UQM TECHNOLOGIES INC (Form: 10-Q, Received: 07/30/2015 16:04:55)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X] Quarterly Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 201 5

[ ] Transition Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from _____ to _____

Commission File Number 1-10869

UQM TECHNOLOGIES, INC.

(Exact name of registrant, as specified in its charter)

Colorado

(State or other jurisdiction of

incorporation or organization)

84-0579156

(I.R.S. Employer

Identification No.)

4120 Specialty Place, Longmont, Colorado 80504

(Address of principal executive offices) (Zip code)

(303) 682-4900

(Registrant’s telephone number, including area code)

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 X No .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes X No Not Applicable .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):


[ ] Large accelerated filer	[ ] Accelerated filer	[ X ] Non-accelerated filer	[ ] Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes No X .

The number of shares outstanding (including shares held by affiliates) of the registrant’s common stock, par value $0.01 per share at July 28 , 2015 was 40, 541 , 847 .

TABLE OF CONTENTS


	Page No.
PART I Financial Information	1

Item 1. Financial Statements	1

Consolidated Condensed Balance Sheets as of June 30, 2015 and March 31, 2015	1

Consolidated Condensed Statements of Operations for the quarters ended June 30, 201 5 and 201 4	3

Consolidated Condensed Statements of Cash Flows for the quarters ended June 30, 201 5 and 201 4	4

Notes to Consolidated Condensed Financial Statements	5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3. Quantitative and Qualitative Disclosures About Market Risk	16

Item 4. Controls and Procedures	16

PART I I Other Information	17

Item 1. Legal Proceedings	17

Item 1A. Risk Factors	17

Item 5. Other Information	18

Item 6. Exhibits	18

Part I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Condensed Balance Sheets


	June 30, 2015		March 31, 2015
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	5,626,817	$	6,585,703
Accounts receivable		414,861		522,417
Other receivable		-		855,000
Costs and estimated earnings in excess of billings on
uncompleted contracts		69,917		49,917
Inventories		9,374,848		9,354,053
Prepaid expenses and other current assets		335,414		266,448
Total current assets		15,821,857		17,633,538

Property and equipment, at cost:
Land		1,683,330		1,683,330
Building		4,516,301		4,516,301
Machinery and equipment		7,083,950		7,037,200
		13,283,581		13,236,831
Less accumulated depreciation		(6,664,667)		(6,410,242)
Net property and equipment		6,618,914		6,826,589

Patent costs, net of accumulated amortization of $898,2 92 and $895,227 , respectively		238,430		239,043

Trademark costs, net of accumulated amortization of $74,048 and $73,018 , respectively		101,793		102,823
Total assets	$	22,780,994	$	24,801,993

See accompanying notes to consolidated condensed financial statements.

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UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Condensed Balance Sheets, Continued


	June 30, 2015		March 31, 2015
	(unaudited)
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	497,043	$	398,568
Other current liabilities		1,464,540		1,544,971
Billings in excess of costs and estimated earnings on
uncompleted contracts		83,591		84,444
Total current liabilities		2,045,174		2,027,983

Other long-term liabilities		470,080		445,024

Total liabilities		2,515,254		2,473,007

Commitments and contingencies

Stockholders’ equity:
Common stock, $0.01 par value, 50,000,000 shares
authorized; 40,052,602 and 39,999,984 shares
issued and outstanding , respectively		400,526		400,000
Additional paid-in capital		122,026,540		121,866,061
Accumulated deficit		(102,161,326)		(99,937,075)
Total stockholders’ equity		20,265,740		22,328,986

Total liabilities and stockholders’ equity	$	22,780,994	$	24,801,993

See accompanying notes to consolidated condensed financial statements.

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UQM TECHNOLOGIES , INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Operations (unaudited)


	Quarter Ended June 30,
	2015		2014
Revenue:
Product sales	$	630,666	$	823,032
Contract services		109,863		196,516
		740,529		1,019,548
Operating costs and expenses:
Costs of product sales		577,446		464,028
Costs of contract services		64,798		148,234
Research and development		1,088,480		84,404
Production engineering		-		1,227,191
Reimbursement of costs under DOE grant		-		(716,014)
Selling, general and administrative		1,245,374		1,128,531
		2,976,098		2,336,374

Loss before other income		(2,235,569)		(1,316,826)

Other income:
Interest income		3,372		6,789
Other		7,946		-
		11,318		6,789

Net loss	$	(2,224,251)	$	(1,310,037)

Net loss per common share - basic and
diluted	$	(0.06)	$	(0.03)
Weighted average number of shares of common
stock outstanding - basic and diluted		40,040,673		39,788,769

See accompanying notes to consolidated condensed financial statements.

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UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows (unaudited)


	Quarter Ended June 30,
	2015		2014
Cash flows from operating activities:
Net loss	$	(2,224,251)	$	(1,310,037)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		258,520		260,484
Non-cash equity based compensation		139,288		166,658
Change in operating assets and liabilities:
Accounts receivable		107,556		(30,067)
Other receivable		855,000		-
Costs and estimated earnings on uncompleted contracts		(20,000)		194,020
Inventories		(20,795)		114,413
Prepaid expenses and other current assets		(68,966)		(224,137)
Accounts payable and other current liabilities		18,044		(82,240)
Billings in excess of costs and estimated earnings on
uncompleted contracts		(853)		-
Other long-term liabilities		25,056		24,736
Net cash used in operating activities		(931,401)		(886,170)

Cash flows from investing activities:
Increase in short-term investments		-		(153)
Acquisition of property and equipment		(46,750)		(45,458)
Property and equipment reimbursements received from DOE under
grant		-		123,470
Increase in patent and trademark costs		(2,452)		(6,444)
Net cash (used in) provided by investing activities		(49,202)		71,415

Cash flows from financing activities:
Issuance of common stock under employee stock purchase plan		23,125		22,055
Issuance of common stock upon exercise of employee options		-		4,497
Cash paid for retirement of vested shares		(1,408)		-
Net cash provided by financing activities		21,717		26,552

Decrease in cash and cash equivalents		(958,886)		(788,203)
Cash and cash equivalents at beginning of quarter		6,585,703		10,247,112
Cash and cash equivalents at end of quarter	$	5,626,817	$	9,458,909

See accompanying notes to consolidated condensed financial statements.

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UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(unaudited)

(1)

Basis of Presentation

The accompanying consolidated condensed financial statements are unaudited; however, in the opinion of management, all adjustments, which were solely of a normal recurring nature, necessary to a fair presentation of the results for the interim periods, have been made. The results for the interim periods are not necessarily indicative of the results to be expected for the fiscal year. The Notes contained herein should be read in conjunction with the Notes to our Consolidated Financial Statements filed on Form 10-K for the fiscal year ended March 31, 2015.

(2) New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for public entities for interim and annual reporting periods beginning after December 15, 2016 . On July 9, 2015, the FASB deferred the effective date of this new standard to December 15, 2017 for public entities. Early application is permitted, but not before interim and annual reporting periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We are in the process of determining the impact on our financial statements.

In August 2014, the FASB issued guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new guidance applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We expect the new standard to increase the disclosures we provide regarding our liquidity and cash obligations.

(3) Contracts in Process

At June 30, 2015 and March 31, 2015, the estimated period to complete contracts in process ranged from one to seven months and one to eighteen months, respectively. We expect to collect all accounts receivable arising from these contracts within sixty days of billing.

The following summarizes contracts in process:


	June 30, 2015		March 31, 2015
Costs incurred on uncompleted contracts	$	2,389,461	$	2,327,816
Estimated earnings		709,989		626,075
		3,099,450		2,953,891
Less billings to date		(3,113,124)		(2,988,418)

Contracts in process	$	(13,674)	$	(34,527)

Included in the accompanying consolidated condensed balance sheets as follows:

Costs and estimated earnings in excess of billings
on uncompleted contracts	$	69,917	$	49,917
Billings in excess of costs and estimated earnings
on uncompleted contracts		(83,591)		(84,444)
Contracts in process	$	(13,674)	$	(34,527)

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements, Continued

(unaudited)

(4) Inventories

Inventories at June 30, 2015 and March 31, 2015 consisted of:


	June 30, 2015		March 31, 2015
Raw materials	$	7,261,536	$	7,261,568
Work-in-process		63,385		25,842
Finished products		2,049,927		2,066,643
	$	9,374,848	$	9,354,053

We maintain raw material inventories of electronic components, motor parts and other materials to meet our expected manufacturing needs for proprietary products and for products manufactured to the design specifications of our customers. Some of these components may become obsolete or impaired due to bulk purchases in excess of customer requirements. Accordingly, we periodically assesses our raw material and finished product inventor ies for potential impairment of value based on then available information, expectations and estimates and establish impairment reserves as appropriate. We concluded that there were no impairments for obsolete inventory during the three month periods ended June 30, 2015 and 2014.

(5 ) Government Grant

We ha d a grant (the “Grant”) with the DOE under the American Recovery and Reinvestment Act , which ended on January 12, 2015 . The Grant provide d funds to facilitate the manufacture and deployment of electric drive vehicles, batteries and electric drive vehicle components in the United States. Under the terms of the Grant , the DOE reimburse d us for 50 percent of qualifying costs for the purchase of facilities, tooling and manufacturing equipment, and for engineering related to product qualification and testing of our electric propulsion systems. Engineering costs that were incurred under the Grant were classified in our consolidated condensed statements of operations as production engineering.

With the expiration of the Grant, we launched and re-deployed resources from production engineering activities to several new internally funded projects aimed at developing and significantly improving our product portfolio. This led to a significant increase in research and development expenditures in the first quarter of fiscal year 2016 compared to the same quarter last year, and we expect those resources to continue to be deployed on similar research and development activities in the future.

The Grant wa s also subject to our compliance with certain reporting requirements. The American Recovery and Reinvestment Act impose d minimum construction wages and labor standards for projects funded by the Grant. If we dispose of assets acquired using Grant funding, we may be required to reimburse the DOE upon such sale date if the fair value of the asset on the date of disposition exceeds $ 5,000 . The amount of any such reimbursement shall be equal to 50 percent of the fair value of the asset on the date of disposition.

The application of grant funds to eligible capital asset purchases as of the end of the Grant are as follows:



	Purchase Cost		Grant Funding		Recorded Value
Land	$	896,388	$	448,194	$	448,194
Building		9,906,736		4,953,368		4,953,368
Machinery and Equipment		8,462,961		4,231,480		4,231,481
	$	19,266,085	$	9,633,042	$	9,633,043

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements, Continued

(unaudited)

( 6 ) Other Current Liabilities

Other current liabilities at June 30, 2015 and March 31, 2015 consist of:


	June 30, 2015		March 31, 2015
Accrued payroll and employee benefits	$	155,045	$	183,245
Accrued personal property and real estate taxes		124,932		208,162
Accrued warranty costs		182,913		184,920
Unearned revenue		71,098		37,000
Accrued royalties		48,336		48,336
Accrued import duties		87,100		87,100
Accrued vendor settlements		774,974		774,974
Other		20,142		21,234
	$	1,464,540	$	1,544,971

( 7 ) Stock-Based Compensation

Share-Based Compensation Expense

The table below shows total share-based compensation expense for the quarters ended June 30, 2015 and 2014 and the classification of these expenses:


	Quarter Ended June 30,
	2015		2014
Costs of contract services	$	746	$	1,732
Costs of product sales		5,619		6,912
Research and development		14,281		2,246
Production engineering		-		33,544
Selling, general and administrative		118,642		122,224
	$	139,288	$	166,658

Stock Option Plans Activity

Additional information with respect to stock option activity during the quarter ended June 30, 2015 under our Stock Option Plans is as follows:


				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2015	2,969,075	$	1.79		5.5 years	$	311,101
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	(39,604)	$	3.89

Outstanding at June 30, 2015	2,929,471	$	1.76		5.4 years	$	22,124

Exercisable at June 30, 2015	2,365,021	$	1.87		4.4 years	$	21,330

Vested and expected to vest at June 30, 2015	2,909,043	$	1.77		5.3 years	$	22,076

As of June 30, 2015, there was $ 243,062 of total unrecognized compensation costs related to stock options granted under our Stock Option Plans. The unrecognized compensation cost is expected to be recognized over a weighted-average period of thirteen months. The total fair value of stock options that vested during both quarters ended June 30, 2015 and 2014 was $7,690.

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements, Continued

(unaudited)

Stock Bonus Plan Activity

Activity with respect to non-vested shares under the Stock Bonus Plan as of June 30, 2015 and 2014 and changes during the quarters ended June 30, 2015 and 2014 are presented below:


	Quarter Ended June 30, 2015			Quarter Ended June 30, 2014
		Weighted-Average			Weighted-Average
	Shares Under	Grant Date		Shares Under	Grant Date
	Contract	Fair Value		Contract	Fair Value
Non-vested at April 1	432,039	$	1.26	640,979	$	1.17
Granted	-	$	-	-	$	-
Vested	(3,667)	$	0.69	(3,666)	$	0.69
Forfeited	-	$	-	-	$	-
Non-vested at June 30	428,372	$	1.26	637,313	$	1.17

As of June 30, 2015, there was $ 268,739 of total unrecognized compensation costs related to common stock granted under our Stock Bonus Plan. The unrecognized compensation cost at June 30, 2015 is expected to be recognized over a weighted-average period of thirteen months.

Stock Purchase Plan Activity

During the quarters ended June 30, 2015 and 2014, we issued 34,508 and 12,052 shares of common stock, respectively, under the Stock Purchase Plan. Cash received by us upon the purchase of shares under the Stock Purchase Plan for the quarters ended June 30, 2015 and 2014 was $23,125 and $22,055 , respectively.

( 8 ) Stockholders’ Equity

Changes in the components of stockholders’ equity during the quarter ended June 30, 2015 were as follows:


	Number of
	common				Additional				Total
	shares		Common		paid-in		Accumulated		stockholders’
	issued		stock		capital		deficit		equity
Balances at April 1, 2015		39,999,984	$	400,000	$	121,866,061	$	(99,937,075)	$	22,328,986

Issuance of common stock under
employee stock purchase plan		34,508		345		22,780		-		23,125
Issuance of common stock under
stock bonus plan		19,478		195		(195)		-		-
Retirement of vested shares		(1,368)		(14)		(1,394)		-		(1,408)
Compensation expense from
employee and director stock
option and common stock grants		-		-		139,288		-		139,288
Net loss		-		-		-		(2,224,251)		(2,224,251)
Balances at June 30, 2015		40,052,602	$	400,526	$	122,026,540	$	(102,161,326)	$	20,265,740

In February 2014, we completed a follow-on offering consisting of 2,864,872 shares of our common stock, and common stock purchase warrants to purchase 1,432,436 shares of our common stock. The warrants have an exercise price of $2.1275 per whole share of common stock and are exercisable on or after August 6, 2014 and on or before August 5, 2018. In addition, the placement agent was issued warrants to purchase 57,297 shares of common stock, on substantially the same terms as the warrants issued to the purchasers. Warrants to acquire 1,489,733 shares of our common stock were outstanding at both June 30, 2015 and March 31, 2015.

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements, Continued

(unaudited)

(9 ) Significant Customers

We have historically derived significant revenue from a few key customers. The following table summarizes revenue and percent of total revenue from significant customers for the quarters ended June 30, 2015 and 2014:


	Quarter Ended June 30,
	2015				2014
Customer A	$	201,157	27	%	$	-	-	%
Customer B	$	150,316	20	%	$	154,443	15	%
Customer C	$	121,682	16	%	$	94,474	9	%
Customer D	$	34,863	5	%	$	196,516	19	%
Customer E	$	560	-	%	$	115,770	11	%

The following table summarizes accounts receivable from significant customers as of June 30, 201 5 and March 31, 201 5 :


	June 30, 2015		March 31, 2015
Customer A	39	%	-	%
Customer B	10	%	24	%
Customer C	6	%	11	%
Customer D	21	%	-	%
Customer E	-	%	1	%

(1 0 ) Income Taxes

The Company currently has a full valuation allowance against its deferred tax assets, as it is management’s judgment that it is more-likely-than-not that net deferred tax assets will not be realized to reduce future taxable income.

We recognize interest and penalties related to uncertain tax positions in “Other Income (expense),” net. As of June 30, 2015 and 2014, we had no provisions for interest or penalties related to uncertain tax positions.

The tax years 1999 through 2014 remain open to examination by both the Internal Revenue Service of the United States and by the various state taxing authorities where we file.

(1 1 ) Loss Per Common Share

The following table sets forth the computation of basic and diluted net loss per share for the quarters ended June 30, 2015 and 2014:


	Quarter Ended June 30,
	2015		2014
Numerator:
Net loss	$	(2,224,251)	$	(1,310,037)
Denominator for basic and diluted net loss per common
share:
Weighted average number of shares of common
stock outstanding - basic and diluted		40,040,673		39,788,769


Net loss per common share - basic and diluted	$	(0.06)	$	(0.03)

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements, Continued

(unaudited)

The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each quarter presented:


	June 30,
	2015		2014

Non-vested stock bonus plan shares		428,372		637,313
Stock options outstanding		2,954,330		3,335,091
Warrants to purchase common stock		1,489,733		1,489,733

(1 2 ) Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these instruments.

(13) Commitments and Contingencies

Employment Agreements

The Company has employment agreements with four of its officers for a term expiring on August 31, 2015. The aggregate future base salary payable to the executive officers over their remaining terms is $ 209,180 . In addition, we have recorded a liability of $ 298,414 and $ 268,357 at June 30, 2015 and March 31, 2015, respectively, representing the potential future compensation payable under the retirement and voluntary termination provisions of the employment agreements of the Company’s current officers. The value of the liability was determined using a discounted cash flow model with a discount rate of 14 percent, which is based on the expected cost of capital for the Company. A 1 percent change in this discount rate would result in approximately a $1,000 change in the recorded value of the liability as of June 30, 2015. The employment agreements provide for severance payments under the conditions and for the amounts specified in the agreements.

Litigation

We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, and based on current available information, the ultimate disposition of these matters is not expected to have a material adverse effect on our financial position, results of operations or cash flow, although adverse developments in these matters could have a material impact on a future reporting period.

(1 4 ) Subsequent Event

On July 21, 2015, the Company announced that its board of directors ha d removed Eric Ridenour as President and Chief Executive of the Company, effective July 20, 2015 . As a result, the Company became obligated to pay Mr. Ridenour one year’s salary in the amount of $460,410 . This payment will be made in two equal installments during the second and fourth quarters of the current fiscal year.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Report contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements appear in a number of places in this Report and include statements regarding our plans, beliefs or current expectations; including those plans, beliefs and expectations of our officers and directors with respect to, among other things, new product developments, future orders to be received from our customers, sales of products from inventory, future financial results, liquidity and the continued growth of the electric-powered vehicle industry. Important Risk Factors that could cause actual results to differ from those contained in the forward-looking statements are listed below in Part II, Item 1A. Risk Factors and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015.

Introduction

UQM Technologies, Inc., (“UQM”, “Company”, “we”, “our”, or “us”) is a developer and manufacturer of power dense, high efficiency electric motors, generators, power electronic controllers and fuel cell compressors for the commercial truck, bus, automotive, marine, military and industrial markets. We generate revenue from two principal activities: 1) the sale of motors, generators , electronic controls and fuel cell compressors ; and 2) research, development and application engineering contract services. Our product sales consist of annually recurring volume production, prototype low volume sales, and revenues derived from the sale of refurbished and serviced products. The sources of engineering revenue typically vary from year to year and individual projects may vary substantially in their periods of performance and aggregate dollar value.

We have invested considerable financial and human resources into the development of our technology and manufacturing operations. We have developed and production-validated a full range of products for use in full-electric, hybrid electric, plug-in-hybrid and fuel cell applications for the markets we serve. These products are all highly efficient permanent magnet designs and feature outstanding performance, package size and weight valued by our customers. Our production capabilities and capacity are sufficient to meet the demands of our current and future customers for the foreseeable future. We are certified as an ISO/TS 16949 quality supplier, which is the highest level of quality standards in the automotive industry, and we are ISO 14001 certified, meeting the highest environmental standards. We have a management team with significant experience in the automotive industry and the requirements for high quality production programs and very deep technical knowledge of the motor and controller business. This team has the ability and background to grow the business to significantly higher levels, and we believe we have adequate cash balances to fund our operations for at least the twelve months.

Our most important strategic initiative going forward is to develop customer relationships that lead to longer-term supply contracts. Volume production is the key to our ongoing operations. We are driving business development in the following ways:

We have created a well-defined, structured process to target potential customers of vehicle electric motor technology in the commercial truck/van and shuttles, passenger buses, automotive, marine, military and other targeted markets both domestically and internationally.

We have developed a customer pipeline where identified potential customers are synergistic and strategic in nature for longer-term growth potential.

We are building long term quantifiable and sustainable relationships within the identified target markets.

We provide service and support to our customers from pilot and test activities through commissioning processes and then ultimately to volume production operations.

We continually look for ways to improve our purchasing and manufacturing processes to develop competitive costs to ensure that our pricing to customers is market competitive.

We provide customized solutions to meet specification requirements that some customers require.

We participate in trade show events globally to demonstrate our products and engage with users of electric motor technology.

We actively involve all functional groups within the Company to support the requests of our customers.

We believe that the successful execution of these activities will lead us to secure volume production commitments from customers, so that our operations will become cash flow positive and ultimately profitable.

The Department of Energy grant that was awarded to us in 2010 expired on January 12, 2015. Since the beginning of the grant program, we were reimbursed a total of $27.1 million. These cumulative reimbursements allowed us to achieve many milestones to support our business development efforts that we believe will lead to volume production opportunities. Specifically, we were able to relocate our headquarters and production operations to an approximate 130,000 square foot facility with fifteen adjacent acres of land for future expansion. Within this modern facility, we were able to develop and install manufacturing capacity and infrastructure to build and test our state-of-the-art traction motors and controllers. We have installed a flexible manufacturing footprint that allows us to build both the large and smaller frame size motors and controllers at production capacity levels consistent with the growth targets of our current and potential customers. Throughout the program, the DOE grant supported product validation and release activities for both passenger vehicle and heavy duty truck and bus platforms. In addition, the grant assisted us in implementing all of the required processes and systems to certify our facility to the ISO/TS 16949 quality standard that is a requirement to be a supplier to the automotive industry.

The funding from the DOE grant brought us to a position of strength with regards to product validation and manufacturing capabilities. This, in addition to the business development activities in place and the cash reserves we have to fund the operations for at least the next twelve months, makes us optimistic about the future of the Company.

Financial Condition

Cash and cash equivalents at June 30, 201 5 were $ 5,626,817 and working capital was $ 13,7 76,683 , compared with $ 6 ,585,703 and $ 15,605,555 , respectively, at March 31, 201 5 . The decrease in cash and working capital is primarily attributable to operating losses.

Accounts receivable decreased $ 107,556 to $ 414,861 at June 30, 201 5 from $ 522,417 at March 31, 201 5 . The decrease is primarily due to decreased levels of product sales in the first quarter this fiscal year versus the fourth quarter last fiscal year . Our sales are conducted through acceptance of customer purchase orders or in some ca ses through supply agreements. For international customers and customers without an adequate credit rating or history, our typical terms are irrevocable letter of credit or cash payment in advance of delivery. For credit qualified customers, our typical terms are net 30 days. As of June 30, 201 5 and March 31, 201 5 , we had no allowance for bad debts.

Other receiv able decreased to zero at June 30, 2015 from $855,000 at March 31, 2015 resulting from insurance proceeds received in the quarter under a key-man life insurance policy .

Costs and estimated earnings on uncompleted contracts was $ 6 9,917 at June 30, 201 5 versus $49,917 at March 31, 201 5 . The increase was due to timing of billings on certain contracts in process at June 30, 2015 versus March 31, 2015.

Invent ories in creased $ 20,795 to $ 9,374,848 at June 30, 201 5 reflecting an increase in work in process inventory on-hand at June 30, 2015 .

Prepaid expenses and other current assets increased to $ 335,414 at June 30, 201 5 from $ 266,448 at March 31, 201 5 primarily due to prepayments on commercial insurance policies.

We invested $ 46,750 for the acquisition of property and equipment during the quarter ended June 30, 2015 compared to $ 45,458 during the comparable quarter last fiscal year. Cash reimbursements for capital assets under the DOE Grant for the quarter ended June 30, 201 5 and June 30, 201 4 were zero and $ 123,470 .

Patent costs de creased $613 and trademark costs decreased $1,030 primarily due to amortization.

Accounts payable in creased $ 98,47 5 to $ 497,043 at June 30, 201 5 from $ 398,568 at March 31, 201 5 , primarily due to the timing of vendor payments.

Other current liabilities decreased to $ 1,464,540 at June 30, 201 5 from $ 1,544,971 at March 31, 201 5 . The decrease is primarily attributable to reduced levels of accrued personal property taxes at June 30, 201 5 due to the timing of property tax payments .

Billings in excess of costs and estimated earnings on uncompleted contracts de creased slightly to $ 83,591 at June 30, 2015 versus $84,444 at March 31, 2015. The de crease is due to timing of billings on certain contracts in process at June 30, 2015 versus March 31, 2015.

C ommon stock and additional paid-in capital were $ 400,526 and $ 122,026,540 , respectively, at June 30, 201 5 compared to $ 400,000 and $ 121,866,061 at March 31, 201 5 . The increases in common stock and additional paid-in capital were primarily attributable to the periodic expensing of non-cash share-based payments associated with option grants under our equity incentive plan and the issuance of shares under the Employee Stock Purchase Plan.

Results of Operations

Quarter Ended June 30, 201 5

Rev enue

Product revenue for the first quarter decreased to $630,666 versus $823,032 for the comparable quarter last fiscal year. The decrease is primarily due to decreased shipments of PowerPhase HD ® and PowerPhase Pro ® propulsion systems. In general, product sales were down in the quarter due to several factors, including the current low fuel prices and some fleets still delaying placing new orders.

Revenue from contract services decreased to $ 109,863 at June 30, 201 5 v ersu s $ 196,516 fo r the comparable quarter last year. The decrease is primarily due to decreased levels of customer funded research activities, which vary from quarter to quarter.

G ross Profit Margin

Gross profit margins for the quarter ended June 30, 201 5 de creased to 13.3 percent compared to 40 .0 percent for the quarter ended June 30, 201 4 . Gross profit margin on product sales for the first quarter this year de creased to 8.4 percent compared to 43.6 percent for the first quarter last year due to decreased overhead absorption as a result of lower volumes shipped during the current quarter. Gross profit margin on contract services was 41.0 percent for the first quarter this fiscal year compared to 24.6 percent for the quarter ended June 30, 201 4 . The in crease is primarily due to a change in the mix of contracts in process during the quarter ended June 30, 201 5 versus the comparable quarter last fiscal year.

C osts and Expenses

Research and development expenditures for the quarter ended June 30, 201 5 increased to $ 1,088,480 compared to $ 84,404 for the quarter ended June 30, 201 4. Coincident with the contractual end of the DOE Grant on January 12, 2015, we launched and re-deployed resources to several new internally funded projects aimed at developing and significantly improving our product portfolio. This reallocation of expenses from production engineering to research and development led to the significant increase in research and development expenditures for the first quarter this fiscal year.

Production engineering costs were zero for the first quarter versus $1, 227,191 for the first quarter last fiscal year. With the expiration of the Grant, in the first quarter of fiscal year 2016 we re-deployed resources from production engineering activities to several new internally funded research and development activities.

Reimbursement of product qualification and testing costs under the DOE Grant was zero for the quarter ended June 30, 201 5 versus $ 716,014 for the comparable quarter last fiscal year. The reduction is attributable to the contractual expiration of the Grant.

Selling, general and administrative expense for the quarter ended June 30, 201 5 was $ 1,245,374 compared to $1, 128,531 f or the same quarter last year. The in crease is primarily attributable to a n increase in legal and business development expenses for the current quarter.

Other

Interest income de creased to $ 3,37 2 for the quarter ended June 30, 201 5 versus $ 6,789 for the same quarter last fiscal year. The de crease is attributable to lower invested balances.

Net Loss

As a result, net loss for the quarter ended June 30, 201 5 was $ 2, 224,251 , or $ 0.06 per common share, compared to a net loss of $ 1,310,037 , or $0.0 3 per common share for the quarter ended June 30, 201 4 .

Liquidity and Capital Resources

Our cash balances and liquidity throughout the quarter ended June 30, 201 5 were adequate to meet operating needs. At June 30, 201 5 , we had working capital of $ 13,7 76,683 compared to $ 15,605,555 at March 31, 201 5 .

For the quarter ended June 30, 201 5 , net cash used in operating activities was $ 931,401 compared to net cash used in o perating activities of $ 886,170 for the comparable quarter last fiscal year. The increase in cash used for the first quarter this fiscal year is primarily attributable to increased net losses partially offset by a the collection of the key-man life insurance receivable of $855,000 .

Net cash used in investing activities for the first quarter was $ 49,202 compared to cash provided by investing activities of $ 71,415 for the comparable quarter last fiscal year. The decrease for the quarter ended June 30, 201 5 was primarily due to no DOE reimbursements for property and equipment purchases due to the expiration of the Grant.

Net cash provided by financing activities for the first quarter was $ 21,717 compared to net cash provided by financing activities of $ 26,552 for the comparable quarter last fiscal year. The de crease in cash provided was primarily attributable to low er levels of cash proceeds from employee stock option exercises.

W e expect to fund our operations over the next year from existing cash and cash equivalent balances, the reduction of inventories and from debt financing, if available. Although we expect to manage our operations and working capital requirements to minimize the future level of operating losses and working capital usage, our working capital requirements may increase in the future. If customer demand accelerates substantially, our working capital requirements may also increase substantially.

If our existing financial resources are not sufficient to execute our business plan, we may issue equity or debt securities in the future, although we cannot assure that we will be able to secure additional capital should it be required to implement our current business plan. In the event financing or equity capital to fund future growth is not available on terms acceptable to us, or at all, we will modify our strategy to align our operations with then available financial resources. Based on our current level of operations, we believe we have sufficient cash and short-term investments to fund our operations for at least the next twelve months .

Contractual Obligations

The following table presents information about our contractual obligations and commitments as of June 30, 201 5 :


				Payments due by Period
			Less Than						More than
	Total		1 Year		2 - 3 Years		4 - 5 Years		5 Years
Purchase obligations	$	439,418		439,418		-		-		-
Executive employment agreements (1)		298,414		-		-		-		298,414
Total	$	737,832		439,418		-		-		298,414



(1)	Includes severance pay obligations under executive employment agreements contingently payable upon six months’ notice by executive officers of the Company, but not annual cash compensation under the agreements. This is reflected in other long-term liabilities in the accompanying Consolidated Balance Sheets because no executives are expected to retire within the next twelve months.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the dollar values reported in the consolidated financial statements and accompanying notes. Note 1 to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015 describes the significant accounting policies and methods used in the preparation of the consolidated financial statements.

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ITEM 3 . QUA NTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange and interest rates. We do not use financial instruments to any degree to manage these risks and do not hold or issue financial instruments for trading purposes. All of our product sales, and related receivables are payable in U.S. dollars.

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ITEM 4 . CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed with the Securities and Exchange Commission (“SEC”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Interim Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

As of June 30, 201 5 , we performed an evaluation under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the U.S. Securities and Exchange Act of 1934). Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of June 30, 201 5 .

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II-OTHER INFORMATION

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ITEM 1 . LEGAL PROCEEDINGS

Litigation

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ITEM 1A . RISK FACTORS

Risk Factors

Our business is subject to a number of risks and uncertainties, many of which are outside of our control. Except as indicated below, there have been no material changes in the risk factors contained in our A nnual R eport on Form 10-K for the fiscal year ended March 31, 201 5 :

We have incurred significant losses and may continue to do so.

We have incurred significant net losses as shown in the following tables:


	Three Months Ended		Fiscal Year Ended March 31,
	June 30, 2015		2015		2014		2013

Net loss	$	2,224,251	$	5,988,530	$	2,773,244	$	10,688,312

As of June 30, 201 5 and March 31, 201 5 we had accumulated deficit s of $ 102, 161,326 and $ 9 9,937,075 , respectively .

In the future, we plan to make additional investments in product development, facilities and equipment and other costs related to the commercialization of our products. As a result, we expect to continue to incur net losses for the foreseeable future .

Our operating losses, anticipated capital expenditures and working capital requirements in the longer term may exceed our current cash balances .

Our net loss for the quarter ended June 30, 201 5 was $ 2,2 24,251 versus a net loss for the comparable quarter last fiscal year of $ 1,310,037 . Our net loss for the fiscal year ended March 31, 201 5 was $ 5,988,530 versus a net loss for the fiscal years ended March 31, 201 4 and 20 1 3 of $ 2,773,244 and $ 10,688,312 respectively. At June 30 , 201 5 , our cash and cash equivalents totaled $ 5,626,817 . We expect our losses to continue for the foreseeable future. Our existing cash resources, together with cash generated from reductions in our inventories of PowerPhase Pro ® propulsion systems, are expected to be sufficient to complete our business plan for at least the next twelve months . Should those resources be insufficient, we may need to secure additional debt or equity funding, which may not be available on terms acceptable to us, if at all .

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ITEM 5. OTHER INFORMATION

On July 24, 2015, Eric Ridenour resigned from the Company’s board of directors. Mr. Ridenour did not have any disagreement with the Company on any matter related to its operations, policies or practices. Mr. Ridenour served as the Company’s President and Chief Executive Officer until July 20, 2015.

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ITEM 6. EXHIBITS

(a)

Exhibits

10.1 Employment Agreement dated July 20, 2015, between the Company and Joseph R. Mitchell

10.2 Employment Agreement dated July 20, 2015, between the Company and David I. Rosenthal

10.3 Employment Agreement dated July 20, 2015, between the Company and Adrian P. Shaffer

10.4 Employment Agreement dated July 20, 2015, between the Company and Josh M. Ley

31.1 Certification of Chief Executive Officer

31.2 Certification of Chief Financial Officer

32.1 Certification pursuant to 18 U.S.C. S ection 1350, as adopted pursuant to S ection 906 of the Sarbanes-Oxley Act of 2002


	SIGNATURES

Pursuant to the requirements 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.



		UQM Technologies, Inc.
		Registrant
Date: July 30 , 2015
	/s/ David I. Rosenthal
	David I. Rosenthal
	Treasurer
	(Principal Financial and
	Accounting Officer)

Exhibit 10.1

UQM TECHNOLOGIES, INC.
EMPLOYMENT AGREEMENT

THIS AGREEMENT date d as of July 20 , 201 5 , is between UQM Technologies, Inc., a Colorado corp oration ( “ Employer ” ), and Joseph R. Mitchell ( “ Executive ” ).

Recitals

A. Executive and Employer are currently parties to an Employment Agreement, dated April 30, 2013 (the “Prior Agreement”).

B. By its terms, the Prior Agreement will expire on August 31, 2015.

C. Employer and Executive wish to enter into a new employment agreement to extend the term of Executive’s employment and to provide for a retention bonus .

Agreement

In consideration of the mutual promises, covenants and conditions hereinafter set forth, Employer and Executive agree as follows:

1. New Agreement . This Agreement replaces the Prior Agreement, which is hereby terminated, and shall govern the terms of Executive's employment from the date above through the term specified in Section 5.

2. Employment . Employer hereby agrees to employ Executive as its Chief Operating Officer for the term of employment set forth herein, and Executive hereby accepts such employment, all upon the terms and conditions hereinafter set forth. Executive shall also have the additional responsibilities of interim Chief Executive Officer and President for such period as determined by Employer’s board of directors.

3. Duties . Executive shall perform the duties assigned to him by the Chief Executive Officer, subject to the control, supervision and direction of the Chief Executive Officer. In his role as Interim Chief Executive Officer and President he shall perform the duties assigned to him by Employer’s board of directors, with John Sztykiel acting as the primary liaison between Executive and the board of directors. Executive shall be furnished with appropriate office space, secretarial assistance, and such other facilities and services as are suitable to Executive's position and adequate for the performance of Executive's duties.

4. Executive's Performance . During the term of Executive's employment under this Agreement, Executive shall devote Executive's best efforts and full working time and attention exclusively to the performance of the duties hereunder and to promoting and furthering the business of Employer, and shall not, during the term of employment, be engaged in any other business activity for personal pecuniary advantage without the approval of the Board of Directors. This Section shall not be construed as preventing Executive from investing Executive's assets in such form or manner as will not require any services on the part of Executive in the operation of the affairs of the companies in which such investments are made, subject to the provisions of Section 1 2 hereof. Notwithstanding the foregoing, Executive may

perform and assume other activities and obligations as the Board of Directors shall from time to time approve.

5. Term of Agreement . The term of employment of Executive pursuant to this Agreement shall commence on the date set forth above , an d shall continue through Ju ne 3 0 , 201 7 (the “ Term of Employment ” ), unless otherwise terminated by either party pursuant to Section 7 below.

6. Compensation; Reimbursement .

a. Base Salary . Employer agrees to pay Executive during the Term of Employment an annual base salary of $2 55 ,00 0 ( “ Base Salary ” ), which amount may be increased but may not be decreased, without the consent of Executive, during the Term of Employment. Executive's base salary shall be paid in equal semi-monthly installments on the 15th and final day of each month during the Term of Employment.

b. Annual Bonus . For each fiscal year, Executive shall be eligible to receive a discretionary annual bonus ( “ Discretionary Cash Bonus ” ) payable in ca sh based on a target level of 50 % of Executive's Base Salary. (Currently, Employer's fiscal year commences on April 1 and ends on March 31.) The Discretionary Cash Bonus will be determined based on the performance goals and rules established by the Compensation Committee of the Board of Directors of Employer (the “ Compensation Committee ” ). The Discretionary Cash Bonus, if any, will be payable within four months of the end of the fiscal year. Executive is not guaranteed any Discretionary Cash Bonus payment.

c. Long-term Equity Incentive Compensation . Employer has adopted long-term equity incentive compensation plans that are administered by the Compensation Committee. For each fiscal year, Executive shall be eligible to receive an award of long-term equity incentive compensation in the form of common stock of Employer, options to acquire common stock of Employer or any combination of the forego ing based on a target level of 7 0 % of Executive's Base Salary. Long-term equity incentive compensation will be determined based on performance goals and rules established by the Compensation Committee and such awards, if any, will be made within four months of the end of the fiscal year. Executive is not guaranteed any long-term equity compensation.

d. Additional Benefits . Executive shall receive usual and customary additional benefits in accordance with Employer's policies and practices for employees generally (including, without limitation, participation in any stock option plans, stock purchase plans, life and disability insurance plans, health care and hospitalization plans, medical and dental reimbursement plans, profit sharing plans, retirement plans and other employee benefit plans) for which Executive is qualified. Employer shall reimburse Executive for one medical exam every year. In addition to the foregoing, Executive shall receive an automobile allowance of $810 per month for the use of an automobile for combined business and personal use.

review, Employer, in its reasonable discretion, shall consider increasing Executive's Base Salary and other compensation based on relevant factors such as Executive's performance, Employer's accomplishments, increase or decrease in Executive's responsibilities, and cost of living increases. Any Base Salary increases normally are to be effective on such date as may be specified by Employer.

f. Reimbursement . Employer shall reimburse Executive for all reasonable expenses that Executive incurs in connection with the business of Employer or any of its subsidiaries and in the performance of Executive's duties under this Agreement. Employer shall also reimburse Executive for membership fees and expenses related to Executive's membership in professional organizations, clubs, societies and groups as may be approved by the Board of Directors from time to time, subject to such rules, regulations and record-keeping requirements as may be established from time to time by the Board.

g. Special Retention Bonus . If Executive shall remain an employee of Employer continuously from the date hereof through Ju ne 3 0 , 2017 (the “Retention Period Date”), no later than five business days following the Retention Period Date, Employer shall pay Executive in cash the amount of $ 10 0,000 as a retention bonus. If Executive intends to terminate his employment at any time on or after the Retention Period Date and before January 1, 2018, Executive shall provide notice of such planned termination at least six months prior to the termination date.

7. Termination . The provisions of this Section 7 shall apply during the Term of Employment.

a. Termination for Cause . Employer may terminate Executive's employment for “ Cause ” (as defined below), effective 14 days following written notice to Executive from Employer reasonably describing the basis for the contemplated termination. Executive shall have a right during this 14-day period to respond in writing and in person prior to Employer's final determination of Cause. During the period between such notice and final determination, the Board may suspend the performance of Executive's duties under this Agreement and direct Executive's non-attendance at work. However, Executive's right to compensation under this Agreement shall continue through and to any final termination of employment for cause. Any termination under this Section 7 (a) shall serve to relieve Executive of all his duties and authority on behalf of Employer as of the date such notice states the termination is to take effect. All obligations of Employer to Executive hereunder shall terminate as of the effective date of any such termination, except for obligations accrued prior to such effective date.

(i) For purposes of this Agreement, termination for “ Cause ” shall include any of the following:

A. Fraud, malfeasance, or embezzlement against Employer's assets or conviction of any felony;

B. Except under circumstances of disability contemplate d by the provisions of Section 7 (f), cessation of Executive's performance of Executive's duties

hereunder or deliberate and substantial failure to perform them in a capable and conscientious manner;

C. Violation of the provisions of Sections 1 2 or 1 3 ; or

D. Deliberate and substantial breach of Executive's material obligations under any other provision hereof that is not cured within 30 days after notice to Executive of the breach.

b. Termination Without Cause . (i) The Company may terminate Executive's employment for any reason other than Cause and if it does so shall pay E xecutive a lump sum equal to six month's Base Salary. If Executive terminates his employment and this Agreement for “ Good Reason, ” he will be entitled to the payments and benefits under this Section 7 (b). For purposes of this Section 7 (b), “ Good Reason ” means (i) a material change in the location where Executive is required to work or (ii) a material breach of this Agreement by Employer. Notwithstanding the foregoing, neither condition shall constitute “ Good Reason ” unless Executive provides notice to Employer within 90 days of the initial existence of the condition and Employer fails to cure the condition within 30 days of the date of Executive's notice, upon which failure to cure Executive's employment shall terminate immediately with Good Reason. If Employer cu res the condition within the 30- day period, Employer shall have no obligation to pay the amount described in this Section 7 (b). The lump sum payable under this Section 7 (b) shall be paid within 30 days after Executive's termination of employment, subject to the provisions of Section 7 (g ).

c. Termination Upon Certain Changes in Control . If a Change in Control Event (as defined below in Section 7 ( c )(iv)) shall occur and , if within the twelve- month period immediately following the Change in Control Event, (1) the Company or its successor terminates Executive's employment without Cause, or (2) Executive terminates his employment on account of a Material Chang e (as defined below in Section 7 ( c ) (iii)), Executive shall receive a lump sum severance payment equal to two times the sum of (a) the amount otherwise payable under S ection 7 (b), (b) the average annual Cash Bonus paid to the Executive for the preceding three fiscal years (or since the Executive's date of hire if less than three years) , and (c) the retention bonus otherwise payable pursuant to Section 6(g) . Executive shall be entitled to the accelerated vesting of all options and restricted stock awards issued to Executive and all options held by Executive on the termination date shall be exercisable for the remainder of their original term. The lump sum payment shall be made within 30 days following Executive's termination of employment, subjec t to the provisions of Section 7 (g ).

7 ( c )(i)(a), and finally, the amount attributable to the acceleration of vesting of options and restricted stock. All determinations of, and reductions in “ excess parachute payments ” called for in this Section 7 ( c )(ii) shall be made by an independent public accounting firm with a national reputation as shall be selected by Employer. Employer shall bear all costs associated with obtaining such determinations.

(ii) For purposes of this Agreement, a “ Material Change ” shall occur if, without Executive's consent:

A. There is a material diminution in Executive's Base Salary (from the amount in effect on the date of the Change in Control);

B. There is a material diminution in Executive's authority, duties, or responsibilities;

C. There is a material diminution in the authority, duties, or responsibilities of the supervisor (the Chief Executive Officer) to whom Executive is required to report;

D. There is a material diminution in the budget over which Executive retains authority;

E. There is a material change in the geographic location at which Executive is required to perform services; or

F. There is any other action or inaction that constitutes a material breach of this Agreement.

G. There is any other action or inaction by the Company that, in Executive's sole judgment, represents a material diminution in the characteristics of Executive's employment, including but not limited to the quality, work hours required, travel required or other material aspect of Executive's employment.

The occurrence of any of the conditions constitute a Material Change provided the Executive gives written notice to Employer of the existence of the condition giving rise to a Material Change and the Employer fails to cure such condition to Executive's reasonable satisfaction within 10 days following the date of Executive's notice.

(iii) “ Change in Control Event ” means the occurrence of any of the following:

of Employer entitled to vote generally in the election of directors (the “ Outstanding Company Voting Securities ” ); provided, however, that for purposes of this subsection (A), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from Employer as authorized by the board of directors of Employer, (2) any acquisition by Employer, including any acquisition which, by reducing the number of shares outstanding, is the sole cause for increasing the percentage of shares beneficially owned by any such Person to more than the applicable percentage set forth above, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Employer or any entity controlled by Employer or (4) any acquisition by any entity pursuant to a transaction which complies with claus es (1), (2) and (3) of Section 7 ( c )(iv)(C).

B. Individuals who, as of the date hereof, constitute the board of directors of Employer (the “ Incumbent Board ” ) cease for any reason within any period of 24 months to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Employer's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the board of directors of Employer.

C. Consummation by Employer of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Employer or the acquisition of assets of another corporation (a “ Business Combination ” ), in each case, unless, following such Business Combination, (1) more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including without limitation, a corporation which as a result of such transaction owns Employer or all or substantially all of Employer's assets either directly or through one or more subsidiaries) is represented by Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Outstanding Company Common Stock and Outstanding Company Voting Securities were converted pursuant to such Business Combination) and such ownership of common stock and voting power among the holders thereof is in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any employee benefit plan (or related trust) of Employer or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that the amount (measured as a percentage of such ownership) existed prior to the Business Combination and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination and continually in place during the one year period following the Business Combination were members of the

Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

D. Approval by the stockholders of Employer of a complete liquidation or dissolution of Employer.

d. Termination For Disability . If Executive is unable to perform Executive's services by reason of illness or incapacity for a period of more than six consecutive months, Employer may terminate Executive's employment. Employer shall receive a credit against Executive's Base Salary for any disability compensation benefit for the same calendar period received by Executive from Worker's Compensation or any commercial in surance carrier under Sections 9 and 10 while Executive is employed with Employer. If Executive's employment is terminated under this Section 7 ( d ) Executive shall receive a lump sum equal to six month ’s Base Salary. For this purpose, “ illness or incapacity ” or “ disability ” shall mean a medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least twelve months and that prevents Executive from engaging in any substantial gainful activity.

e. Death During Employment . If Executive dies during the term of his employment under this Agreement, Employer shall pay to the estate or trust of Executive the Base Salary that would otherwise be payable to Executive up to the end of the sixth month after the month in which his death occurs. If, by that time, Executive's estate or trust has not received any proceeds of the life insurance provided for in S ection 9 , Employer shall continue Executive's Base Salary hereunder for up to an additional three months, or until such life insurance proceeds are received, whichever is earlier ( “ Reimbursable Payments ” ), provided that Executive's estate or trust shall reimburse Employer for any such Reimbursable Payments made from the proceeds of such life insurance. All payments of compensation under this Section 7 (e ) shall be paid on the 15th and final day of each month according to Employer's customary payroll practices.

f. Return of Documents . Upon the expiration or termination of Executive's employment, Executive or Executive's legal representative upon request shall promptly deliver to Employer all originals and all duplicates or copies of all documents, records, notebooks and similar repositories of or containing Confidential Information as defined in Section 1 3 then in his possession, whether prepared by Executive or not.

g. Section 409A . It is the intent of the parties that all payments and benefits under this Agreement shall comply with Section 409A of the Internal Revenue Code ( “ Section 409A ” ), to the extent subject thereto, and to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance with Section 409A.

A. Notwithstanding anything in this Agreement to the contrary, Executive shall not be considered to have terminated employment with the Employer for purposes of any payments under this Agreement that are subject to Section 409A until Executive has had a “ separation from service ” from Employer within the meaning of Section 409A.

B. Each amount to be paid or benefit to be provided under this Agreement shall be treated as a “ separate payment ” for purposes of Section 409A.

C. To the extent required in order to avoid accelerated taxation and penalties, amounts that would otherwise be payable and benefits that would otherwise be provided during the six month period immediately following Executive's separation from service shall instead be paid on the first business day after the date that is six months after Executive's separation from service (or, if earlier, Executive's death).

D. Payments under Sections 7 (b) and ( c ) are intended to qualify to the maximum extent possible as “ short-term deferrals ” exempt from the application of Section 409A. Any payments and benefits that do not so qualify are intended to qualify for the Section 409A exemption set forth in Treasury Regulation Section 1.409A-1(b)(9)(iii) (which exempts from Section 409A certain payments made upon an “ involuntary separation from service ” ). To the extent that payments made pursuant to Sections (b) and (c) are made upon an “ involuntary separation from service ” but exceed the exemption threshold set forth in Treasury Regulation Section 1.409A-1(b)(9)(iii), the exemption will be first applied to any continued health and welfare benefits payable (to the extent such benefits are subject to Section 409A and are payable within six months from Executive's separation from service as defined for purposes of Section 409A (the “ Delayed Payment Date ” ) and thereafter to any cash payments until the exemption has been applied in full. Any payments under Sections 7 (b) and ( c ) that are not exempted form Section 409A and that are payable prior to the Delayed Payment Date shall be withheld by Employer and paid to Executive on the Delayed Payment Date or as soon thereafter as administratively feasible.

E. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits to Executive) during one year shall not affect amounts reimbursable or provided in any subsequent year.

F. Nothing in this Section 7(g ) shall prohibit Employer or Executive from making use of any Section 409A exemption that may be applicable to a payment or benefit under this Agreement.

G. Employer makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A. Employee acknowledges that Employer has advised Employee to seek his own counsel with respect to the federal, state, or local tax treatment of any payments or benefits under this Agreement, including the treatment of payments under Section 409A.

termination through the earlier of six months following termination of employment or until Executive is employed by a different employer (the “Post-Termination Period”), and the Executive shall be responsible for the remaining cost of such COBRA premiums.

8. Paid Time Off . Executive shall be entitled each year to 28 vacation paid days off , of which up to eight days must be used for mandatory personal time off, plus six holiday paid days off during which time his compensation shall be paid in full. Paid time off accrued during each calendar year must be used by the end of each calendar year, or will be lost, and will not accrue from one calendar year to the next, provided however that Executive shall be eligible to receive payment from Employer for any unused paid time off in accordance with any such Company policy then in effect. Exceptions to the foregoing non-accrual policy may be provided under terms and conditions approved in writing by resolution of the Board of Directors or its compensation committee in such body's sole discretion based on prolonged extra-ordinary work demands preventing Executive's timely taking vacation.

9. Insurance for the Benefit of Executive .

a. Medical Insurance . Executive and his dependents shall be covered by Employer's medical insurance in accordance with Employer's health care/medical insurance and hospitalization plan(s), in effect from time to time, the premiums for which shall be paid by Executive. Executive shall be covered by Employer's disability insurance in accordance with Employer's disability plan, in effect from time to time, the premiums for which shall be paid for by Employer.

b. Life Insurance . Employer shall at its expense continuously maintain without interruption in the name of Executive or Executive's designee or for the benefit of Executive or Executive's designee, life insurance coverage in an amount equal to three times Executive's then current base salary.

10. Insurance for the Benefit of Employer . In addition to the rights to the insurance specified in Section 9 (b), Employer shall have the right from time to time to apply for and take out in its name and at its own expense, life, health or other insurance upon Executive in any sum or sums which may be deemed necessary by Employer to protect its interest under this Agreement and Executive shall do all such things as may be necessary to assist in the procuring of such insurance by making a proper application therefore as may be required by the insurance company and submitting to the usual and customary medical examinations. Executive, in Executive's capacity as Executive, shall have no right, title or interest in or to such insurance, but the same shall be solely for the benefit of Employer and any amounts payable thereunder shall be solely payable to such Employer.

11. Representation and Warranty . Executive represents and warrants that he is not now, and will not be on the date of commencement of this Agreement, a party to any agreement, contract or understanding, whether of employment, agency or otherwise, which would in any way restrict or prohibit Executive from undertaking and performing Executive's duties in accordance with the terms and provisions of this Agreement.

12. Restrictive Covenant .

a. Non-Competition . Executive agrees and covenants that, without the Board's prior written consent and except on behalf of Employer, he will not in any manner, directly or indirectly, own, manage, operate, control, be employed by, participate in, assist or be associated in any manner with any person, firm or corporation anywhere in the world whose business competes with Employer or any subsidiary of Employer. This covenant shall remain in effect until (i) if his employment is terminated pursuant to Sections 7 (a), (c), (d) or (e), a date one year after the date Executive's employment is terminated, or (ii) if his employment is terminated pursuant to Section 7 (b), until the termination date. Notwithstanding any other provision of this Agreement, Executive may own up to 3% of the outstanding stock of a competing publicly traded corporation so long as he takes no other action furthering the business of such corporation.

b. Non-Solicitation . Until a date one year after the termination date, Executive shall not (i) solicit any other employee of Employer to leave the employ of Employer, or in any way interfere with the relationship between Employer and any other employee of Employer, or (ii) induce any customer, supplier, licensee, or other business relation of Employer to cease doing business with Employer, or in any way interfere with the relationship between any customer or business relation and Employer.

13. Confidentiality .

a. Definitions . For purposes of this Section 1 3 , the following definitions shall apply:

(i) “ Inventions ” shall mean all inventions, improvements, modifications, and enhancements, whether or not patentable, made by Executive within the scope of Executive's duties during Executive's employment by Employer.

(ii) “ Confidential Information ” shall mean Employer's proprietary know-how and information disclosed by Employer to Executive or acquired by Executive from Employer during Executive's employment with Employer about Employer's plans, products, processes and services, which Employer protects against disclosure to third parties. Confidential Information shall not include Executive's general knowledge and experience possessed prior to or obtained during his employment with Employer.

b. Restrictions on Disclosure . During the Term of Employment and thereafter, Executive shall not disclose Confidential Information to any third parties other than Employer, its employees, agents, consultants, contractors and designees without the prior written permission of Employer, or use Confidential Information for any purpose other than the conduct of Employer's business.

(i) The restrictions on disclosure and use set forth herein shall not apply to any Confidential Information which:

A. at the time of disclosure to Executive by Employer is generally available to the public or thereafter becomes generally known to the public, through no fault of Executive;

B. was known by Executive prior to his employment with Employer;

C. Executive at any time receives from a third party not under any obligation of secrecy or confidentiality to Employer;

D. Employer discloses to a third party not under any obligation of secrecy or confidentiality to it; and

E. Executive is requested or required to disclose pursuant to a subpoena or order of a court or other governmental agency, in which case Executive shall notify Employer as far in advance of disclosure as is practicable.

c. Obligations Regarding Inventions . Without any royalty or any other additional consideration to Executive: (i) Executive shall promptly inform Employer of any Inventions by a written report, setting forth the conception and reduction to practice of all inventions; (ii) Executive hereby agrees to assign and assigns to Employer all of his right, title and interest: (A) to any Inventions made during the term of his employment by Employer (including without limitation the right to license or sell such Invention to others), (B) to applications for United States and foreign letters patent, and (C) to United States and foreign letters patent granted upon such Inventions; and (iii) Executive agrees upon request and at the sole cost and expense of Employer to, at all times, do such acts (such as giving testimony in support of his inventorship) and execute and deliver promptly to Employer such papers, instruments, and documents as from time to time may be necessary or useful to apply for, secure, maintain, reissue, extend or defend Employer's interest in any Inventions or any or all United States and foreign letters patent, so as to secure Employer the full benefits of any Inventions or discoveries or otherwise to carry into full force and effect the intent of the assignment set out in Section 1 3 (c)(ii).

d. Remedies . Executive acknowledges and agrees that Executive's disclosure of any Confidential Information would result in irreparable injury to Employer. Executive acknowledges and agrees that the Confidential Information is non-public information which Executive has expended substantial time, money and effort to develop and is property considered “ Trade Secrets ” of Employer within the meaning of Colorado law. Therefore, upon the breach or threatened breach of the covenants in this Section 13 by Executive, Employer shall be entitled to obtain from any court of competent jurisdiction a preliminary and permanent injunction prohibiting such disclosure and any other equitable relief that the court deems appropriate. In addition, Employer shall be entitled to seek damages.

e. Property of Employer . Any Confidential Information that is directly or indirectly originated, developed or perfected to any degree by Executive during the term of his employment by Employer shall be and remain the sole property of Employer.

not limited to costs, litigation expenses and reasonable attorneys' fees. Except for an action to interpret or enforce Sections 1 2 or 1 3 , any controversy or claim arising out of or relating to the interpretation, alleged breach or enforcement of this Agreement shall be settled by arbitration before a single arbitrator in Denver, Colorado, in accordance with the commercial rules then in effect of the American Arbitration Association, Colorado Revised Statutes pertaining to the arbitration of civil disputes. The arbitrator, who shall be a person experienced in negotiating and making employment agreements and resolving employment disputes and in any other pertinent areas of law, shall make reasonably detailed findings to support any decision and award. The award of the arbitrator shall be final and binding and may be entered as a judgment in any court of competent jurisdiction. As part of the award in any arbitration or judicial proceedings, the prevailing party may be awarded its reasonable attorneys' fees, witness fees, expert witness fees and related costs and expenses in the discretion of the arbitrator.

15. Notices . All notices under this Agreement shall be delivered by hand or by registered or certified mail. Notices intended for Executive shall be addressed to Executive at 4120 Specialty Place, Longmont, Colorado 80504. Notices intended for Employer shall be addressed to it at 4120 Specialty Place, Longmont, Colorado 80504. All notices shall be effective upon actual delivery if by hand, or, if by mail, three days after being deposited in the United States mail, postage prepaid and addressed as required by this S ection 15 . Either party may by notice accomplished in accordance with thi s Section 15 change the address to which future notices may be sent.

16. Miscellaneous Provisions .

a. This Agreement contains the entire agreement between the parties and supersedes all prior agreements and it shall not be amended or otherwise modified in any manner except by an instrument in writing executed by both parties.

b. Neither this Agreement nor any rights or duties under this Agreement may be assigned or delegated by either party unless the other party consents in writing.

c. Except as otherwise provided herein, this Agreement shall be binding upon the inure to the benefit of the parties and their respective heirs, personal representatives, successors and assigns.

d. This Agreement has been entered into in Colorado and shall be governed by the laws of that state.

e. In fulfilling their respective obligations under this Agreement and conducting themselves pursuant to it, each party shall act reasonably and in good faith.

f. If any provisions of this Agreement shall be held to be invalid or unenforceable for any reason, the invalid or unenforceable provision shall be deemed severed from this Agreement and the balance of this Agreement shall remain in full force and effect and be enforceable in accordance with its terms.

g. To the extent necessary, the provisions of this Agreement shall be construed and administered in compliance with the requirements of S ection 409A and the regulations and any other guidance promulgated thereunder.

[Signature Page to Follow]

IN WITNESS WHEREOF , the parties have executed this Agreement the day and year first above written.

EXECUTIVE:

/s/J OSEPH R. M ITCHELL

Joseph R. Mitchell

EMPLOYER:

UQM TECHNOLOGIES, INC.

By: /s/ D AVID I. R OSENTHAL

David I. Rosenthal

Chief Financial Officer

Exhibit 10.2

UQM TECHNOLOGIES, INC.
EMPLOYMENT AGREEMENT

THIS AGREEMENT date d as of July 20 , 201 5 , is between UQM Technologies, Inc., a Colorado corp oration ( “ Employer ” ), and David I Rosenthal ( “ Executive ” ).

Recitals

A. Executive and Employer are currently parties to an Employment Agreement, dated April 30, 2013 (the “Prior Agreement”).

B. By its terms, the Prior Agreement will expire on August 31, 2015.

C. Employer and Executive wish to enter into a new employment agreement to extend the term of Executive’s employment and to provide for a retention bonus .

Agreement

In consideration of the mutual promises, covenants and conditions hereinafter set forth, Employer and Executive agree as follows:

2. Employment . Employer hereby agrees to employ Executive as its Treasurer and Chief Financial Officer for the term of employment set forth herein, and Executive hereby accepts such employment, all upon the terms and conditions hereinafter set forth.

3. Duties . Executive shall perform the duties assigned to him by the Chief Executive Officer, subject to the control, supervision and direction of the Chief Executive Officer. Executive shall be furnished with appropriate office space, secretarial assistance, and such other facilities and services as are suitable to Executive's position and adequate for the performance of Executive's duties.

6. Compensation; Reimbursement .

a. Base Salary . Employer agrees to pay Executive during the Term of Employment an annual base salary of $2 48 , 23 0 ( “ Base Salary ” ), which amount may be increased but may not be decreased, without the consent of Executive, during the Term of Employment. Executive's base salary shall be paid in equal semi-monthly installments on the 15th and final day of each month during the Term of Employment.

b. Annual Bonus . For each fiscal year, Executive shall be eligible to receive a discretionary annual bonus ( “ Discretionary Cash Bonus ” ) payable in cash based on a target level of 40% of Executive's Base Salary. (Currently, Employer's fiscal year commences on April 1 and ends on March 31.) The Discretionary Cash Bonus will be determined based on the performance goals and rules established by the Compensation Committee of the Board of Directors of Employer (the “ Compensation Committee ” ). The Discretionary Cash Bonus, if any, will be payable within four months of the end of the fiscal year. Executive is not guaranteed any Discretionary Cash Bonus payment.

c. Long-term Equity Incentive Compensation . Employer has adopted long-term equity incentive compensation plans that are administered by the Compensation Committee. For each fiscal year, Executive shall be eligible to receive an award of long-term equity incentive compensation in the form of common stock of Employer, options to acquire common stock of Employer or any combination of the foregoing based on a target level of 65% of Executive's Base Salary. Long-term equity incentive compensation will be determined based on performance goals and rules established by the Compensation Committee and such awards, if any, will be made within four months of the end of the fiscal year. Executive is not guaranteed any long-term equity compensation.

e. Annual Review of Compensation . No later than the end of the second quarter of its fiscal year, Employer shall review Executive's performance under this Agreement and establish goals and objectives for Executive's performance for the next fiscal year. In such review, Employer, in its reasonable discretion, shall consider increasing Executive's Base Salary and other compensation based on relevant factors such as Executive's performance, Employer's accomplishments, increase or decrease in Executive's responsibilities, and cost of living

increases. Any Base Salary increases normally are to be effective on such date as may be specified by Employer.

7. Termination . The provisions of this Section 7 shall apply during the Term of Employment.

(i) For purposes of this Agreement, termination for “ Cause ” shall include any of the following:

A. Fraud, malfeasance, or embezzlement against Employer's assets or conviction of any felony;

B. Except under circumstances of disability contemplate d by the provisions of Section 7 (f), cessation of Executive's performance of Executive's duties hereunder or deliberate and substantial failure to perform them in a capable and conscientious manner;

C. Violation of the provisions of Sections 1 2 or 1 3 ; or

D. Deliberate and substantial breach of Executive's material obligations under any other provision hereof that is not cured within 30 days after notice to Executive of the breach.

c. Termination Upon Certain Changes in Control . If a Change in Control Event (as defined below in Section 7 ( c )(iv)) shall occur and , if within the twelve- month period immediately following the Change in Control Event, (1) the Company or its successor terminates Executive's employment without Cause, or (2) Executive terminates his employment on account of a Material Chang e (as defined below in Section 7 ( c ) (iii)), Executive shall receive a lump sum severance payment equal to two times the sum of (a) the amount otherwise payable under S ection 7 (b), (b) the average annual Cash Bonus paid to the Executive for the preceding three fiscal years (or since the Executive's date of hire if less than three years) and, (c) the retention bonus otherwise payable pursuant to Section 6(g) . Executive shall be entitled to the accelerated vesting of all options and restricted stock awards issued to Executive and all options held by Executive on the termination date shall be exercisable for the remainder of their original term. The lump sum payment shall be made within 30 days following Executive's termination of employment, subjec t to the provisions of Section 7 (g ).

(i) Notwithstanding anything to the contrary herein, if the aggregate amounts payable pursuant to Section 7 ( c )(i), either alone or together with any other payments which Executive has the right to receive either directly or indirectly from Employer or any of its affiliates, would be subject to an excise tax as an “ excess parachute payment ” under Section 4999 of the Internal Revenue Code (the “ Code ” ), Executive hereby agrees that such aggregate amounts payable hereunder shall be reduced to an amount that does not exceed 2.99 times Executive's “ base amount, ” as defined in Code Section 280G(b)(3) and the regulations promulgated thereunder. The aggregate amount shall be reduced in the following order: first, the amount determined under Section 7 (c )(i)(b), next the amount determined under Section 7 ( c )(i)(a), and finally, the amount attributable to the acceleration of vesting of options and restricted stock. All determinations of, and reductions in “ excess parachute payments ” called for in this Section 7 ( c )(ii) shall be made by an independent public accounting firm with a national reputation as shall be selected by Employer. Employer shall bear all costs associated with obtaining such determinations.