Exhibit 1.01

 

 

Introduction

 

Exhibit 1.01

MOTORCAR PARTS OF AMERICA, INC.

Conflict Minerals Report

For The Year Ended December 31, 2025

This Conflict Minerals Report for Motorcar Parts of America, Inc. and its subsidiaries (the “Company,” “MPA,” “we,” or “us”) covers the reporting period from January 1, 2025, to December 31, 2025, and is presented in accordance with the Securities Exchange Act of 1934, Rule 13p-1 (the “Rule”) and the requirements of Form SD.

 

The Rule implements reporting and disclosure requirements as directed by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”) related to conflict minerals (as defined in the Act). The Rule imposes certain reporting obligations on SEC registrants whose products contain conflict minerals which are necessary to the functionality or production of their products.

 

This Conflict Minerals Report is filed as Exhibit 1.01 to our Specialized Disclosure Report on Form SD and is also posted on the MPA Corporate website under Governance.

 

 

MPA is a leading manufacturer, remanufacturer, and distributor of aftermarket automotive parts for import and domestic cars, light trucks, heavy duty, agricultural and industrial applications. Our products include (i) rotating electrical products such as alternators and starters, (ii) wheel hub assemblies and bearings, (iii) brake calipers and master cylinders, and (iv) other products which include brake power boosters, rotors, drums & pads. Our report also includes applicable and similar Heavy-Duty products by our Dixie Electric line, as well as our D&V Electronics Testers.

 

Our supply chain consists of many tiers. First, tier suppliers are those suppliers with whom we have a direct business relationship. There may be several tiers in the supply chain between our first-tier suppliers and mine.

 

Conflict Minerals Program

 

To determine if we manufacture or contract to manufacture products that may contain Tin, Tantalum, Tungsten or Gold (3TG or “conflict minerals”), we review our volume of first tier (i.e., direct) suppliers and product lines to see who may use conflict minerals in their products or finished goods, by confirmation or CMRT request. Of the scope where the supplier base may contain 3TG minerals, we had a 92% response rate, and 33% confirmed no applicability.

 

We spoke with our product engineers and/or used the International Material Data System (IMDS) database, as applicable. IMDS is the automotive industry’s material data system. It is a computer-based data system used primarily by automakers and Original Equipment Manufacturers (OEM) to manage regulatory material compliance of vehicles and vehicle parts.

 

Based on this internal assessment of our product materials, we concluded that Tin, Tantalum, Tungsten and/or Gold may be present in some of the products we manufacture (or remanufacture), or contract to manufacture, and may be necessary to their functionality. Applicable products include starters, alternators, armatures, rectifiers, regulators, and solenoids. Other applicable items within these products that may contain conflict minerals are brushes, diodes, slip rings, bushings, electronics transistors, solder wire, bonding wire, and electronic radial lead caps.

 

Conflict minerals are present in very small quantities, with Tin being the conflict mineral included in more products than any other.

 

Solenoids contain a combined average weight of approximately 12.1% Tin.

 

Rectifiers, including assemblies and capacitors, contain a combined average weight of approximately 12.11% Tin, and with very small traces of Gold with less than .01%.

 

Regulators contain a combined average weight of approximately 11.64 % for Tin.

 

Regulator Assemblies also contain a trace combined average amount of Tantalum and Tungsten, with reported combined weight of less than 0.01%, and traces of Gold approximately 1.61%.

 

Armatures contain a trace amount of Tin .03%; Starters contain Tin & Tantalum with Tin being .22% and Tantalum is very small trace amounts.

 

Alternators contain Tin, Gold & Tantalum with the latter two being very small trace amounts and Tin being less than the combined average weight of .03%.

 

The starters, alternators, armatures, rectifiers, regulators, and solenoids we purchase are not specially manufactured to our specifications but rather purchased as stock items. Often Tin, a conflict mineral, is a component of these purchased items, and sometimes Tantalum, Tungsten and Gold may be included. In our experience, the most common place where conflict minerals appears is in the solder, which makes up a very small portion of the product.

 

 

MPA performed an internal assessment of its supply chain to identify those suppliers of products that contain or may contain conflict minerals. Although many of our suppliers and their sub-tier suppliers are not directly subject to the same conflict mineral laws and regulations, we nevertheless surveyed these suppliers with the expectation that they would in turn survey their direct suppliers, and so on, all the way down through the manufacturing supply chain to the processing facilities and mines. We did this to determine whether any of the necessary conflict minerals in our products originated in the Democratic Republic of Congo (DRC) or an adjoining country (as defined in the Act) or were from recycled or scrap sources. We identified thirty-three first tier suppliers of alternators, starters, armatures, rectifiers, regulators, and solenoids, or electronic test devices.

 

As a result of these efforts, MPA concluded that it is possible that some of the 3TG in products we manufacture, remanufacture, or contract to manufacture could originate from Covered Countries. Pursuant to the Rule, MPA therefore undertook due diligence measures on the source and chain of custody of these conflict minerals.

 

Due Diligence

 

 

3.1.5.      Report Findings to Senior Management. We periodically reported information on the status of our conflict minerals program, including the source of conflict minerals in our supply chain to senior management and the Audit Committee of our Board of Directors.

 

3.2.         OECD Step 2—Identify and Assess Risk in the Supply Chain.

 

3.2.1.      Identify Risk in the Supply Chain. To identify risks in our supply chain, we require our direct suppliers to provide supply chain information using the CMRT on the necessary conflict minerals in their supply chain. We also asked our direct suppliers to confirm in a separate letter that the supplier has completed the CMRT to the “best of its knowledge and in good faith”, including obtaining such CMRTs from its sub-tier suppliers.

 

3.2.2.      Assess Risk in the Supply Chain.

 

3.2.2.1.   Assess Product Reporting Risk. For most of our suppliers, we purchase only a few of the products they manufacture or contract to manufacture. As such, we recognize there is a risk that we can receive information on smelters or refiners in companywide CMRTs that include many smelters and refiners that are not in the supply chain for the products we manufacture or contract to manufacture. This presents a risk of compiling inaccurate information on the Tin, Tantalum, Tungsten and Gold smelters and refiners in our supply chain. We requested that suppliers provide us with a CMRT that included only the products we purchase, or some other user-defined scope that reduces the likelihood and extent of irrelevant or inaccurate smelters and refiner information.

 

3.2.2.2.   Assess Smelters and Refiners Reporting Risk. Upon receipt of a CMRT from a supplier, we reviewed the responses for completeness, logic, and reasonableness. For example, we checked suppliers’ CMRTs to make sure they had included smelters or refiners for the conflict minerals we know to be in the products we purchase from them.   We evaluated suppliers’ responses against the AIAG Guide for Reporting criteria. In accordance with these criteria, we requested additional information for suppliers’ responses considered incomplete, inconsistent, or nonresponsive, with the goal of obtaining a complete list of all processing facilities and mines, inclusive of their countries or location of origin.

 

3.2.2.3.   Assess Supply Chain Reporting Risk. We recognize that a company’s awareness of the conflict minerals issue, and commitment to a conflict-free supply chain are components of our ability to obtain meaningful information, and to pursue a conflict-free supply chain. As a mechanism to identify and assess the risk of lack of awareness or inattention to conflict minerals, we checked the websites for many of our key suppliers to determine if they have conflict minerals policies. We reviewed these policies to check whether they require their own suppliers to pursue conflict-free suppliers for 3TG, and/ or whether they have implemented due diligence on the sourcing of their 3TG.

 

3.2.2.4.   Assess Conflict Free Status Reporting Risk. The Company continued to receive supply chain responses through February 2026, for CY25. We compared the supplier’s list of smelters or refiners with those on the RMI Responsible Minerals Initiative list, we did this because the list not only indicates the smelter’s conformant status but also confirms if the entity is a valid smelter.

 

Determination

 

Of the 245 unique smelters or refiners 209 or 85% of them are listed as Compliant or “Conformant” on the RMI Responsible Minerals or CFSI Initiatives for Tin, Tantalum, Tungsten and Gold.

 

Four or 1.63% smelters or refiners for Tin, Tantalum and Gold are in the process of being validated through the audit process as considered “Active.” Twenty-six or 11% are considered “Eligible” on the Standard list provided by RMI and 6 or 2.45% are considered “neither” Conformant nor Active at this time.

 

We have not been able to ascertain the status of the remaining 6 or 2.45% of the smelters or refiners currently considered as “neither” Conformant nor Active. Of the six considered as “neither” all six are Tin.

 

Moreover, 85% of our suppliers’ responses have provided smelter and refinery information at a company level. Because we purchase only a very few products from the range of items they manufacture, we are not able to determine the source of Tin, Tantalum, Tungsten or Gold in the products we purchase from these suppliers.

 

Based on our efforts, we are unable to determine origin of all the Tin, Tantalum, Tungsten and Gold used in Company Products. Despite our efforts regarding RCOI and due diligence, we are unable to conclude with certainty the origin of the conflict minerals contained in the products we manufacture, remanufacture, and contract to manufacture, or procure via distributors. We have not concluded that we manufacture or contract to manufacture products that are DRC Conflict Free. Accordingly, we are not required by the Rule to obtain, and have not obtained, an independent private sector audit.

 

Moving Forward

 

Forward Looking Statements. This Report contains forward-looking statements regarding our business, products, and conflict minerals efforts, including steps we intend to take to mitigate the risk that conflict minerals in our products benefit armed groups, and our industry’s conflict minerals efforts. Words such as “expects,” “anticipates,” “intends,” “believes” and similar expressions or variations of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements in this Report. Additionally, statements concerning future matters that are not historical are forward-looking statements.

 

Although forward-looking statements in this Report reflect our good faith judgment, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward- looking statements. Factors that could cause or contribute to such differences in results and outcomes include without limitation the risk that information reported to us by our direct suppliers or industry information used by us may be inaccurate; the risk that processing facilities may not participate in the RMI; Responsible Minerals Initiative, as well as risks discussed under the heading “Risk Factors” in our most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K related to, among other things, our dependence on our suppliers and our being subject to government regulations and policies. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. We undertake no obligation to revise or update any forward- looking statements to reflect any event or circumstance that may arise after the date of this Report. Throughout this Report, whenever a reference is made to our website, such reference does not incorporate information from the website by reference into this Report unless specifically identified.

 

1 The LBMA and RJC manage auditing programs for gold refiners.