Motorcar Parts of America Inc. (Nasdaq: MPAA) received a notice from the NASDAQ Stock Market on Nov. 15 indicating that the company is not in compliance with NASDAQ listing rules. The company’s Form 10-Q for its fiscal 2019 second quarter, which ended Sept. 30, was not timely filed, according to NASDAQ. The notice, which the company expected, was issued in accordance with standard NASDAQ procedures as a result of the delayed filing.
The delay in filing is due to Motorcar Parts of America’s inability to timely process the financial information for its fiscal 2019 second quarter, which is primarily related to a review of accounting practices associated with the timing of recognizing certain expenses incurred in connection with new business, according to the company. These expenses are primarily allowances for core inventory purchase obligations at the start of a new business relationship.
The company stated that it does not believe this review of the accounting for new business contracts will affect its liquidity, operations or strong growth momentum. Motorcar Parts of America continues to focus significant efforts on completing the processing of this information and expects to file its Form 10-Q for the fiscal 2019 second quarter as soon as practicable, according to the company.
Upon completion of these filings, Motorcar Parts of America will be current in its financial reporting.
The NASDAQ notice directs the company to submit a plan by Jan. 14. The company expects to address the notice by filing its Form 10-Q and submitting a required updated compliance plan within that timeframe.