 At March 31, 2024, 2023 and 2022, there are $ 1,475,000, $ 1,616,000, and $ 1,632,000, respectively, of
 unrecognized tax benefits that if recognized would affect the annual effective tax rate before the impact of changes in the valuation allowance.

 The Company recognizes interest and penalties related to unrecognized tax benefits as part of income tax expense. During the years ended March 31, 2024, 2023, and 2022, the
 Company recognized interest and penalties of approximately $ 21,000, $ 59,000, and $ 112,000, respectively. The Company had approximately $ 250,000 and $ 229,000 for the payment of
 interest and penalties accrued at March 31, 2024 and 2023, respectively.

 The Company intends to indefinitely reinvest its undistributed earnings from foreign subsidiaries in foreign operations, with the exception of earnings from its Singapore subsidiary. No incremental U.S. federal tax or withholding taxes have been provided for these earnings.

 17. Defined Contribution Plans

 The Company has a 401(k) retirement plan covering all employees who are 21 years of age with at least six months of service. The plan permits eligible
 employees to make contributions up to certain limitations, with the Company matching 50 % of each participating employee's contribution up
 to the first 6 % of employee compensation. Employees are immediately vested in their voluntary employee contributions and vest in the
 Company's matching contributions ratably over five years. During the year ended March 31, 2024, the Company's matching contributions under
 its 401(k) retirement plan were temporarily halted through February 2024 when they were reinstated. The Company's matching contribution to the 401(k) retirement plan was $ 148,000, $ 549,000, and $ 578,000 for the years ended March 31, 2024, 2023, and 2022, respectively.

 18. Share-based Payments

 2022 Incentive Award Plan (the "2022
 Plan")

 In September 2022, the Company's
 shareholders approved the 2022 Incentive Award Plan (the "2022 Plan"), which replaced the 2010 Incentive Award Plan and the 2014 Non-Employee Director Incentive Award Plan. Under the 2022 Plan, a total of 924,200 shares of the Company's common stock were reserved for grants to its employees, non-employee directors, and consultants. At March 31, 2024 there were (i) 132,133 options to purchase shares of common stock outstanding, (ii) 100,624 shares of restricted stock units outstanding, and (iii) 581,227 shares
 of performance stock units outstanding under the 2022 Plan. At March 31, 2023, there were 52,768 shares of restricted stock units
 outstanding under the 2022 Plan. There were 430,129 and 871,432 shares of common stock available for grant under the 2022 Plan at March 31, 2024 and 2023, respectively.

 2014 Non-Employee Director Incentive Award Plan

 At March 31, 2024 there were no restricted stock units outstanding under the 2014 Non-Employee Director Incentive Award Plan. At March 31, 2023, there were 10,417 restricted stock units outstanding under this plan. No shares of common stock remain available for grant under this plan.

 2010 Incentive Award Plan

 At March 31, 2024 and 2023, respectively, there were (i) 140,299
 and 266,169 shares of restricted stock units outstanding, (ii) 975,884 and 1,226,745 options to purchase shares of common stock outstanding,
 and (iii) 192,696 and 192,696
 shares of performance stock units outstanding under the 2010 Incentive Award Plan. In addition, at March 31, 2023, there were 100,000
 restricted shares outstanding. No shares of common stock remain available for grant under this plan.

 2004 Non-Employee Director Stock Option
 Plan

 In addition, at March 31, 2024, there were no options to
 purchase shares of common stock outstanding under the 2004 Non-Employee Director Stock Option Plan. At March 31, 2023, options to purchase 6,000
 shares of common stock were outstanding under the 2004 Non-Employee Director Stock Option Plan. No options remain available for grant
 under this plan.

 Stock Options

 The Company granted options to purchase 132,133
 shares of common stock during the year ended March 31, 2024. The Company did no t grant any stock options during the years ended
 March 31, 2023 and 2022. The following summarizes the Black-Scholes option-pricing model assumptions used to derive the weighted average fair value of the stock options granted
 during the year ended March 31, 2024.

 Year Ended March 31,

 2024

 Weighted average risk free interest rate

 4.53

 %

 Weighted average expected holding period (years)

 6.57

 Weighted average expected volatility

 51.29

 %

 Weighted average expected dividend yield

 -

 Weighted average fair value of options granted

 $

 3.75

 The following is a summary of stock option transactions:

 Number of

 Weighted Average

 Exercise Price

 Outstanding at March 31, 2023

 1,232,745

 $

 20.20

 Granted

 132,133

 $

 9.32

 Exercised

 -

 $

 -

 Forfeited/Cancelled

 ( 116,328

)

 $

 19.70

 Expired

 ( 140,533

)

 $

 9.66

 Outstanding at March 31, 2024

 1,108,017

 $

 20.29

 At March 31, 2024, options to purchase 132,133 shares of
 common stock were unvested at the weighted average exercise price of $ 9.32.

 Based on the market value of the Company's common stock at March 31, 2024, 2023, and 2022, the pre-tax intrinsic value of options exercised was $ 0, $ 2,427,000, and $ 245,000, respectively. The total fair value of stock options vested during the years ended March 31, 2024, 2023, and 2022 was $ 324,000, $ 1,140,000, and $ 2,174,000, respectively.

 The following summarizes information about the options outstanding at March 31, 2024:

 Options Outstanding

 Options Exercisable

 Remaining

 Aggregate

 Remaining

 Aggregate

 Range of

 Exercise

 Life

 Intrinsic

 Exercise

 Life

 Intrinsic

 Exercise price

 Price

 In Years

 Value

 Price

 In Years

 Value

 $

 9.32 to $ 17.38

 341,027

 $

 12.99

 7.43

 208,894

 $

 15.32

 6.14

 $

 19.00 to $ 22.73

 410,633

 19.58

 4.78

 410,633

 19.58

 4.78

 $

 22.93 to $ 27.40

 164,133

 26.35

 2.55

 164,133

 26.35

 2.55

 $

 28.68 to $ 31.13

 192,224

 29.60

 1.95

 192,224

 29.60

 1.95

 1,108,017

 $

 20.29

 4.77

 $

 -

 975,884

 $

 21.78

 4.14

 $

 -

 The aggregate intrinsic values in the above table represent the pre-tax value of all in-the-money options if all such options had been exercised on March 31, 2024 based on
 the Company's closing stock price of $ 8.04 as of that date.

 At March 31, 2024, there was $ 409,000 of total unrecognized
 compensation expense from stock-based compensation granted under the plans, which is related to non-vested shares. The compensation expense is expected to be recognized over a weighted average vesting period of 2.5 years.

 Restricted Stock Units and Restricted Stock (collectively "RSUs")

 During the year ended March 31, 2024, the Company granted 100,624
 of time-based vesting restricted stock units, based on the closing market price on the grant date. During the years ended March 31, 2023 and 2022, the Company granted (i) performance-based restricted stock awards which had a threshold performance
 level of 33,333 shares, a target performance level of 66,667 shares, and a maximum performance level of 100,000 shares at the
 grant date for both periods and (ii) 229,121 and 163,703 of time-based vesting restricted stock units, respectively. The estimated grant date fair value of the RSUs of $ 800,000, $ 4,430,000, and $ 5,775,000, for the years ended March 31, 2024, 2023, and 2022, respectively, was based on the closing market price on the date of grant. The fair value related to these awards is recognized as
 compensation expense over the vesting period. These awards generally vest in three equal installments beginning each anniversary from the
 grant date, subject to continued employment. Upon vesting, these awards may be net share settled to cover the required withholding tax with the remaining amount converted into an equivalent number of shares of common stock. Total shares withheld
 during the years ended March 31, 2024, 2023, and 2022 were 42,720, 74,854, and 84,762, respectively, based on the value of these awards as
 determined by the Company's closing stock price on the vesting date.

 The following is a summary of non-vested RSUs:

 Number of

 Weighted Average

 Grant Date Fair

 Value

 Outstanding at March 31, 2023

 429,354

 $

 15.07

 Granted

 100,624

 $

 7.95

 Vested

 ( 210,485

)

 $

 15.58

 Forfeited/Cancelled

 ( 78,570

)

 $

 13.28

 Outstanding at March 31, 2024

 240,923

 $

 12.23

 As of March 31, 2024, there was $ 1,435,000
 of unrecognized compensation expense related to these awards, which will be recognized over the remaining vesting period of approximately 0.9
 years.

 Performance Stock Units ("PSUs")

 During the year ended March 31, 2024, the Company granted 585,583 PSUs, which vest, subject to continued employment, as follows: (i) if the stock price is greater than or equal to $ 10.00 per share, then 1/3 of the grant will vest, (ii) if the stock price is greater than or equal to
 $ 15.00 per share then the next 1/3
 of the grant will vest, and (iii) if the stock price is greater than or equal to $ 20.00 per share then the final 1/3 of the grant will vest. Recipients are eligible to vest in between 50 % and 150 % of the third tranche by achieving a stock price between $ 17.50 and $ 25.00 per share (each stock
 price target must be met for thirty consecutive trading days). The Company calculated the fair value of these PSUs individually for each
 tranche using the Monte Carlo Simulation Model at the grant date. Compensation cost is recognized over the estimated derived service period. Compensation cost related to these awards will not be adjusted even if the market condition is not met.

 During the years ended March 31, 2023 and 2022, the Company granted 126,028 and 84,593 of performance-based PSUs (at target performance levels), respectively, to its
 executives, which typically cliff vest after three-years subject to continued employment. These awards are contingent and granted
 separately for each of the following metrics: adjusted EBITDA, net sales, and relative total shareholder return ("TSR"). Compensation cost is determined at the grant date and recognized on a straight-line basis over the requisite service period to
 the extent the conditions are deemed probable. The number of shares earned at the end of the three-year period will vary, based only on actual performance, from 0 % to 150 % of the target number of PSUs granted. Adjusted EBITDA and net sales are considered
 performance conditions. The Company will reassess the probability of achieving each performance condition separately each reporting period. TSR is considered a market condition because it measures the Company's return against the performance of the
 Russell 3000, excluding companies classified as financials and real estate, over a given period of time. Compensation cost related to the TSR award will not be adjusted even if the market condition is not met. The Company calculated the fair value
 of the PSUs for each component individually.

 The fair value of PSUs subject to performance conditions is equal to the closing stock price on the grant date. The fair value of PSUs subject to a
 market condition is determined using the Monte Carlo simulation model. The following table summarizes the assumptions used in determining the fair value of the awards subject to market conditions:

 Year Ended March 31,

 2024

 2023

 2022

 Risk free interest rate

 4.32 - 4.35

 %

 3.35

 %

 0.47

 %

 Expected life in years

 0.2 - 1.8

 Expected volatility of MPA common stock

 54.2 - 55.1

 %

 51.30

 %

 53.70

 %

 Expected average volatility of peer companies

 -

 %

 62.70

 %

 59.30

 %

 Average correlation coefficient of peer companies

 -

 %

 27.50

 26.70

 Expected dividend yield

 -

 -

 -

 Grant date fair value

 $

 3.57 - 8.37

 $

 16.02

 $

 26.89

 The following is a summary of non-vested PSUs:

 Number of

 Weighted Average

 Grant Date Fair

 Value

 Outstanding at March 31, 2023

 192,696

 $

 17.48

 Granted

 585,583

 $

 4.50

 Vested

 -

 $

 -

 Forfeited/Cancelled

 ( 4,356

)

 $

 5.79

 Outstanding at March 31, 2024

 773,923

 $

 7.73

 At March 31, 2024, there was $ 1,361,000
 of unrecognized compensation expense related to these awards, which will be recognized over the weighted average remaining vesting period of approximately 1.0
 year.

 19. Segment Information

 Pursuant to the guidance provided
 under the Financial Accounting Standards Board Accounting Standards Codification for segment reporting, the Company has identified its chief operating decision maker ("CODM"), reviewed the documents used by the CODM, and understands how such
 documents are used by the CODM to make financial and operating decisions. The Company has identified its Chief Executive Officer as the CODM. The criteria the Company used to identify the reportable segments are primarily the nature of the
 products the Company sells, the Company's organizational and management reporting structure, and the operating results that are regularly reviewed by the Company's CODM to make decisions about the resources to be allocated to the business units
 and to assess performance.

 The Company's three operating segments are:

 •

 Hard Parts, which includes (i) light duty rotating electric products such as alternators and starters, (ii) wheel hub products, (iii) brake-related products, including
 brake calipers, brake boosters, brake rotors, brake pads and brake master cylinders, and (iv) turbochargers,

 •

 Test Solutions and Diagnostic Equipment, which includes (i) applications for combustion engine vehicles, including bench-top testers for alternators and starters, (ii) equipment for the pre- and
 post-production of electric vehicles, and (iii) software emulation of power system applications for the electrification of all forms of transportation (including automobiles, trucks, the emerging electrification of systems within the
 aerospace industry, and electric vehicle charging stations), and

 •

 Heavy Duty, which includes non-discretionary automotive aftermarket replacement hard parts for heavy-duty truck, industrial, marine, and agricultural applications.

 The Company's Hard Parts operating segment
 meets the criteria of a reportable segment. The Test Solutions and Diagnostic Equipment and Heavy Duty segments are not material, are not required to be separately reported, and are included within the "all other" category.

 Financial information relating to the
 Company's segments is as follows:

 Hard Parts

 All Other

 Total

 Net sales to external customers

 $

 669,904,000

 $

 47,780,000

 $

 717,684,000

 Intersegment sales

 895,000

 407,000

 1,302,000

 Operating income (loss)

 48,500,000

 ( 2,431,000

)

 46,069,000

 10,371,000

 1,248,000

 11,619,000

 Segment assets

 1,019,811,000

 54,946,000

 1,074,757,000

 Capital expenditures

 621,000

 379,000

 1,000,000

 Hard Parts

 All Other

 Total

 Net sales to external customers

 $

 638,460,000

 $

 44,614,000

 $

 683,074,000

 Intersegment sales

 600,000

 192,000

 792,000

 Operating income (loss)

 44,855,000

 ( 8,303,000

)

 36,552,000

 10,955,000

 1,489,000

 12,444,000

 Segment assets

 1,032,739,000

 49,778,000

 1,082,517,000

 Capital expenditures

 3,459,000

 742,000

 4,201,000

 March 31, 2022

 Hard Parts

 All Other

 Total

 Net sales to external customers

 $

 609,992,000

 $

 40,316,000

 $

 650,308,000

 Intersegment sales

 831,000

 2,502,000

 3,333,000

 Operating income (loss)

 32,265,000

 ( 3,544,000

)

 28,721,000

 11,345,000

 1,541,000

 12,886,000

 Capital expenditures

 6,630,000

 920,000

 7,550,000

 Net sales

 March 31, 2022

 Total net sales for reportable segment

 $

 670,799,000

 $

 639,060,000

 $

 610,823,000

 Other net sales

 48,187,000

 44,806,000

 42,818,000

 Elimination of intersegment net sales

 ( 1,302,000

)

 ( 792,000

)

 ( 3,333,000

)

 Total consolidated net sales

 $

 717,684,000

 $

 683,074,000

 $

 650,308,000

 Profit or loss

 March 31, 2022

 Total operating income for reportable segment

 $

 48,500,000

 $

 44,855,000

 $

 32,265,000

 Other operating loss

 ( 2,431,000

)

 ( 8,303,000

)

 ( 3,544,000

)

 Elimination of intersegment operating income (loss)

 51,000

 ( 106,000

)

 ( 17,000

)

 Interest expense, net

 ( 60,040,000

)

 ( 39,555,000

)

 ( 15,555,000

)

 Change in fair value of compound net derivative liability

 1,020,000

 -

 -

 Loss on extinguishment of debt

 ( 168,000

)

 -

 -

 Total consolidated (loss) income before income tax expense

 $

 ( 13,068,000

)

 $

 ( 3,109,000

)

 $

 13,149,000

 Assets

 Total assets for reportable segment

 $

 1,019,811,000

 $

 1,032,739,000

 Other assets

 54,946,000

 49,778,000

 Elimination of intersegment assets

 ( 62,755,000

)

 ( 53,952,000

)

 Total consolidated assets

 $

 1,012,002,000

 $

 1,028,565,000

 20. Share Repurchase Program

 In August 2018, the Company's board of directors approved an increase in its share repurchase program from $ 20,000,000 to $ 37,000,000 of its common stock. During the years
 ended March 31, 2024 and 2023 the Company did no t repurchase any shares of its common stock. During the year ended March 31, 2022, the
 Company repurchased 106,486 shares of its common stock for $ 1,914,000. As of March 31, 2024, $ 18,745,000 was utilized and $ 18,255,000 remains available to repurchase shares under the authorized share repurchase program, subject to the limit in the Company's Credit Facility.
 The Company retired the 837,007 shares repurchased under this program through March 31, 2024. The Company's share repurchase program does
 not obligate it to acquire any specific number of shares and shares may be repurchased in privately negotiated and/or open market transactions.

 21. Related Party Transactions

 Lease

 In December 2022, the Company entered into an operating lease for its 35,000 square foot manufacturing, warehouse, and office facility in Ontario, Canada, with a company co-owned by a member of management. The lease, which commenced January 1,
 2023, has an initial term of one year with a base rent of approximately $ 27,000 per month and includes options to renew for up to four years. In
 November 2023, the Company exercised one of these options to renew for an additional one-year period. The rent expense recorded for the
 related party lease was $ 328,000 and $ 82,000
 for the years ended March 31, 2024 and 2023, respectively.

 Convertible Note and Election of New Director

 On March 31, 2023, the Company entered
 into the Note Purchase Agreement with Bison Capital Partners VI, L.P. and Bison Capital Partners VI-A, L.P., and Bison Capital Partners VI, L.P. as the Purchaser Representative, for the issuance and sale of the Convertible Notes. In connection
 with the issuance of the Convertible Notes and at the recommendation of the Nominating and Corporate Governance Committee of the Board and in connection with the bylaws of the Company, the Board appointed Douglas Trussler, a co-founder of Bison
 Capital in 2001, to the Board, effective immediately, to serve until the Company's 2024 Annual Meeting of Stockholders and until his successor is duly elected and qualified. Mr. Trussler's compensation will be consistent with the Company's
 previously disclosed standard compensation practices for non-employee directors, which are described in the Company's Definitive Proxy Statement, filed with the SEC on July 29, 2022. There are no other transactions between Mr. Trussler and the
 Company that would be reportable under Item 404(a) of Regulation S-K.

 Schedule II — Valuation and Qualifying Accounts

 Accounts Receivable — Allowance for credit losses

 Charge to

 (recovery of)

 Years Ended

 beginning of

 bad debts

 Amounts

 end of

 March 31,

 Description

 year

 expense

 written off

 year

 2024

 Allowance for credit losses

 $

 339,000

 $

 ( 133,000)

 $

 17,000

 $

 189,000

 2023

 Allowance for credit losses

 $

 375,000

 $

 108,000

 $

 144,000

 $

 339,000

 2022

 Allowance for credit losses

 $

 348,000

 $

 95,000

 $

 68,000

 $

 375,000

 Accounts Receivable — Allowance for customer-payment discrepancies

 Charge to

 Years Ended

 beginning of

 discrepancies

 Amounts

 end of

 March 31,

 Description

 year

 expense

 Processed

 year

 2024

 Allowance for customer-payment discrepancies

 $

 1,634,000

 $

 1,452,000

 $

 1,880,000

 $

 1,206,000

 2023

 Allowance for customer-payment discrepancies

 $

 1,375,000

 $

 2,112,000

 $

 1,853,000

 $

 1,634,000

 2022

 Allowance for customer-payment discrepancies

 $

 752,000

 $

 2,142,000

 $

 1,519,000

 $

 1,375,000

 Inventory — Allowance for excess and obsolete inventory

 Provision for

 excess and

 Years Ended

 beginning of

 obsolete

 Amounts

 end of

 March 31,

 Description

 year

 inventory

 written off

 year

 2024

 A llowance for excess and obsolete inventory

 $

 16,436,000

 $

 16,233,000

 $

 15,297,000

 $

 17,372,000

 2023

 Allowance for excess and obsolete inventory

 $

 13,520,000

 $

 18,851,000

 $

 15,935,000

 $

 16,436,000

 2022

 Allowance for excess and obsolete inventory

 $

 13,246,000

 $

 13,504,000

 $

 13,230,000

 $

 13,520,000

 Deferred Tax Assets — Valuation allowance for deferred tax assets

 Charge to

 Years Ended

 beginning of

 income tax

 Charged to

 end of

 March 31,

 Description

 year

 expense

 Other Accounts

 year

 2024

 Valuation allowance for deferred tax assets

 $

 7,619,000

 $

 37,780,000

 $

 -

 $

 45,399,000

 2023

 Valuation allowance for deferred tax assets

 $

 6,816,000

 $

 803,000

 $

 -

 $

 7,619,000

 2022

 Valuation allowance for deferred tax assets

 $

 6,163,000

 $

 653,000

 $

 -

 $

 6,816,000

 S-1