10-Q

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 September 30, 2012

[  ] 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 [ X ]  Accelerated filer [  ]  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 October 23, 2012 was 36,649,951.

TABLE OF CONTENTS

	Page No.
PART I Financial Information	1
Item 1.   Financial Statements (unaudited)	1
Consolidated Balance Sheets as of September 30, 2012 and March 31, 2012	1
Consolidated Statements of Operations for the quarters and six month periods ended September 30, 2012 and 2011	3
Consolidated Statements of Cash Flows for the six month periods ended September 30, 2012 and 2011	4
Notes to Consolidated Financial Statements	5
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.    Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.    Controls and Procedures	26
PART II   Other Information	27
Item 1.    Legal Proceedings	27
Item 1A. Risk Factors	27
Item 6.    Exhibits	31

i

Part I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (unaudited)

	September 30, 2012		March 31, 2012
Assets
Current assets:
Cash and cash equivalents	$	6,780,447		11,637,940
Short-term investments		245,987		482,909
Accounts receivable, net		4,757,740		4,929,117
Costs and estimated earnings in excess of billings on
uncompleted contracts		183,665		78,376
Inventories		13,427,859		10,564,148
Facility held for sale		1,621,257		1,621,257
Prepaid expenses and other current assets		622,270		556,592
Total current assets		27,639,225		29,870,339
Property and equipment, at cost:
Land		1,683,330		1,683,330
Building		4,516,301		4,484,493
Machinery and equipment		8,048,746		7,868,481
		14,248,377		14,036,304
Less accumulated depreciation		(5,320,920)		(4,677,827)
Net property and equipment		8,927,457		9,358,477
Patent costs, net of accumulated amortization of $833,098 and $816,259		221,453		222,836
Trademark costs, net of accumulated amortization of $61,987 and $59,743		111,600		113,844
Other assets		73,043		90,105
Total assets	$	36,972,778		39,655,601

See accompanying notes to consolidated financial statements.

1

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (unaudited), Continued

	September 30, 2012		March 31, 2012
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,549,003		2,356,513
Other current liabilities		3,496,252		2,329,101
Short-term deferred compensation under executive employment
agreements		-		152,007
Billings in excess of costs and estimated earnings on
uncompleted contracts		136,025		7,201
Total current liabilities		5,181,280		4,844,822
Long-term deferred compensation under executive employment agreements		602,081		563,100
Total liabilities		5,783,361		5,407,922
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 50,000,000 shares
authorized; 36,591,451 and 36,356,177 shares
issued and outstanding		365,915		363,562
Additional paid-in capital		115,161,473		114,371,106
Accumulated deficit		(84,337,971)		(80,486,989)
Total stockholders’ equity		31,189,417		34,247,679
Total liabilities and stockholders’ equity	$	36,972,778		39,655,601

See accompanying notes to consolidated financial statements.

2

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations (unaudited)

	Quarter Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Revenue:
Contract services	$	350,634		135,547		716,013		211,849
Product sales		845,470		2,198,676		2,876,519		3,437,434
		1,196,104		2,334,223		3,592,532		3,649,283
Operating costs and expenses:
Costs of contract services		213,459		86,123		396,535		131,693
Costs of product sales		518,754		1,227,559		1,801,617		1,909,154
Research and development		19,810		647		32,457		4,810
Production engineering		1,505,103		1,622,163		2,655,322		3,196,986
Reimbursement of costs under DOE grant		(965,564)		(1,111,034)		(1,730,200)		(2,232,670)
Selling, general and administrative		2,472,653		2,099,025		4,295,500		3,288,628
Gain on sale of long-lived asset		-		(3,138)		-		(3,138)
		3,764,215		3,921,345		7,451,231		6,295,463
Loss before other income		(2,568,111)		(1,587,122)		(3,858,699)		(2,646,180)
Other income:
Interest income		2,260		641		5,006		15,895
Other		2,303		296		2,711		557
		4,563		937		7,717		16,452
Net loss	$	(2,563,548)		(1,586,185)		(3,850,982)		(2,629,728)
Net loss per common share -
basic and diluted	$	(0.07)		(0.04)		(0.11)		(0.07)
Weighted average number of shares
of common stock outstanding -
basic and diluted		36,547,878		36,304,613		36,471,063		36,263,640

See accompanying notes to consolidated financial statements.

3

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

	Six Months Ended September 30,
	2012		2011
Cash flows from operating activities:
Net loss	$	(3,850,982)		(2,629,728)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		662,175		575,529
Non-cash equity based compensation		800,677		649,625
Gain on sale of equipment		-		(3,138)
Change in operating assets and liabilities:
Accounts receivable and costs and estimated earnings in
excess of billings on uncompleted contracts		39,814		295,287
Inventories		(2,863,711)		(2,043,855)
Prepaid expenses and other current assets		(65,678)		(811,632)
Accounts payable and other current liabilities		359,641		(239,982)
Billings in excess of costs and estimated earnings on
uncompleted contracts		128,824		(15,726)
Deferred compensation under executive
employment agreements		(113,026)		(684,181)
Net cash used in operating activities		(4,902,266)		(4,907,801)
Cash flows from investing activities:
Purchases of short-term investments		(246,136)		(6,636,954)
Maturities of short-term investments		483,058		8,030,336
Increase in other long-term assets		(293)		-
Acquisition of property and equipment		(311,580)		(1,329,245)
Property and equipment reimbursements received from DOE under
grant		143,136		1,078,743
Increase in patent and trademark costs		(15,455)		(17,981)
Cash proceeds from the sale of equipment		-		3,825
Net cash provided by investing activities		52,730		1,128,724
Cash flows from financing activities:
Issuance of common stock under employee stock purchase plan		32,473		22,994
Purchase of treasury stock		(40,430)		(12,376)
Net cash provided by (used in) financing activities		(7,957)		10,618
Decrease in cash and cash equivalents		(4,857,493)		(3,768,459)
Cash and cash equivalents at beginning of period		11,637,940		15,878,752
Cash and cash equivalents at end of period	$	6,780,447		12,110,293
Supplemental cash flow information:
Interest paid in cash during the period	$	-		-
Non-cash investing and financing transactions:
During the six months ended September 30, 2011 we reclassified a facility with a gross value of $2,645,793 and accumulated depreciation of $1,024,536 to facility held for sale.

See accompanying notes to consolidated financial statements.

4

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

(1) The accompanying consolidated financial statements are unaudited; however, in the opinion of management, alladjustments, 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 year ended March 31, 2012.

(2)   New Accounting Pronouncements

As of September 30, 2012 there were no new accounting pronouncements expected to significantly impact our consolidated financial statements, results of operations, or cash flows.

(3)  Stock-Based Compensation

Stock Option Plans

As of September 30, 2012, we had zero shares of common stock available for future grant to employees, consultants and key suppliers under our 2012 Equity Incentive Plan (“2012 Plan”). The term of the 2012 Plan is ten years. Under the 2012 Plan, the exercise price of each option is set at the fair value of the common stock on the date of grant and the maximum term of the option is ten years from the date of grant. Options granted to employees generally vest ratably over a three-year period. The maximum number of underlying shares that may be granted to an employee under the Plan in any calendar year is 500,000. Forfeitures under the Plan are available for re-issuance at any time prior to expiration of the Plan in 2022. Options granted under the Plan to employees require the option holder to abide by certain Company policies, which restrict their ability to sell the underlying common stock. Prior to the adoption of the 2012 Plan, we issued stock options under our 2002 Equity Incentive Plan. Forfeitures under the 2002 Equity Incentive Plan may not be re-issued.

Non-Employee Director Stock Option Plan

In February 1994, our Board of Directors ratified a Stock Option Plan for Non-Employee Directors (“Directors Plan”) pursuant to which Directors may elect to receive stock options in lieu of cash compensation for their services as directors. As of September 30, 2012, we had 231,565 shares of common stock available for future grant under the Directors Plan. Option terms range from three to ten years from the date of grant. Option exercise prices are equal to the fair value of the common shares on the date of grant. Options granted under the plan generally vest immediately. Forfeitures under the Directors Plan are available for re-issuance at a future date.

Stock Purchase Plan

We have established a Stock Purchase Plan under which eligible employees may contribute up to ten percent of their compensation to purchase shares of our common stock at 85 percent of the fair market value at specified dates. At September 30, 2012 we had 428,785 shares of common stock available for issuance under the Stock Purchase Plan. During the quarters and six month periods ended September 30, 2012 and 2011, we issued 141 and 523, and 26,836 and 11,497 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 and six month periods ended September 30, 2012 and 2011 was $172 and $1,375, and $32,473 and $22,994, respectively.   

5

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

Stock Bonus Plan

We have a Stock Bonus Plan (“Stock Plan”) administered by the Board of Directors. As of September 30, 2012 there were 509,386 shares of common stock available for future grant under the Stock Plan. Under the Stock Plan, shares of common stock may be granted to employees, key consultants, and directors who are not employees as additional compensation for services rendered. Vesting requirements for grants under the Stock Plan, if any, are determined by the Board of Directors at the time of grant. There were 440,934 shares granted under the Stock Plan during both the quarter and six month period ended September 30, 2012, and 213,398 shares granted under the Stock Plan during both the quarter and six month period ended September 30, 2011.

We use the straight-line attribution method to recognize share-based compensation costs over the requisite service period of the award. Options granted by us generally expire ten years from the grant date. Options granted to existing and newly hired employees generally vest over a three-year period from the date of the grant. The exercise price of options is equal to the market price of our common stock (defined as the closing price reported by the NYSE MKT) on the date of grant.

We use the Black-Scholes-Merton option pricing model for estimating the fair value of stock option awards. The table below shows total share-based compensation expense for the quarters and six month periods ended September 30, 2012 and 2011 and the classification of these expenses:

	Quarter Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Costs of contract services	$	4,774		5,430		10,301		8,877
Costs of product sales		11,089		22,885		21,836		42,861
Research and development		792		22		1,305		47
Production engineering		48,041		54,379		78,596		98,027
Selling, general and administrative		535,140		475,822		688,639		499,813
	$	599,836		558,538		800,677		649,625

Share-based compensation capitalized in inventories was insignificant in the quarters and six month periods ended September 30, 2012 and September 30, 2011.

We adjust share-based compensation on a quarterly basis for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments in the quarters and six month periods ended September 30, 2012 and 2011 was insignificant.

All options/shares granted under the Non-Employee Director Stock Option Plan /Directors Plan are vested.

A summary of the status of non-vested shares under the 2012 Plan and its predecessor plan as of September 30, 2012 and 2011 and changes during the quarters and six month periods ended September 30, 2012 and 2011 are presented below:

6

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

	Six Months Ended September 30, 2012			Six Months Ended September 30, 2011
		Weighted-Average			Weighted-Average
	Shares Under	Grant Date		Shares Under	Grant Date
	Option	Fair Value		Option	Fair Value
Non-vested at April 1	668,722	$	1.69	475,934	$	1.73
Granted	25,000	$	0.71	-	$	-
Vested	-	$	-	-	$	-
Forfeited	(2,518)	$	1.61	(3,610)	$	1.79
Non-vested at June 30	691,204	$	1.65	472,324	$	1.73
Granted	1,075,000	$	0.89	389,588	$	1.68
Vested	(543,557)	$	1.32	(149,126)	$	1.41
Forfeited	(16,985)	$	1.89	(931)	$	1.61
Non-vested at September 30	1,205,662	$	0.88	711,855	$	1.77

As of September 30, 2012, there was $898,902 of total unrecognized compensation costs related to stock options granted under the 2012 Plan and its predecessor plan. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 29 months. The total fair value of stock options that vested during both the quarter and six month period ended September 30, 2012 was $719,857. The total fair value of stock options that vested during both the quarter and six month period ended September 30, 2011 was $209,581.  

A summary of the non-vested shares under the Stock Bonus Plan as of September 30, 2012 and 2011 and changes during the quarters and six month periods ended September 30, 2012 and 2011 are presented below:

	Six Months Ended September 30, 2012			Six Months Ended September 30, 2011
		Weighted-Average			Weighted-Average
	Shares Under	Grant Date		Shares Under	Grant Date
	Contract	Fair Value		Contract	Fair Value
Non-vested at April 1	167,680	$	2.44	62,199	$	2.50
Granted	-	$	-	-	$	-
Vested	(47,004)	$	2.49	-	$	-
Forfeited	-	$	-	-	$	-
Non-vested at June 30	120,676	$	2.42	62,199	$	2.50
Granted	440,934	$	0.87	213,398	$	2.34
Vested	(202,755)	$	1.17	(107,917)	$	2.28
Forfeited	-	$	-	-	$	-
Non-vested at September 30	358,855	$	1.22	167,680	$	2.44

As of September 30, 2012, there was $390,544 of total unrecognized compensation costs related to common stock granted under our Stock Bonus Plan. The unrecognized compensation cost at September 30, 2012 is expected to be recognized over a weighted-average period of 30 months. The total fair value of common stock granted under the Stock Bonus Plan that vested during the quarter and six month period ended September 30, 2012 was $237,904 and $354,969, respectively. The total fair value of common stock granted under the Stock Bonus Plan that vested during both the quarter and six month period ended September 30, 2011 was $245,745.   

Expected volatility is based on historical volatility. The expected life of options granted is based on historical experience.

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2012 under our 2012 Plan and its predecessor plan is as follows:

7

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2012	2,782,456	$	2.81		4.0 years	$	-
Granted	25,000	$	1.03
Exercised	-	$	-			$	-
Forfeited	(2,518)	$	2.40
Outstanding at June 30, 2012	2,804,938	$	2.80		3.8 years	$	-
Granted	1,075,000	$	0.89
Exercised	-	$	-			$	-
Forfeited	(16,985)	$	2.73
Outstanding at September 30, 2012	3,862,953	$	2.27		5.2 years	$	293,500
Exercisable at September 30, 2012	2,657,290	$	2.71		3.4 years	$	49,972
Vested and expected to vest at September 30, 2012	3,804,454	$	2.28		5.2 years	$	241,164

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2011 under our 2002 Equity Incentive Plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2011	2,630,491	$	3.00		3.7 years	$	959,001
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	(6,309)	$	3.08
Outstanding at June 30, 2011	2,624,182	$	3.00		3.5 years	$	39,661
Granted	389,588	$	2.40
Exercised	-	$	-			$	-
Forfeited	(35,931)	$	3.54
Outstanding at September 30, 2011	2,977,839	$	2.92		4.1 years	$	-
Exercisable at September 30, 2011	2,265,984	$	2.94		2.9 years	$	-
Vested and expected to vest at September 30, 2011	2,937,409	$	2.92		4.0 years	$	-

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2012 under our Directors Plan is as follows:

8

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2012	445,754	$	2.59		3.3 years	$	-
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	-	$	-
Outstanding at June 30, 2012	445,754	$	2.59		3.1 years	$	-
Granted	282,051	$	0.79
Exercised	-	$	-			$	-
Forfeited	(51,949)	$	2.18
Outstanding at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359
Exercisable at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359
Vested and expected to vest at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2011 under our Directors Plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2011	329,786	$	2.86		3.1 years	$	129,642
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	-	$	-
Outstanding at June 30, 2011	329,786	$	2.86		2.9 years	$	9,734
Granted	155,122	$	2.04
Exercised	-	$	-			$	-
Forfeited	(25,996)	$	2.33
Outstanding at September 30, 2011	458,912	$	2.61		3.7 years	$	-
Exercisable at September 30, 2011	458,912	$	2.61		3.7 years	$	-
Vested and expected to vest at September 30, 2011	458,912	$	2.61		3.7 years	$	-

Cash received by us upon the exercise of stock options was zero for the quarters and six month periods ended September 30, 2012 and September 30, 2011. The source of shares of common stock issuable upon the exercise of stock options is from authorized and previously unissued common shares. 

9

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

(4)  We have an investment policy approved by the Board of Directors that governs the quality, acceptability and dollar concentration of our investments. Investments are comprised of marketable securities and consist primarily of commercial paper, asset-backed and mortgage-backed notes and bank certificates of deposits with original maturities beyond three months. All marketable securities and corporate bonds are held in our name at three major financial institutions who hold custody of the investments. All of our investments are held-to-maturity investments as we have the positive intent and ability to hold until maturity. These securities are recorded at amortized cost.

The amortized cost and unrealized gain or loss of our investments at September 30, 2012 and March 31, 2012 were:

	September 30, 2012			March 31, 2012
	Amortized Cost		Gain (Loss)	Amortized Cost		Gain (Loss)
Short-term investments:
Commercial paper, corporate and foreign bonds	$	245,987	4		482,909	11,626
		245,987	4		482,909	11,626
Long-term investments:
Certificates of deposit (included in other assets)		62,146	-		61,855	-
	$	308,133	4		544,764	11,626

The time to maturity of held-to-maturity securities were:

	September 30, 2012		March 31, 2012
Three to six months	$	245,987		432,985
Six months to one year		-		49,924
Over one year		62,146		61,855
	$	308,133		544,764

(5)  At September 30, 2012 and March 31, 2012, the estimated period to complete contracts in process ranged from one to four months and one to ten months, respectively. We expect to collect all related accounts receivable arising therefrom within sixty days of billing. The following summarizes contracts in process:

	September 30, 2012		March 31, 2012
Costs incurred on uncompleted contracts	$	1,063,024		1,206,786
Estimated earnings		608,179		380,713
		1,671,203		1,587,499
Less billings to date		(1,623,563)		(1,516,324)
	$	47,640		71,175
Included in the accompanying balance sheets as follows:
Costs and estimated earnings in excess of billings on
uncompleted contracts	$	183,665		78,376
Billings in excess of costs and estimated earnings on
uncompleted contracts		(136,025)		(7,201)
	$	47,640		71,175

10

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

(6)    Inventories at September 30, 2012 and March 31, 2012 consist of:

	September 30, 2012		March 31, 2012
Raw materials	$	10,106,396		7,189,930
Work-in-process		428,362		710,603
Finished products		2,893,101		2,663,615
	$	13,427,859		10,564,148

Our raw material inventory is subject to obsolescence and potential impairment due to bulk purchases in excess of customers’ requirements. We periodically assess our inventories for recovery of carrying value based on available information, expectations and estimates, and adjust inventory carrying values to the lower of cost or market for estimated declines in the realizable value. There was no impairment for obsolete inventory during the six month periods ended September 30, 2012 and 2011.

(7)   Facility Held for Sale

The Company has listed its former facility in Frederick, Colorado for sale with a commercial real estate broker.

The facility has been reclassified as a current asset and the Company has discontinued depreciating the asset pending its sale, which is expected to occur within one year.

(8)   Government Grants

We have a $45,145,534 grant (the “Grant”) with the U.S. Department of Energy (“DOE”) under the American Recovery and Reinvestment Act. The Grant provides funds to facilitate the manufacture and deployment of electric drive vehicles, batteries and electric drive vehicle components in the United States. Pursuant to the terms of the Agreement, the DOE will reimburse 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 and other products. The period of the Grant is through January 12, 2015. We recognize government grants when it is probable that the Company will comply with the conditions attached to the grant arrangement and the grant will be received.

Funding for qualifying project costs incurred is initially limited to $32.0 million until we provide the DOE with an updated total estimated cost of the project along with evidence of firm commitments for our 50 percent share of the total estimated cost of the project no later than July 12, 2013. If all such funds have not been secured, we must submit, by such date, a funding plan to obtain the remainder of such funds, which is acceptable to the DOE. In the event we do not satisfy the foregoing contingency, the Grant may be terminated. In addition, the Grant may be terminated at any time at the convenience of the government.

The Grant is also subject to our compliance with certain reporting requirements. The American Recovery and Reinvestment Act imposes 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.

While UQM has exclusive patent ownership rights for any technology developed with Grant funds, we are required to grant the DOE a non-exclusive, non-transferable, paid-up license to use such technology.

11

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

At September 30, 2012 we had received reimbursements from the DOE under the Grant totaling $18.2 million and had grant funds receivable of $0.4 million.

The application of grant funds to eligible capital asset purchases under the Grant as of September 30, 2012 and March 31, 2012 are as follows:

	September 30, 2012
	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		7,355,957		3,677,978		3,677,979
	$	18,159,081		9,079,540		9,079,541
	March 31, 2012
	Purchase Cost		Grant Funding		Recorded Value
Land	$	896,388		448,194		448,194
Building		9,865,371		4,932,685		4,932,686
Machinery and equipment		7,163,597		3,581,799		3,581,798
	$	17,925,356		8,962,678		8,962,678

(9)   Other current liabilities at September 30, 2012 and March 31, 2012 consist of:

	September 30, 2012		March 31, 2012
Accrued payroll and employee benefits	$	248,695		206,919
Accrued personal property and real estate taxes		248,500		229,470
Accrued warranty costs		151,261		154,978
Unearned revenue		1,928,486		1,705,715
Accrued royalties		48,336		31,493
Accrued import duties		813,740		-
Other		57,234		526
	$	3,496,252		2,329,101

12

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

10) Stockholders’ Equity

Changes in the components of stockholders’ equity during the quarter and six month period ended September 30, 2012 were as follows: 

	Number of
	common				Additional				Total
	shares		Common		paid-in		Accumulated		stockholders’
	issued		stock		capital		deficit		equity
Balances at April 1, 2012		36,356,177	$	363,562		114,371,106		(80,486,989)		34,247,679
Issuance of common stock under
employee stock purchase plan		26,695		267		32,034		-		32,301
Purchase of treasury stock		(14,609)		(146)		(16,508)		-		(16,654)
Issuance of common stock under
stock bonus plan		47,004		470		(470)		-		-
Compensation expense from
employee and director stock
option and common stock grants		-		-		200,841		-		200,841
Net loss		-		-		-		(1,287,434)		(1,287,434)
Balances at June 30, 2012		36,415,267	$	364,153		114,587,003		(81,774,423)		33,176,733
Issuance of common stock under
employee stock purchase plan		141		1		171		-		172
Purchase of treasury stock		(26,712)		(267)		(23,509)		-		(23,776)
Issuance of common stock under
stock bonus plan		202,755		2,028		133,464		-		135,492
Compensation expense from
employee and director stock
option and common stock grants		-		-		464,344		-		464,344
Net loss		-		-		-		(2,563,548)		(2,563,548)
Balances at September 30, 2012		36,591,451	$	365,915		115,161,473		(84,337,971)		31,189,417

13

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

(11) Significant Customers 

We have historically derived significant revenue from a few key customers. Revenue from Audi totaled $728,000 and zero for the six month periods ended September 30, 2012 and 2011, respectively, which was 20 percent and nil of our consolidated total revenue, respectively. There were no shipments to Audi during the quarters ended September 30, 2012 and 2011.

Trade accounts receivable and inventories associated with this customer totaled zero as of September 30, 2012 and March 31, 2012.

Revenue from CODA Automotive totaled $47,764 and $818,555for the quarters ended September 30, 2012 and 2011, respectively, which was 4 percent and 35 percent of our consolidated total revenue, respectively.Revenue from CODA Automotive totaled $112,984 and $818,555 for the six month periods ended September 30, 2012 and 2011, respectively, which was 3 percent and 22 percent of our consolidated total revenue, respectively.

Trade accounts receivable and inventories associated with the CODA Automotive production program totaled $14,473,809 and $11,068,462 at September 30, 2012 and March 31, 2012, respectively. 

Revenue from Meggitt (Addison), Inc. totaled $229,429 and $159,038 for the quarters ended September 30, 2012 and 2011, respectively, which was 19 percent and 7 percent of our consolidated total revenue, respectively. Revenue fromMeggitt (Addison), Inc. totaled $455,490 and $318,515 for the six month periods ended September 30, 2012 and 2011, respectively, which was 13 percent and 9 percent of our consolidated total revenue, respectively.

Trade accounts receivable and inventories associated with this customer totaled $381,836 and $315,896 at September 30, 2012 and March 31, 2012, respectively.

Revenue derived from contracts with agencies of the U.S. Government and from subcontracts with U.S. Government prime contractors totaled $326,950 and $135,547, and $620,586 and $208,849 for the quarters and six month periods ended September 30, 2012 and 2011, respectively, which was 27 percent and 6 percent, and 17 percent and 6 percent of our consolidated total revenue for the quarters and six month periods ended September 30, 2012 and 2011, respectively. Accounts receivable from government-funded contracts represented 9 percent of total accounts receivable as of September 30, 2012 and March 31, 2012.

(12)  Income Taxes

The Company currently has a full valuation allowance, 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 September 30, 2012 and 2011, we had no provisions for interest or penalties related to uncertain tax positions. 

The tax years 2007 through2011 remain open to examination by both the Internal Revenue Service of the United States and by the various state taxing authorities where we file. 

(13) Loss Per Common Share

Basic earnings per share is computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed by dividing income or loss available to common stockholders by all outstanding and potentially dilutive shares during the periods presented, unless the effect is antidilutive. At September 30, 2012 and 2011, respectively, common shares issued

14

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

under the Stock Bonus Plan but not yet earned totaling 358,855and 167,680 were being held by the Company. For the quarters and six month periods ended September 30, 2012 and 2011, respectively,32,681 and zero, and47,430 and zero shares, were potentially includable in the calculation of diluted loss per share under the treasury stock method but were not included, because to do so would be antidilutive. At September 30, 2012 and 2011, options to purchase 4,590,325 and 3,450,310 shares of common stock, respectively, were outstanding. For the quarters and six month periods ended September 30, 2012 and 2011, respectively, options for 3,181,758 and 3,423,669,  and  3,156,758 and 2,430,435 shares were not included in the computation of diluted loss per share because the option exercise price was greater than the average market price of the common stock. In-the-money options determined under the treasury stock method to acquire163,541 and 919, and 224,330 and 34,474 shares of common stock for the quarters and six month periods ended September 30, 2012 and 2011, respectively, were potentially includable in the calculation of diluted loss per share but were not, because to do so would be antidilutive.

(14) 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. The carrying value of investments is the amortized cost of the investments which approximates fair value. See Note 4. 

(15) Fair Value Measurements

Liabilities measured at fair value on a recurring basis as of September 30, 2012 are summarized below:

			Fair Value at Reporting Date Using
			Quoted Prices
			In Active		Significant
			Markets		Other		Significant
			For Identical		Observable		Unobservable
			Liabilities		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Deferred compensation under
executive employment agreements (1)	$	602,081		-		-		602,081
Note (1) Included in long term liabilities on our consolidated balance sheet as of September 30, 2012.

Liabilities measured at fair value on a recurring basis as of March 31, 2012 are summarized below:

			Fair Value at Reporting Date Using
			Quoted Prices
			In Active		Significant
			Markets		Other		Significant
			For Identical		Observable		Unobservable
			Liabilities		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Deferred compensation under
executive employment agreements (1)	$	715,107		-		-		715,107
Note (1) $152,007 included in current liabilities and $563,100 included in long term liabilities on our consolidated balance sheet as of March 31, 2012.

15

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(unaudited)

Deferred compensation under executive employment agreements represents the future compensation potentially payable under the retirement and voluntary termination provisions of executive employment agreements. The value of the Level 3 liability in the foregoing table was determined using a discounted cash flow model with a discount rate of 14 percent based on the expected cost of capital for the Company.

A summary of the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) follows:

	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Deferred Compensation On Executive Employment Agreements
	Quarter Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Balance at beginning of period	$	589,242		614,381		715,107		1,316,372
Transfers into Level 3		-		-		-		-
Transfers out of Level 3		-		-		-		-
Total gains or losses (realized and unrealized):
Included in earnings		12,839		17,810		38,981		55,019
Included in other comprehensive income		-		-		-		-
Settlements		-		-		(152,007)		(739,200)
Balance at the end of period	$	602,081		632,191		602,081		632,191
Loss for the period included in earnings
attributable to the Level 3 liability still
held at the end of the period	$	12,839		17,810		38,981		55,019

(16) Commitments and Contingencies

Employment Agreements

We have entered into employment agreements with five of our officers. Two of these agreements expired on August 22, 2012, one agreement expires November 30, 2014, one agreement expires on May 31, 2015 and one agreement expires on August 31, 2015. The aggregate future base salary payable to these five executive officers under the employment agreements over their remaining terms is $2,244,833. In addition, we have recorded a liability of $602,081 and $715,107 at September 30, 2012 and March 31, 2012, respectively, representing the potential future compensation payable under the retirement and voluntary termination provisions of the employment agreements of the Company’s current officers.   

Lease Commitments

At September 30, 2012 there were no operating leases. 

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.

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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, future orders to be received, future shipments and payments under our Supply Agreement with CODA, future financial results 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.

Introduction

We are a developer and manufacturer of power dense, high efficiency electric motors, generators and power electronic controllers for the automotive, commercial truck, bus and military markets. Our primary focus is incorporating our advanced technology into products for clean vehicles including propulsion systems for clean vehicles including electric, hybrid-electric, plug-in hybrid-electric and fuel cell electric vehicles.

We generate revenue from two principal activities: 1) research, development and application engineering services that are paid for by our customers; and 2) the sale of motors, generators and electronic controls. 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. Our product sales consist of both prototype low volume sales, which are generally sold to a broad range of customers, and annually recurring higher volume production.

During the second quarter this fiscal year we completed a memorandum of understanding with a major Chinese company for the development and marketing of UQM electric propulsion systems for New Energy Vehicles in China. This agreement expands the global reach of UQM to China, and represents the initial step in our strategy to penetrate the Chinese market with our leading electric propulsion products.  Under the agreement, we will work collaboratively with our China-based partner to introduce UQM products into the Chinese market for use in New Energy Vehicles.  Our Chinese partner, with over $45 billion RMB  (approximately $7 billion USD) in annual revenue, has a substantial footprint throughout China and we believe is well-positioned to introduce our products into the country’s developing New Energy Vehicle market.  This agreement is an important step in our strategic plan to enter the Chinese market with our highly efficient electric propulsion systems and related products.

Also during the second quarter we announced that our PowerPhase Pro^® 100 electric propulsion system is powering the new all-electric Mylne Bolt 18 yacht tender, which debuted in September at the 2012 Monaco Yacht Show. Mylne has been making distinctive yachts since 1896, and the Bolt 18 is the company’s first all-electric vessel designed as a yacht tender.  The Bolt 18 can hold a crew of six and tow water-skiers and wake boarders. Additionally, Mylne is developing all-electric yachts which will also use UQM PowerPhase systems, further expanding UQM product offerings in the marine market.

We have entered into a ten year supply agreement with CODA Automotive (“CODA”) to supply UQM PowerPhase Pro 100 electric propulsion systems to CODA for their all-electric passenger automobile.  CODA introduced its passenger vehicle in the state of California in March 2012 and has announced dealers in three regions of California.

The CODA vehicle, excluding the battery pack, is assembled in China by Harbin Haifei Automotive Industry Group Co. Ltd. and shipped to CODA’s facility in Benicia, California where the battery packs are installed and final vehicle test activities are performed prior to shipment of finished vehicles to CODA dealers.  Our terms of sale under the supply agreement are FOB China port. As a result, we recognize revenue on shipments to CODA when the units are delivered to a port in China, which is typically 4 to 5 weeks following the date the units are shipped from our Longmont, Colorado facility.

17

We began deliveries of production qualified PowerPhase Pro 100 systems under our supply agreement with CODA in October 2011.CODA’s production and delivery of vehicles to its dealers since introduction of the vehicle has been at a reduced rate versus initial CODA forecasts.  CODA has announced that they have opted for a slow production acceleration in order to ensure flawless execution at every step of their operating system, which includes component supply from four continents, manufacturing operations at two locations in China and one location in the U.S., logistic pipeline and dealer delivery process.  Due to the slower launch rate, we suspended production for CODA to properly balance our inventories. CODA has also announced that they are seeking additional capital. However, current conditions in the capital markets have caused many small companies, including CODA, to experience difficulty and delays in raising substantial amounts of new capital.  As a result of these factors, we did not produce and ship any propulsion systems to CODA during the quarter and six month period ended September 30, 2012. At September 30, 2012 we had trade accounts receivable and inventories associated with the CODA production program totaling $14,473,809.  At September 30, 2012 CODA was delinquent in the payment of trade account receivables due to us. The timing of the utilization of inventories and the shipment of additional propulsion systems to CODA and the collection of existing and future trade accounts receivable will be dependent on CODA’s ability to raise capital to fund on-going operations, their future vehicle production rate, and the rate of delivery of vehicles to its dealer network. If CODA does not honor its financial obligations to us under the Supply Agreement, it could have a material adverse effect on our financial position, liquidity and results of operations.

In September, CODA announced that they have customer orders for 1,000 vehicles, they intend to add 40 new dealerships by the summer of 2013, including 10 by the end of calendar year 2012 and they are pursuing an additional $150 million in capital to fund their ongoing operations. CODA has also announced an agreement with Great Wall Motors Company, Baoding, China, to co-develop an all-electric vehicle for worldwide distribution.  The joint effort is intended to blend CODA battery technology and knowledge of the U.S. market with the expertise of one of China’s fastest growing automotive producers.  We understand that under the arrangement, vehicles will be sub-assembled in Great Wall’s manufacturing facilities in Baoding.  Final assembly of vehicles destined for delivery in the U.S. will take place at CODA’s facility in the U.S.  CODA has stated that the goal of its Great Wall joint venture is to co-develop and introduce the most affordable electric vehicle on the market, comparable in price to entry-level internal combustion engine vehicles after government incentives.  We believe the CODA/Great Wall collaboration provides us with a pathway for our technology into China, Eastern Europe and other areas of the world.  We are working with CODA on the details for a propulsion system for this program and hope to secure the future volume production business. 

We also supply electric propulsion systems to Proterra, Inc. (“Proterra”), a developer and manufacturer of all-electric composite transit buses, and Electric Vehicles International (“EVI”) and Boulder EV (“BEV”), developers and manufacturers of all-electric medium-duty delivery trucks.   EVI has announced orders from UPS for 100 all-electric delivery vans and from Frito Lay for delivery trucks, and BEV has announced orders from Federal Express for delivery vans, all of which are powered by our electric propulsion systems.  Deliveries for these programs are ongoing.

We also supply DC-to-DC converters to Eaton Corporation as part of their hybrid electric propulsion system which powers medium-duty hybrid trucks manufactured by International Truck and Engine Corporation, PACCAR and Freightliner Trucks. Deliveries for these programs are ongoing.

We have a $45.1 million Grant from the U.S. Department of Energy (“DOE”) under the American Recovery and Reinvestment Act (“ARRA”) to accelerate the manufacturing and deployment of electric vehicles, batteries and components in the United States. The Grant provides for a 50 percent cost-share by the Company. Capital expenditures for facilities, tooling and manufacturing equipment and the qualification and testing of products associated with the launch of volume production for CODA Automotive, Proterra, EVI, BEV and other customers are eligible for reimbursement under the DOE program. The term of the Grant is through January 12, 2015.  We recorded reimbursements under the DOE Grant through September 30, 2012 for capital assets acquired of $9.1 million, which were recorded as a reduction in the cost basis of the assets acquired. We also recorded reimbursements of product qualification and testing costs under the Grant, for the quarter ended September 30, 2012 of $1.0 million. Total reimbursements of product qualification and testing costs through September 30, 2012 were $9.5 million.

We have listed our former facility in Frederick, Colorado for sale with a commercial broker.  As a result, the carrying value of the facility has been classified as a current asset and listed under the caption facility held for sale.

We expect demand for our electric propulsion system and generator products to remain strong for the foreseeable future as vehicle makers continue to focus on the development and introduction of electric and hybrid electric vehicles as part of the restructuring of the global automotive industry to provide a broader selection of highly fuel efficient vehicles to

18

consumers.  This demand is due, in part, to an expansion in the number of all-electric and hybrid electric vehicle platforms being developed for potential introduction in the passenger automobile market, the amount of government grants and loans available to encourage the development and introduction of clean vehicles, tax incentives to purchasers of these vehicles, progressively more challenging Consumer Average Fuel Economy Standards (“CAFE") and carbon dioxide emission regulations, and a desire on the part of the global automotive industry to provide a broader selection of highly fuel efficient vehicles.  

During the quarter ended September 30, 2012 contract services revenue increased 159 percent to $350,634 versus the comparable quarter last fiscal year due primarily to funded research activities on an onboard vehicle power generation program and our non-rare earth magnet development program.  Product sales decreased 62 percent to $845,470 versus the comparable quarter last year, primarily due to the suspension of shipments to CODA during the quarter. 

For the six months ended September, 2012 contract services revenue increased over three-fold to $716,013 from $211,849 for the comparable period last fiscal year.  The increase is primarily attributable to the application of additional resources on funded development programs.  Product sales for the six month period this fiscal year decreased 16.3 percent to $2,876,519 versus $3,437,434 for the same six month period last fiscal year.  The decrease is primarily attributable to the suspension of shipments to CODA throughout the period, partially offset by additional shipments to Audi resulting from an expansion of their A1e-tron test fleet program.

Gross profit margins on contract services for the second quarter increased to 39.1 percent versus 36.5 percent for the comparable quarter last fiscal year primarily due to improved overhead absorption.  Gross profit margins on product sales for the second quarter decreased to 38.6 percent versus 44.2 percent for the comparable quarter last fiscal year primarily due to changes in product mix. Gross profit contribution dollars decreased to $463,891 versus $1,020,541 for the same quarter last fiscal year due primarily to lower sales and reduced gross profit margins for the current quarter.

Gross profit margins on contract services for the first half of fiscal 2013 increased to 44.6 percent versus 37.8 percent for the comparable period last fiscal year primarily due to improved overhead absorption.  Gross profit margins on product sales for the first half decreased to 37.4 percent versus 44.5 percent for the comparable quarter last fiscal year primarily due to changes in product mix and reduced overhead absorption. Gross profit contribution dollars decreased to $1,394,380 versus $1,608,436 for the comparable period last fiscal year due primarily to lower sales and reduced gross profit margins for the current year period.

Production engineering expenditures decreased to $1,505,103 for the second quarter versus $1,622,163 for the comparable quarter last fiscal year.  The decrease is attributable to higher than normal product qualification and testing activities during the comparable quarter last year associated with preparations for the launch of volume production for CODA and the redeployment of certain engineering resources on funded development programs.  During the second quarter we recorded reimbursements of production engineering costs from the U.S. Department of Energy under our Grant of $965,564 representing 64.2 percent of production engineering expenditures. Reimbursements of production engineering expenditures for the comparable quarter last fiscal year were 68.5 percent.

For the six months ended September 30, 2012 production engineering expenditures decreased to $2,655,322 versus $3,196,986 for the comparable period last fiscal year.  The decrease is attributable to higher than normal product qualification and testing activities last year associated with preparations for the launch of volume production for CODA and the redeployment of certain engineering resources on funded development programs.  During the first half of the current fiscal year we recorded reimbursements of production engineering costs from the U.S. Department of Energy under our Grant of $1,730,200 representing 65.2 percent of production engineering expenditures. Reimbursements of production engineering expenditures for the comparable six month period last fiscal year were 69.8 percent.

Net loss for the quarter ended September 30, 2012 increased to $2,563,548, or $0.07 per common share, on consolidated total revenue of $1,196,104, versus a net loss of $1,586,185, or $0.04 per common share, on consolidated total revenue of $2,334,223 for the second quarter last fiscal year. The increase in net loss is primarily attributable to reduced revenue levels and higher levels of business development, marketing, legal, and recruiting and relocation costs.

Our liquidity throughout the second quarter was sufficient to meet our operating requirements. At September 30, 2012 we had cash and short-term investments totaling $7,026,434. Net cash used in operating activities and net capital expenditures for property and equipment for the six months ended September 30, 2012 were $4,902,266 and $168,444, respectively versus $4,907,801 and $250,502, respectively for the comparable period last fiscal year.  Our cash and short-term investment balances have decreased significantly over the six month period primarily due to the purchase of

19

long-lead time raw materials ordered from vendors prior to the suspension of production for CODA and the purchase of raw materials to support future deliveries to Proterra and EVI.  We do not expect to expend additional cash resources to fund our production activities for CODA when production resumes.  Rather, the reduction of inventories for CODA associated with the resumption of shipments to CODA are expected to initially generate significant increases in our cash balances until such time as new raw material purchases are required.

As the markets for electrified vehicles continue to emerge and expand into additional vehicle platforms over the next several years, we expect to experience potentially rapid growth in our revenue coincident with the introduction of electric products for our customers. We believe we have sufficient cash resources to fund our expected rate of future growth, however, if our future growth occurs at a rate higher than our expectations, our existing cash and short-term investments may not be adequate to fund our operations and we may need to raise additional capital. Otherwise, we believe our cash balances are sufficient to fund our operations for at least the next eighteen months.

Financial Condition

Cash and cash equivalents and short-term investments at September 30, 2012 were $7,026,434 and working capital (the excess of current assets over current liabilities) was $22,457,945 compared with $12,120,849 and $25,025,517, respectively, at March 31, 2012.  The decrease in cash and short-term investments is primarily attributable to higher levels of inventories, operating losses, and lower levels of accounts payable, partially offset by lower levels of accounts receivable.  The decrease in working capital is primarily attributable to operating losses and investments in property and equipment.

Accounts receivable decreased $171,377 to $4,757,740 at September 30, 2012 from $4,929,117 at March 31, 2012. The decrease is primarily due to decreased levels of product shipments during the quarter partially offset by higher levels of billings under our DOE Grant. CODA accounted for $3,838,092 of these accounts receivable at September 30, 2012, all of which were over ninety days delinquent. Many of our other customers are large well-established companies of high credit quality. Our sales are conducted through acceptance of customer purchase orders or in some cases through supply agreements. For credit qualified customers our standard terms are net 30 days. 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.  At September 30, 2012 and March 31, 2012 we had an allowance for bad debts of $127,697.  

Costs and estimated earnings on uncompleted contracts increased $105,289 to $183,665 at September 30, 2012 versus $78,376 at March 31, 2012.  The increase is due to less favorable billing terms on certain contracts in process at September 30, 2012 versus March 31, 2012.  Estimated earnings on contracts in process increased to $608,179 on contracts in process of $1,671,203 at September 30, 2012 compared to estimated earnings on contracts in process of $380,713 on contracts in process of $1,587,499 at March 31, 2012.  The increase in estimated earnings is attributable to higher expected margins on certain contracts in process at September 30, 2012.

Inventories increased $2,863,711 to $13,427,859 at September 30, 2012 principally due to higher levels of raw material and finished goods inventories, partially offset by a decrease in work-in-process inventories.  Raw material and finished goods inventories increased $2,916,466 and $229,486, respectively, primarily reflecting inventory purchases to support the CODA, EVI, BEV and Proterra production programs.  Work-in-process inventory decreased $282,241, reflecting decreased levels of low volume propulsion system builds in process at September 30, 2012.     

Prepaid expenses and other current assets increased to $622,270 at September 30, 2012 from $556,592 at March 31, 2012 primarily due to prepayments on commercial insurance policies.     

We invested $107,431 and $311,580 for the acquisition of property and equipment, before reimbursements under the DOE Grant, during the quarter and six month period ended September 30, 2012 compared to $439,389 and $1,329,245 during the comparable quarter and six month period last fiscal year.  The decrease in capital expenditures is primarily attributable to reduced renovation costs on our facility and decreased acquisitions of equipment during the quarter and six month period ended September 30, 2012 versus the comparable quarter and six month period last fiscal year.  Cash reimbursements for capital assets under the DOE Grant for the quarters and six month periods ended September 30, 2012 and September 30, 2011 were $98,991 and $143,136, and $416,123 and $1,078,743, respectively.

Patent costs decreased to $221,453 at September 30, 2012 versus $222,836 at March 31, 2012 primarily due to the systematic amortization of patent issuance costs.  Similarly, trademark costs decreased to $111,600 at September 30, 2012 versus $113,844 at March 31, 2012 primarily due to the systematic amortization of trademark costs.

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Accounts payable decreased $807,510 to $1,549,003 at September 30, 2012 from $2,356,513 at March 31, 2012, primarily due to decreased raw material purchases for CODA.  

Other current liabilities increased to $3,496,252 at September 30, 2012 from $2,329,101 at March 31, 2012. The increase is primarily attributable to higher levels ofaccrued import duties,  customer deposits and accrued payroll and employee benefits at September 30, 2012.

Short-term deferred compensation under executive employment agreements decreased to zero at September 30, 2012 from $152,007 at March 31, 2012 reflecting a severance payment made during the first quarter.

Billings in excess of costs and estimated earnings on uncompleted contracts increased $128,824 to $136,025 at September 30, 2012 from $7,201 at March 31, 2012 reflecting increased billings on certain engineering contracts in process at September 30, 2012 in advance of the performance of the associated work versus March 31, 2012.

Common stock and additional paid-in capital were $365,915 and $115,161,473, respectively, at September 30, 2012 compared to $363,562 and $114,371,106 at March 31, 2012. The increases in common stock and additional paid-in capital were primarily attributable to the issuance of shares under the Employee Stock Purchase and Stock Bonus Plans and the periodic expensing of non-cash share-based payments associated with option grants under our equity incentive plan.

Results of Operations

Quarter Ended September 30, 2012

Operations for the quarter ended September 30, 2012, resulted in a net loss of $2,563,548, or $0.07 per common share, compared to a net loss of $1,586,185, or $0.04 per common share, for the comparable quarter last year. The increase in net loss is primarily attributable to reduced revenue levels and higher levels of business development, marketing,legal, and recruiting and relocation costs.

Revenue from contract services increased to $350,634 at September 30, 2012 versus $135,547 for the comparable quarter last year.  The increase is primarily dueto funded research activities on an onboard vehicle power generation program and our non-rare earth magnet development program.

Product sales revenue for the current quarter decreased to $845,470 versus $2,198,676 for the comparable quarter last fiscal year.  The decrease is primarily due to the suspension of shipments to CODA during the quarter.

Gross profit margins for the quarter ended September 30, 2012 decreased to 38.8 percent compared to 43.7 percent for the quarter ended September 30, 2011. Gross profit margin on contract services was 39.1 percent for the second quarter this fiscal year compared to 36.5 percent for the quarter ended September 30, 2011. The improvement is primarily due to improved overhead absorption on contracts in process at September 30, 2012 versus the comparable quarter last fiscal year. Gross profit margin on product sales for the second quarter this year decreased to 38.6 percent compared to 44.2 percent for the second quarter last year primarily due to changes in product mix. 

Research and development expenditures for the quarter ended September 30, 2012 increased to $19,810 compared to $647 for the quarter ended September 30, 2011 reflecting increased levels of cost-sharing on government research programs.

Production engineering costs were $1,505,103 for the second quarter versus $1,622,163 for the comparable quarter last fiscal year. The decrease is attributable to higher than normal product qualification and testing activities during the comparable quarter last year associated with preparations for the launch of volume production for CODA and the redeployment of certain engineering resources on funded development programs.

Reimbursement of product qualification and testing costs under the DOE Grant was $965,564 for the quarter ended September 30, 2012 versus $1,111,034 for the comparable quarter last fiscal year reflecting a reduction in the estimated reimbursement ratesfor product qualification and testing activities and decreased qualified production engineering costs.

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Selling, general and administrative expense for the quarter ended September 30, 2012 was $2,472,653 compared to $2,099,025 for the same quarter last year.  The increase is primarily attributable to higher levels of business development, marketing,  legal andrecruiting and relocation costs versus the comparable quarter last fiscal year.

Interest income increased to $2,260 for the quarter ended September 30, 2012 versus $641 for the same quarter last fiscal year.  The increase is attributable to higher yields on invested cash balances.

Six Months Ended September 30, 2012

Operations for the six month period ended September 30, 2012, resulted in a net loss of $3,850,982, or $0.11 per common share, compared to a net loss of $2,629,728, or $0.07 per common share, for the comparable period last year.  The increase in net loss is primarily attributable to decreased levels of product shipments andhigher levels of business development, marketing, legal and recruiting and relocation costs partially offset by lower levels of net production engineering expenses.

Revenue from contract services increased to $716,013 for the six month period ended September 30, 2012 versus $211,849 for the comparable period last year.  The increase is primarily attributable to the application of additional engineering resources on funded development programs.

Product sales for the six month period ended September 30, 2012 decreased to $2,876,519 compared to $3,437,434 for the comparable period last year. The decrease is primarily attributable to the suspension of shipments to CODA throughout the period, partially offset by additional shipments to Audi resulting from an expansion of their A1e-tron test fleet program.

Gross profit margins for the six month period ended September 30, 2012 decreased to 38.8 percent compared to 44.1 percent for the comparable six month period last fiscal year. Gross profit margin on contract services increased for the six month period to 44.6 percent versus 37.8 percent for the comparable six month period last fiscal year primarily due to improved overhead absorption. Gross profit margin on product sales for the six month period ended September 30, 2012 decreased to 37.4 percent compared to 44.5 percent for the comparable period last year. The decrease is primarily due to changes in product mix and reduced overhead absorption.

Research and development expenditures for the six month period ended September 30, 2012 increased to $32,457 compared to $4,810 for the same period last year reflectingincreased levels of cost-sharing on government research programs.

Production engineering costs were $2,655,322 for the six month period ended September 30, 2012 versus $3,196,986 for the comparable six month period last year. The decrease is attributable to higher than normal product qualification and testing activities during the prior comparable six month period associated with preparations for the launch of volume production for CODA and the redeployment of certain engineering resources on funded development programs.

Reimbursements of costs under the DOE Grant were $1,730,200 for the six months ended September 30, 2012 versus $2,232,670 for the comparable period last year reflecting a reduction in the estimated reimbursement ratesfor product qualification and testing activities and decreased qualified production engineering costs.

Selling, general and administrative expense for the six month period ended September 30, 2012 was $4,295,500 compared to $3,288,628 for the same period last year.  The increase is primarily attributable higher levels of business development, marketing, legal andrecruiting and relocation costsversus the comparable period last fiscal year.

Interest income decreased to $5,006 for the six month period ended September 30, 2012 versus $15,895 for the comparable period last year.  The decrease is attributable to lower yields and lower levels of invested cash balances.

Liquidity and Capital Resources

Our cash balances and liquidity throughout the quarter ended September 30, 2012 were adequate to meet operating needs.  At September 30, 2012, we had working capital (the excess of current assets over current liabilities) of $22,457,945 compared to $25,025,517 at March 31, 2012.  

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For the six month period ended September 30, 2012, net cash used in operating activities was $4,902,266 compared to net cash used in operating activities of $4,907,801 for the comparable period last fiscal year.  The decrease in cash used for the first half this fiscal year is primarily attributable to decreased levels of cash used for prepaid expenses and deferred compensation under executive employment agreements partially offset by higher operating losses and an increase in inventory purchases during the current period.

Net cash provided by investing activities for the first half this fiscal year was $52,730 compared to cash provided by investing activities of $1,128,724 for the comparable period last fiscal year.  The change for the six month period ended September 30, 2012 was primarily due to decreased levels of short-term investment maturities net of purchases partially offset by lower levels of capital expenditures, net of DOE Grant reimbursements.

Net cash used in financing activities for the six month period ended September 30, 2012 was $7,957 compared to net cash provided by financing activities of $10,618 for the comparable quarter last fiscal year.  The increase in cash used was primarily attributable to higher levels of treasury stock purchased and retired during the current six month period offset by higher levels of proceeds from share issuances under our Employee Stock Purchase Plan.

Our cash and short-term investment balances have decreased significantly over the last several quarters primarily due to the purchase of raw materials for the CODA production launch.  We do not expect to expend additional cash resources to fund our production activities for CODA over the short-term. Rather, the reduction of inventories for CODA associated with the resumption of shipments are expected to initially generate significant increases in our cash balances until such time as new raw material purchases are required.

We expect to fund our operations over the next year from existing cash and short-term investment balances, from proceeds received from the sale of our former facility, when the sale is completed and from available bank financing, if any.  We may need to invest greater financial resources on the commercialization of our products, including a significant increase in human resources and increased expenditures for equipment and tooling.  These capital requirements may be substantially reduced by reimbursements from the Company’s Grant from the DOE which reimburses 50 percent of qualified capital costs.  We do not currently expect any significant additional working capital requirements for the CODA program as they ramp to higher volumes.

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.  In addition, our $45.1 million DOE Grant requires us to provide matching funds of 50 percent on all qualifying expenditures under the Grant.  As of September 30, 2012 we have received credit from the DOE for matching funds of $32 million, and we have an obligation under our DOE Grant to demonstrate our ability to provide additional matching funds of $13.1 million on or before July 12, 2013.  We do not currently have sufficient funds to meet this potential future funding requirement.  If we do not extend or modify this requirement or secure such funds, we must submit by such date, a funding plan to obtain the remainder of such funds which is acceptable to the DOE or the Grant may be terminated.

If our existing financial resources are not sufficient to execute our business plan, including meeting future funding requirements under the DOE Grant, 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 eighteen months.

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Contractual Obligations

The following table presents information about our contractual obligations and commitments as of September 30, 2012:

				Payments due by Period
			Less Than						More than
	Total		1 Year		2 - 3 Years		4 - 5 Years		5 Years
Purchase obligations (1)	$	12,955,317		12,955,317		-		-		-
Executive employment agreements (2)		602,081		-		524,000		-		78,081
Total	$	13,557,398		12,955,317		524,000		-		78,081

(1)	Primarily consists of blanket purchase orders for materials which are generally cancellable.  In the event these orders are cancelled, we may incur cancellation charges.  In addition, our supply agreement with CODA provides for the reimbursement by CODA of commercially reasonable purchases of material by us to support their production plan.
(2)	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.

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, 2012 describes the significant accounting policies and methods used in the preparation of the consolidated financial statements.  Estimates are used for, but not limited to, allowance for doubtful accounts receivables, costs to complete contracts, the recoverability of inventories, the fair value of financial and long-lived assets and in the establishment of provisional billing rates on certain government contracts.  Actual results could differ materially from these estimates.  The following critical accounting policies are impacted significantly by judgments, assumptions and estimates used in preparation of the consolidated financial statements.

Accounts Receivable

Our trade accounts receivable are subject to credit risks associated with the financial condition of our customers and their liquidity. We evaluate all customers periodically to assess their financial condition and liquidity and set appropriate credit limits based on this analysis. As a result, the collectability of accounts receivable may change due to changing general economic conditions and factors associated with each customer’s particular business.  Because substantially all of our customers are large well-established companies with excellent credit worthiness, we have not historically established a reserve for potentially uncollectible trade accounts receivable. However, during the fiscal year ended March 31, 2012 we established an allowance for bad debts of $127,697, principally due to the bankruptcy filing of Saab. In light of current economic conditions we may need to maintain an allowance for bad debts in the future. It is also reasonably possible that future events or changes in circumstances could cause the realizable value of our trade accounts receivable to decline materially, resulting in material losses.  At September 30, 2012 the allowance for bad debts remained at $127,697.  

Inventories

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 inventory for potential impairment of value based on then available information, expectations and estimates and establish impairment reserves for estimated declines in the realizable value of our inventories.  The actual realizable value of our inventories may differ materially from these

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estimates based on future occurrences.  It is reasonably possible that future events or changes in circumstances could cause the realizable value of our inventories to decline materially, resulting in additional material impairment losses. 

Percentage of Completion Revenue Recognition on Long-term Contracts: Costs and Estimated Earnings in Excess of Billings onUncompleted Contracts

We recognize revenue on development projects funded by our customers using the percentage-of-completion method.  Under this method, contract services revenue is based on the percentage that costs incurred to date bear to management’s best estimate of the total costs to be incurred to complete the project.  Many of these contracts involve the application of our technology to customers’ products and other applications with demanding specifications. Management’s best estimates have sometimes been adversely impacted by unexpected technical challenges requiring additional analysis and redesign, failure of electronic components to operate in accordance with manufacturers published performance specifications, unexpected prototype failures requiring the purchase of additional parts and a variety of other factors that may cause unforeseen delays and additional costs. It is reasonably possible that total costs to be incurred on any of the projects in process at September 30, 2012 could be materially different from management’s estimates, and any modification of management’s estimate of total project costs to be incurred could result in material changes in the profitability of affected projects or result in material losses on any affected projects.

Fair Value Measurements and Asset Impairment

Some of our assets and liabilities may be subject to analysis as to whether the asset or liability should be marked to fair value and some assets may be evaluated for potential impairment in value.  Fair value estimates and judgments may be required by management for those assets that do not have quoted prices in active markets.  These estimates and judgments may include fair value determinations based upon the extrapolation of quoted prices for similar assets and liabilities in active or inactive markets, for observable items other than the asset or liability itself, for observable items by correlation or other statistical analysis, or from our assumptions about the assumptions market participants would use in valuing an asset or liability when no observable market data is available.  Similarly, management evaluates both tangible and intangible assets for potential impairments in value.  In conducting this evaluation, management may rely on a number of factors to value anticipated future cash flows including operating results, business plans and present value techniques. Rates used to value and discount cash flows may include assumptions about interest rates and the cost of capital at a point in time. There are inherent uncertainties related to these factors and management’s judgment in applying them to the analysis of asset impairment.  Changes in any of the foregoing estimates and assumptions or a change in market conditions could result in a material change in the value of an asset or liability resulting in a material adverse change in our operating results.

Cost-Sharing and Cost-Plus Type Contracts

Some of our business with the U.S. Government and prime contractors is performed under cost-sharing of cost-plus- fixed-fee type contracts.  These contracts provide for the reimbursement of costs, to the extent allocable and allowable under applicable government regulations.  Typically, billings under these contracts are based on provisional rates, which are estimates of the actual costs expected to be incurred during the relevant period of performance.  The final amounts qualified for reimbursement are determined in arrears, typically annually, based on the actual costs incurred during the relevant period of performance.  The final costs eligible for reimbursement under these contracts may differ materially from the provisional rates.  If actual costs incurred are less than the amounts estimated through provisional rates, we will be obligated to return any excess of provisional payments over final qualified costs, which could have a material adverse impact on our operating results and liquidity. 

New Accounting Pronouncements

As of September 30, 2012 there were no new accounting pronouncements expected to significantly impact our consolidated financial statements, results of operations, or cash flows.

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ITEM 3. QUANTITATIVE 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. 

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 Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. 

As of September 30, 2012, we performed an evaluation under the supervision and with the participation of our management, including 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 September 30, 2012.

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PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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.

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.

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

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

	Fiscal Year Ended March 31,
	2012		2011		2010
Net loss	$	4,928,520	$	1,992,358	$	4,140,872

As of September 30, 2012 and March 31, 2012 we had accumulated deficits of $84,337,971 and $80,486,989, 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 may continue to incur net losses.  

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 September 30, 2012 was $2,563,548 versus a net loss for the comparable quarter last fiscal year of $1,586,185. Our net loss for the fiscal year ended March 31, 2012 was $4,928,520 versus a net loss for the fiscal years ended March 31, 2011 and 2010 of $1,992,358 and $4,140,872, respectively. At September 30, 2012, our cash and short-term investments totaled $7,026,434.  We may continue to incur net losses. Our existing cash resources, together with funding expected from our ARRA Grant should be sufficient to complete our business plan for at least the next eighteen 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.

CODA is currently delinquent in paying us for motors already delivered to them and may not purchase from us all of the 20,000 systems provided for under our Supply Agreement with them.

We have executed a Supply Agreement with CODA that provides a framework for CODA, or their manufacturing partner, to purchase from us 20,000 electric propulsion systems for use in automobiles to be manufactured by CODA during the initial two-year term of the agreement. Under the terms of this agreement, CODA is required to issue blanket purchase orders covering their annual purchase requirements and specifying the timing of delivery for such units, with a portion of the delivery schedule considered to be "firm" and noncancellable. CODA has slowed the launch of their vehicles. Due to the slower launch rate, we suspended production for CODA to properly balance our inventories and we did not ship any propulsion systems to CODA during the quarter and six month period ended September 30, 2012. At September 30, 2012 we had inventories purchased for CODA under the terms of the Supply Agreement and trade accounts receivable totaling $14,473,809. At September 30, 2012, CODA was more than ninety

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days delinquent in the payment of their trade accounts receivable of $3,838,092 for motors already delivered to CODA. We are uncertain as to whether CODA has the financial resources to pay amounts owed to us. CODA has announced that they are seeking additional capital. We are uncertain as to the ability of CODA to pay amounts owed to us if they are unsuccessful in raising this capital or even if they secure funds when they will pay us.

Under the terms of the Supply Agreement a substantial portion of this inventory to support our production to CODA is subject to reimbursement from CODA if they do not use the inventory purchased on their behalf. In addition, if CODA, or their manufacturing partner, do not purchase at least 15,000 units under the CODA Supply Agreement, CODA may be required to make specific payments to us. For example, if CODA is unsuccessful in the development of their electric automobile, CODA would not be obligated to purchase electric propulsion systems from us, but CODA would then be obligated to make the payments specified in the contract to us. While these specific payments would cover much of our inventory and capital costs incurred to supply electric propulsion systems to CODA, the payments are substantially less than the amount we would receive for sales of systems under the Supply Agreement. In addition, as disclosed above, CODA may not have adequate funds to make any such payments to us or may otherwise contest their obligation to pay, and as a result it is possible that we may never receive any such funds. CODA may also terminate the Supply Agreement for any number of reasons. If CODA does not honor its obligations to us under the terms of the Supply Agreement, it could have a material adverse effect on our financial position, liquidity and results of operations.

We may experience challenges in launching production of electric propulsion systems on the scale envisioned under the CODA supply agreement.

Although we have installed and qualified production lines and begun production on these lines, we have not ever produced electric propulsion systems on the scale necessary to fulfill our obligations under the CODA Supply Agreement. We also may need to hire additional personnel as production volumes for CODA increase. We may encounter difficulties and challenges in ramping-up our operations. If we are unable to successfully increase our production volumes coincident with CODA’s delivery requirements we could breach our Supply Agreement. If any such difficulties are encountered during production launch it could have a material adverse effect on our financial condition and results of operations.  

If we do not satisfy the terms of our U.S. Department of Energy Grant, we may not receive all or any portion of the $45.1 million Grant we were awarded and may be required to return amounts already paid to us under the Grant.

We have a $45.1 million Grant under the American Recovery and Reinvestment Act's Electric Drive Vehicle Battery and Component Manufacturing Initiative with the U.S. Department of Energy. We have received funding of $16.5 million under this Grant as of March 31, 2012. This Grant is subject to terms and conditions specified in the agreement between us and the DOE. We are required to make a cash investment on a dollar-for-dollar matching basis to receive funds under this Grant. If we are unable to match the total amount of the $45.1 million Grant with funding from non-Federal sources, we will be unable to take advantage of the entire award, and could become ineligible for 

continued participation in the program. The reimbursement of qualified costs under the award is currently limited to $32.0 million. On or before July 12, 2013, we are required to provide to the DOE an updated total estimated cost of the project along with firm commitments to fund our 50 percent share of the total estimated cost of the project above the $32.0 million of matching funds we have previously received credit for. If an extension or modification of this requirement has not occurred or all such funds have not been secured, we must submit, by such date, a funding plan to obtain the remainder of such funds, which is acceptable to the DOE, or the Grant may be terminated. In addition, the award may be terminated at any time at the convenience of the government. Although we expect to satisfy the requirement in the Grant, we cannot assure that this requirement will be satisfied and the contract will not be terminated prior to receiving all of the proceeds.

Our revenue is highly concentrated among a small number of customers.

A large percentage of our revenue is typically derived from a small number of customers, and we expect this trend to continue and intensify as production under the CODA Supply Agreement increases. CODA may become the source of a substantial portion of our revenue in at least the near-term. The magnitude of this revenue is dependent on CODA's ability to introduce and sell its passenger vehicle in commercial volumes.

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Our customer arrangements generally are non-exclusive, have no long-term volume commitments and are often done on a purchase order basis. We cannot be certain that customers that have accounted for significant revenue in past periods will continue to purchase our products. Accordingly, our revenue and results of operations may vary substantially from period to period. We are also subject to credit risk associated with the concentration of our accounts receivable from our customers. If one or more of our significant customers were to cease doing business with us, significantly reduce or delay its purchases from us or fail to pay us on a timely basis, our business, financial condition and results of operations could be materially adversely affected.  

Our business relies on third parties, whose success we cannot predict.

As a manufacturer of motors, generators, and other component parts, our business model depends on the ability of third parties in our industry to develop, produce and market products that include or are compatible with our technology and then to sell these products into the marketplace. Our ability to generate revenue depends significantly on the commercial success of our customers and partners. Failure of these third parties to achieve significant sales of products incorporating our products and fluctuations in the timing and volume of such sales could have a material adverse effect on our business, financial condition and results of operations.  

Our electric propulsion systems use rare earth minerals and unavailability or limited supply of these minerals could prevent us from manufacturing our products in production quantities or increase our costs.

Neodymium, a rare earth mineral, is a key ingredient used in the production of magnets that are a component of our electric propulsion systems. We currently source our magnets from China, and China has indicated its intent to retain more of this mineral for the use of Chinese companies, rather than exporting it. These policies have adversely affected the price we pay for magnets from our Chinese supplier.  Although neodymium iron boron magnets are available from other sources, these alternative sources generally rely on neodymium purchased from China. These Chinese government policies could adversely affect our ability to obtain magnets in sufficient quantities, or in a timely manner, to meet our production plans. In the event that China's actions further reduce supply or cause additional price escalation, these factors could prevent us from manufacturing our products in production quantities, cause our products to be non-competitive or cause an increase in our production costs thereby reducing our profit margin on electric propulsion systems if we are unable to pass the increase in our production costs on to our customers.

Some of our contracts can be cancelled with little or no notice and could restrict our ability to commercialize our technology.

Our contracts with government agencies are subject to the risk of termination at the convenience of the contracting agency and in some cases grant "march-in" rights to the government. March-in rights are the right of the United States government or the applicable government agency, under limited circumstances, to exercise a non-exclusive, royalty-free, irrevocable worldwide license to any technology developed under contracts funded by the government to facilitate commercialization of technology developed with government funding. March-in rights can be exercised if we fail to commercialize the developed technology. The exercise of march-in rights by the government or an agency of the government could restrict our ability to commercialize our technology.

Some of our orders for the future delivery of products are placed under blanket purchase orders which may be cancelled by our customers at any time. The amount payable to us, if any, upon cancellation by the customer varies by customer. Accordingly, we may not recognize as revenue all or any portion of the amount of outstanding order backlog we have reported.  

We face intense competition and may be unable to compete successfully.

In developing electric motors for use in vehicles and other applications, we face competition from very large domestic and international companies, including the world's largest automobile manufacturers. Many of our competitors have far greater resources to apply to research and development efforts than we have, and they may independently develop motors that are technologically more advanced than ours. These competitors also have much greater experience in and resources for marketing their products. For these reasons, potential customers may choose to purchase electric motors from our competitors rather than from us. In addition, the U.S. government has awarded substantial financial grants under the stimulus bill to several large companies who compete with us. To the extent that some of these competitors received awards under the stimulus bill in amounts greater than we have, could adversely impact our ability to compete.  

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Our business depends, in part, on the expansion of the market for hybrid electric vehicles and the future introduction and growth of a market for all-electric vehicles.

Although our electric propulsion systems may be used in a wide variety of products, the market for electric and hybrid vehicles is fairly new. At the present time, batteries used to power electric motors have limited life and require several hours to charge, and charging stations for electric motors are not widely available. Electric and hybrid vehicles also tend to be priced higher than comparable gasoline-powered vehicles. As a result, consumers may experience concerns about driving range limitations, battery charging time and higher purchase costs of electric or hybrid automobiles. If consumer preferences shift to vehicles powered by other alternative methods, or if concerns about the availability of charging stations cannot be overcome, the market for all-electric cars, and therefore our electric propulsion systems, may be limited. In addition, our electric propulsion systems are incorporated in buses used for mass transit in several U.S. cities. If passenger traffic in these mass transit systems declines or government funding to transportation districts declines from current levels, demand for our products may also decrease.

The popularity of alternative fuel based vehicles and “green energy” initiatives are highly dependent on macro-economic conditions, including oil prices and the overall health of the economy. When oil prices fall, interest in and resources allocated to the development of advanced technology vehicles and propulsion systems may diminish. Downturns in the world economy may also have a severe impact on the automotive industry, slowing the demand for vehicles generally and reducing consumers' willingness to pay more for environmentally friendly technology.  

If our products do not achieve market acceptance, our business may not grow.

Although we believe our proprietary systems are suited for a wide-range of vehicle electrification applications, our business and financial plan relies heavily on the introduction of new products that have limited testing in the marketplace. We are currently making substantial investments in human resources, manufacturing facilities and equipment, production and application engineering, among other things, to ramp up our production capacity in order to capitalize on the anticipated expansion in demand for electric propulsion systems and generators in the automobile and light truck markets. Our sales of electric propulsion systems and generators in the automobile and light truck markets to date have consisted of limited quantities of production and field test units. We are not certain that our existing products will achieve broad market acceptance, or that we will be able to develop new products or product enhancements that will achieve broad market acceptance.

Changes in environmental policies could hurt the market for our products.

The market for electric and other alternative fuel vehicles and equipment and the demand for our products are influenced, to a degree, by federal, state and local regulations relating to air quality, greenhouse gases and pollutants. These laws and regulations may change, which could result in transportation or equipment manufacturers abandoning or delaying their interest in electric or hybrid electric vehicles or equipment. In addition, a failure by authorities to enforce current laws and regulations or to adopt additional environmental laws or regulations could limit the demand for our products.

Although many governments have identified as a significant priority the development of alternative energy sources, governments may change their priorities, and any change they make could materially affect our revenue or the development of our products. 

If we are unable to protect our patents and other proprietary technology, we will be unable to prevent third parties from using our technology, which would impair our competitiveness and ability to commercialize our products. In addition, the cost of enforcing our proprietary rights may be expensive and result in increased losses.  

Our ability to compete effectively against other companies in our industry will depend, in part, on our ability to protect our proprietary technology. Although we have attempted to safeguard and maintain our proprietary rights, we do not know whether we have been or will be successful in doing so. We have historically pursued patent protection in the United States and a limited number of foreign countries where we believe significant markets for our products exist or where potentially significant competitors have operations. It is possible that a substantial market could develop in a country where we have not received patent protection and under such circumstances our proprietary products would not be afforded legal protection in these markets. Further, our competitors may independently develop or patent

30

technologies that are substantially equivalent or superior to ours. We cannot assure that additional patents will be issued to us or, if they are issued, as to the scope of their protection. Patents granted may not provide meaningful protection from competitors. Even if a competitor's products were to infringe patents owned by us, it would be costly for us to pursue our rights in an enforcement action, it would divert funds and resources which otherwise could be used in our operations and we may not be successful in enforcing our intellectual property rights. In addition, effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country where we may operate or sell our products in the future. If third parties assert technology infringement claims against us, the defense of the claims could involve significant legal costs and require our management to divert time and attention from our business operations. If we are unsuccessful in defending any claims of infringement, we may be forced to obtain licenses or to pay royalties to continue to use our technology. We may not be able to obtain any necessary licenses on commercially reasonable terms or at all. If we fail to obtain necessary licenses or other rights, or if these licenses are costly, our results of operations may suffer either from reductions in revenues through our inability to serve customers or from increases in costs to license third-party technologies.  

Use of our motors in vehicles could subject us to product liability claims or product recalls, and product liability insurance claims could cause an increase in our insurance rates or could exceed our insurance limits, which could impair our financial condition, results of operations and liquidity.  

The automotive industry experiences significant product liability claims. As a supplier of electric propulsion systems or other products to vehicle or Original Equipment Manufacturers (“OEM”), we face an inherent business risk of exposure to product liability claims in the event that our products, or the equipment into which our products are incorporated, malfunction and result in personal injury or death. We may be named in product liability claims even if there is no evidence that our systems or components caused an accident. Product liability claims could result in significant losses as a result of expenses incurred in defending claims or the award of damages. The sale of systems and components for the transportation industry entails a high risk of these claims, which may increase as our production and sales increase. In addition, we may be required to participate in recalls involving these systems if any of our systems prove to be defective, or we may voluntarily initiate a recall or make payments related to such claims as a result of various industry or business practices or the need to maintain good customer relationships.

We carry product liability insurance of $10 million covering most of our products. If we were to experience a large insured loss, it might exceed our coverage limits, or our insurance carriers could decline to further cover us or raise our insurance rates to unacceptable levels, any of which could impair our financial position and results of operations. Any product liability claim brought against us also could have a material adverse effect on our reputation.  

We may be subject to warranty claims, and our provision for warranty costs may not be sufficient.  

We may be subject to warranty claims for defects or alleged defects in our products, and the risk of such claims arising will increase as our production and sales increase. In addition, in response to consumer demand, vehicle manufacturers have been providing, and may continue to provide, increasingly longer warranty periods for their products. As a consequence, these manufacturers may require their suppliers, such as us, to provide correspondingly longer product warranties. As a result, we could incur substantially greater warranty claims in the future.  

ITEM 6. EXHIBITS

(a) Exhibits

31.1Certification of Chief Executive Officer

31.2Certification of Chief Financial Officer

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

31

	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:  October 25,  2012
	/s/ DONALD A.  FRENCH
	Donald A. French
	Treasurer
	(Principal Financial and
	Accounting Officer)

32

EX-31.(A)

Exhibit 31.1

Certification

I, Eric R. Ridenour, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of UQM Technologies, Inc.:

2. Based on my knowledge, this Report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d. Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:  October 25, 2012	/s/ ERIC RRIDENOUR
	Eric R. Ridenour
	President and Chief Executive Officer

EX-31.(B)

Exhibit 31.2

Certification

I, Donald A. French, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of UQM Technologies, Inc.:

2. Based on my knowledge, this Report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d. Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:  October 25, 2012	/s/ DONALD A.  FRENCH
	Donald A. French
	Treasurer, Secretary and
	Chief Financial Officer

EX-32

Exhibit 32.1  

CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of UQM Technologies, Inc. (the “Company”) on Form 10-Q for the quarterly period endedSeptember 30, 2012as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:  1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ERIC RRIDENOUR

     Eric R. Ridenour     

    President and Chief Executive Officer

/s/ DONALD A.  FRENCH

    Donald A. French

    Treasurer, Secretary and Chief Financial Officer

Date:  October 25, 2012

Exhibit 32.1  

XML

Inventories (Schedule Of Inventories) (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Inventories [Abstract]
Raw materials	$ 10,106,396	$ 7,189,930
Work-in-process	428,362	710,603
Finished products	2,893,101	2,663,615
Inventories, Total	$ 13,427,859	$ 10,564,148

XML

Fair Value Measurements (Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation) (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Fair Value Measurements [Abstract]
Balance at beginning of period	$ 589,242	$ 614,381	$ 715,107	$ 1,316,372
Transfers into Level 3
Transfers out of Level 3
Total gains or losses included in earnings	12,839	17,810	38,981	55,019
Total gains or losses included in other comprehensive income
Settlements			(152,007)	(739,200)
Balance at the end of period	$ 602,081	$ 632,191	$ 602,081	$ 632,191

XML

Fair Value Measurements (Narrative) (Details) (Significant Unobservable Inputs (Level 3) [Member])	6 Months Ended
	Sep. 30, 2012
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair Value Inputs, Discount Rate	14.00%

XML

Stock-Based Compensation (Schedule Of Nonvested Share Activity) (Details) (USD $)	3 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Sep. 30, 2011	Jun. 30, 2011
Equity Incentive Plan, Non-Vested Portion [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested at Period Start, Options	691,204	668,722	472,324	475,934
Granted, Options	1,075,000	25,000	389,588
Vested, Options	(543,557)		(149,126)
Forfeited, Options	(16,985)	(2,518)	(931)	(3,610)
Non-vested at Period End, Options	1,205,662	691,204	711,855	472,324
Non-vested at Period Start, Options, Weighted-Average Grant Date Fair Value	$ 1.65	$ 1.69	$ 1.73	$ 1.73
Granted, Options, Weighted-Average Grant Date Fair Value	$ 0.89	$ 0.71	$ 1.68
Vested, Options, Weighted-Average Grant Date Fair Value	$ 1.32		$ 1.41
Forfeited, Options, Weighted-Average Grant Date Fair Value	$ 1.89	$ 1.61	$ 1.61	$ 1.79
Non-vested at Period End, Options, Weighted-Average Grant Date Fair Value	$ 0.88	$ 1.65	$ 1.77	$ 1.73
Stock Bonus Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested at Period Start, shares	120,676	167,680	62,199	62,199
Granted, shares	440,934		213,398
Vested, shares	(202,755)	(47,004)	(107,917)	0
Forfeited, shares
Non-vested at Period End, shares	358,855	120,676	167,680	62,199
Non-vested at Period Start, Weighted-Average Grant Date Fair Value	$ 2.42	$ 2.44	$ 2.50	$ 2.50
Granted, Weighted-Average Grant Date Fair Value	$ 0.87		$ 2.34
Vested Weighted-Average Grant Date Fair Value	$ 1.17	$ 2.49	$ 2.28	$ 0.00
Forfeited Weighted-Average Grant Date Fair Value
Non-vested at Period End, Weighted-Average Grant Date Fair Value	$ 1.22	$ 2.42	$ 2.44	$ 2.50

XML

Contracts In Process (Tables)

6 Months Ended

Sep. 30, 2012

Contracts In Process [Abstract]

Summary Of Contract In Process

	September 30, 2012		March 31, 2012
Costs incurred on uncompleted contracts	$	1,063,024		1,206,786
Estimated earnings		608,179		380,713
		1,671,203		1,587,499
Less billings to date		(1,623,563)		(1,516,324)
	$	47,640		71,175
Included in the accompanying balance sheets as follows:
Costs and estimated earnings in excess of billings on
uncompleted contracts	$	183,665		78,376
Billings in excess of costs and estimated earnings on
uncompleted contracts		(136,025)		(7,201)
	$	47,640		71,175

XML

Other Current Liabilities (Schedule Of Other Current Liabilities) (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Other Current Liabilities [Abstract]
Accrued payroll and employee benefits	$ 248,695	$ 206,919
Accrued personal property and real estate taxes	248,500	229,470
Accrued warranty costs	151,261	154,978
Unearned revenue	1,928,486	1,705,715
Accrued royalties	48,336	31,493
Accrued import duties	813,740
Other	57,234	526
Other current liabilities, Total	$ 3,496,252	$ 2,329,101

XML

Contracts In Process (Narrative) (Details)	6 Months Ended	12 Months Ended
	Sep. 30, 2012	Mar. 31, 2012
Expected collection period of accounts receivable	60 days
Maximum [Member]
Estimated Period To Complete Contracts In Process, Maximum	4 months	10 months
Minimum [Member]
Estimated Period To Complete Contracts In Process, Minimum	1 month	1 month

XML

Fair Value Measurements (Liabilities Measured At Fair Value On A Recurring Basis) (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation under executive employment agreements	$ 602,081	$ 715,107
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation under executive employment agreements	$ 602,081	$ 715,107

XML

Stock-Based Compensation

6 Months Ended

Sep. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(3)  Stock-Based Compensation

Stock Option Plans

As of September 30, 2012, we had zero shares of common stock available for future grant to employees, consultants and key suppliers under our 2012 Equity Incentive Plan (“2012 Plan”). The term of the 2012 Plan is ten years. Under the 2012 Plan, the exercise price of each option is set at the fair value of the common stock on the date of grant and the maximum term of the option is ten years from the date of grant. Options granted to employees generally vest ratably over a three-year period. The maximum number of underlying shares that may be granted to an employee under the Plan in any calendar year is 500,000. Forfeitures under the Plan are available for re-issuance at any time prior to expiration of the Plan in 2022. Options granted under the Plan to employees require the option holder to abide by certain Company policies, which restrict their ability to sell the underlying common stock. Prior to the adoption of the 2012 Plan, we issued stock options under our 2002 Equity Incentive Plan. Forfeitures under the 2002 Equity Incentive Plan may not be re-issued.

Non-Employee Director Stock Option Plan

In February 1994, our Board of Directors ratified a Stock Option Plan for Non-Employee Directors (“Directors Plan”) pursuant to which Directors may elect to receive stock options in lieu of cash compensation for their services as directors. As of September 30, 2012, we had 231,565 shares of common stock available for future grant under the Directors Plan. Option terms range from three to ten years from the date of grant. Option exercise prices are equal to the fair value of the common shares on the date of grant. Options granted under the plan generally vest immediately. Forfeitures under the Directors Plan are available for re-issuance at a future date.

Stock Purchase Plan

We have established a Stock Purchase Plan under which eligible employees may contribute up to ten percent of their compensation to purchase shares of our common stock at 85 percent of the fair market value at specified dates. At September 30, 2012 we had 428,785 shares of common stock available for issuance under the Stock Purchase Plan. During the quarters and six month periods ended September 30, 2012 and 2011, we issued 141 and 523, and 26,836 and 11,497 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 and six month periods ended September 30, 2012 and 2011 was $172 and $1,375, and $32,473 and $22,994, respectively.   

Stock Bonus Plan

We have a Stock Bonus Plan (“Stock Plan”) administered by the Board of Directors. As of September 30, 2012 there were 509,386 shares of common stock available for future grant under the Stock Plan. Under the Stock Plan, shares of common stock may be granted to employees, key consultants, and directors who are not employees as additional compensation for services rendered. Vesting requirements for grants under the Stock Plan, if any, are determined by the Board of Directors at the time of grant. There were 440,934 shares granted under the Stock Plan during both the quarter and six month period ended September 30, 2012, and 213,398 shares granted under the Stock Plan during both the quarter and six month period ended September 30, 2011.

We use the straight-line attribution method to recognize share-based compensation costs over the requisite service period of the award. Options granted by us generally expire ten years from the grant date. Options granted to existing and newly hired employees generally vest over a three-year period from the date of the grant. The exercise price of options is equal to the market price of our common stock (defined as the closing price reported by the NYSE MKT) on the date of grant.

We use the Black-Scholes-Merton option pricing model for estimating the fair value of stock option awards. The table below shows total share-based compensation expense for the quarters and six month periods ended September 30, 2012 and 2011 and the classification of these expenses:

	Quarter Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Costs of contract services	$	4,774		5,430		10,301		8,877
Costs of product sales		11,089		22,885		21,836		42,861
Research and development		792		22		1,305		47
Production engineering		48,041		54,379		78,596		98,027
Selling, general and administrative		535,140		475,822		688,639		499,813
	$	599,836		558,538		800,677		649,625

Share-based compensation capitalized in inventories was insignificant in the quarters and six month periods ended September 30, 2012 and September 30, 2011.

We adjust share-based compensation on a quarterly basis for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments in the quarters and six month periods ended September 30, 2012 and 2011 was insignificant.

All options/shares granted under the Non-Employee Director Stock Option Plan /Directors Plan are vested.

A summary of the status of non-vested shares under the 2012 Plan and its predecessor plan as of September 30, 2012 and 2011 and changes during the quarters and six month periods ended September 30, 2012 and 2011 are presented below:

	Six Months Ended September 30, 2012			Six Months Ended September 30, 2011
		Weighted-Average			Weighted-Average
	Shares Under	Grant Date		Shares Under	Grant Date
	Option	Fair Value		Option	Fair Value
Non-vested at April 1	668,722	$	1.69	475,934	$	1.73
Granted	25,000	$	0.71	-	$	-
Vested	-	$	-	-	$	-
Forfeited	(2,518)	$	1.61	(3,610)	$	1.79
Non-vested at June 30	691,204	$	1.65	472,324	$	1.73
Granted	1,075,000	$	0.89	389,588	$	1.68
Vested	(543,557)	$	1.32	(149,126)	$	1.41
Forfeited	(16,985)	$	1.89	(931)	$	1.61
Non-vested at September 30	1,205,662	$	0.88	711,855	$	1.77

As of September 30, 2012, there was $898,902 of total unrecognized compensation costs related to stock options granted under the 2012 Plan and its predecessor plan. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 29 months. The total fair value of stock options that vested during both the quarter and six month period ended September 30, 2012 was $719,857. The total fair value of stock options that vested during both the quarter and six month period ended September 30, 2011 was $209,581.  

A summary of the non-vested shares under the Stock Bonus Plan as of September 30, 2012 and 2011 and changes during the quarters and six month periods ended September 30, 2012 and 2011 are presented below:

	Six Months Ended September 30, 2012			Six Months Ended September 30, 2011
		Weighted-Average			Weighted-Average
	Shares Under	Grant Date		Shares Under	Grant Date
	Contract	Fair Value		Contract	Fair Value
Non-vested at April 1	167,680	$	2.44	62,199	$	2.50
Granted	-	$	-	-	$	-
Vested	(47,004)	$	2.49	-	$	-
Forfeited	-	$	-	-	$	-
Non-vested at June 30	120,676	$	2.42	62,199	$	2.50
Granted	440,934	$	0.87	213,398	$	2.34
Vested	(202,755)	$	1.17	(107,917)	$	2.28
Forfeited	-	$	-	-	$	-
Non-vested at September 30	358,855	$	1.22	167,680	$	2.44

As of September 30, 2012, there was $390,544 of total unrecognized compensation costs related to common stock granted under our Stock Bonus Plan. The unrecognized compensation cost at September 30, 2012 is expected to be recognized over a weighted-average period of 30 months. The total fair value of common stock granted under the Stock Bonus Plan that vested during the quarter and six month period ended September 30, 2012 was $237,904 and $354,969, respectively. The total fair value of common stock granted under the Stock Bonus Plan that vested during both the quarter and six month period ended September 30, 2011 was $245,745.   

Expected volatility is based on historical volatility. The expected life of options granted is based on historical experience.

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2012 under our 2012 Plan and its predecessor plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2012	2,782,456	$	2.81		4.0 years	$	-
Granted	25,000	$	1.03
Exercised	-	$	-			$	-
Forfeited	(2,518)	$	2.40
Outstanding at June 30, 2012	2,804,938	$	2.80		3.8 years	$	-
Granted	1,075,000	$	0.89
Exercised	-	$	-			$	-
Forfeited	(16,985)	$	2.73
Outstanding at September 30, 2012	3,862,953	$	2.27		5.2 years	$	293,500
Exercisable at September 30, 2012	2,657,290	$	2.71		3.4 years	$	49,972
Vested and expected to vest at September 30, 2012	3,804,454	$	2.28		5.2 years	$	241,164

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2011 under our 2002 Equity Incentive Plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2011	2,630,491	$	3.00		3.7 years	$	959,001
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	(6,309)	$	3.08
Outstanding at June 30, 2011	2,624,182	$	3.00		3.5 years	$	39,661
Granted	389,588	$	2.40
Exercised	-	$	-			$	-
Forfeited	(35,931)	$	3.54
Outstanding at September 30, 2011	2,977,839	$	2.92		4.1 years	$	-
Exercisable at September 30, 2011	2,265,984	$	2.94		2.9 years	$	-
Vested and expected to vest at September 30, 2011	2,937,409	$	2.92		4.0 years	$	-

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2012 under our Directors Plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2012	445,754	$	2.59		3.3 years	$	-
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	-	$	-
Outstanding at June 30, 2012	445,754	$	2.59		3.1 years	$	-
Granted	282,051	$	0.79
Exercised	-	$	-			$	-
Forfeited	(51,949)	$	2.18
Outstanding at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359
Exercisable at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359
Vested and expected to vest at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2011 under our Directors Plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2011	329,786	$	2.86		3.1 years	$	129,642
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	-	$	-
Outstanding at June 30, 2011	329,786	$	2.86		2.9 years	$	9,734
Granted	155,122	$	2.04
Exercised	-	$	-			$	-
Forfeited	(25,996)	$	2.33
Outstanding at September 30, 2011	458,912	$	2.61		3.7 years	$	-
Exercisable at September 30, 2011	458,912	$	2.61		3.7 years	$	-
Vested and expected to vest at September 30, 2011	458,912	$	2.61		3.7 years	$	-

Cash received by us upon the exercise of stock options was zero for the quarters and six month periods ended September 30, 2012 and September 30, 2011. The source of shares of common stock issuable upon the exercise of stock options is from authorized and previously unissued common shares. 

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Stockholders' Equity (Changes In Components Of Stockholders' Equity) (Details) (USD $)	3 Months Ended			6 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Class of Stock [Line Items]
Beginning balance, value	$ 33,176,733	$ 34,247,679		$ 34,247,679
Beginning balance, shares	36,415,267	36,356,177		36,356,177
Issuance of common stock under employee stock purchase plan, value	172	32,301
Issuance of common stock under employee stock purchase plan, shares	141	26,695
Purchase of treasury stock, value	(23,776)	(16,654)
Purchase of treasury stock, shares	(26,712)	(14,609)
Issuance of common stock under stock bonus plan, value	135,492
Issuance of common stock under stock bonus plan, shares	202,755	47,004
Compensation expense from employee and director stock option and common stock grants	464,344	200,841
Net loss	(2,563,548)	(1,287,434)	(1,586,185)	(3,850,982)	(2,629,728)
Ending balance, value	31,189,417	33,176,733		31,189,417
Ending balance, shares	36,591,451	36,415,267		36,591,451
Common Stock [Member]
Class of Stock [Line Items]
Beginning balance, value	364,153	363,562		363,562
Issuance of common stock under employee stock purchase plan, value	1	267
Purchase of treasury stock, value	(267)	(146)
Issuance of common stock under stock bonus plan, value	2,028	470
Ending balance, value	365,915	364,153		365,915
Additional Paid-in Capital [Member]
Class of Stock [Line Items]
Beginning balance, value	114,587,003	114,371,106		114,371,106
Issuance of common stock under employee stock purchase plan, value	171	32,034
Purchase of treasury stock, value	(23,509)	(16,508)
Issuance of common stock under stock bonus plan, value	133,464	(470)
Compensation expense from employee and director stock option and common stock grants	464,344	200,841
Ending balance, value	115,161,473	114,587,003		115,161,473
Accumulated Deficit [Member]
Class of Stock [Line Items]
Beginning balance, value	(81,774,423)	(80,486,989)		(80,486,989)
Net loss	(2,563,548)	(1,287,434)
Ending balance, value	$ (84,337,971)	$ (81,774,423)		$ (84,337,971)

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Stockholders' Equity (Tables)

6 Months Ended

Sep. 30, 2012

Stockholders' Equity [Abstract]

Changes In Components Of Stockholders' Equity

	Number of
	common				Additional				Total
	shares		Common		paid-in		Accumulated		stockholders’
	issued		stock		capital		deficit		equity
Balances at April 1, 2012		36,356,177	$	363,562		114,371,106		(80,486,989)		34,247,679
Issuance of common stock under
employee stock purchase plan		26,695		267		32,034		-		32,301
Purchase of treasury stock		(14,609)		(146)		(16,508)		-		(16,654)
Issuance of common stock under
stock bonus plan		47,004		470		(470)		-		-
Compensation expense from
employee and director stock
option and common stock grants		-		-		200,841		-		200,841
Net loss		-		-		-		(1,287,434)		(1,287,434)
Balances at June 30, 2012		36,415,267	$	364,153		114,587,003		(81,774,423)		33,176,733
Issuance of common stock under
employee stock purchase plan		141		1		171		-		172
Purchase of treasury stock		(26,712)		(267)		(23,509)		-		(23,776)
Issuance of common stock under
stock bonus plan		202,755		2,028		133,464		-		135,492
Compensation expense from
employee and director stock
option and common stock grants		-		-		464,344		-		464,344
Net loss		-		-		-		(2,563,548)		(2,563,548)
Balances at September 30, 2012		36,591,451	$	365,915		115,161,473		(84,337,971)		31,189,417

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Other Current Liabilities (Tables)

6 Months Ended

Sep. 30, 2012

Other Current Liabilities [Abstract]

Schedule Of Other Current Liabilities

	September 30, 2012		March 31, 2012
Accrued payroll and employee benefits	$	248,695		206,919
Accrued personal property and real estate taxes		248,500		229,470
Accrued warranty costs		151,261		154,978
Unearned revenue		1,928,486		1,705,715
Accrued royalties		48,336		31,493
Accrued import duties		813,740		-
Other		57,234		526
	$	3,496,252		2,329,101

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Significant Customers (Details) (USD $)	6 Months Ended				6 Months Ended		3 Months Ended		6 Months Ended				3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended				3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended	12 Months Ended
	Sep. 30, 2012 Audi [Member]	Sep. 30, 2011 Audi [Member]	Sep. 30, 2012 Audi [Member] Customer Concentration Risk [Member]	Mar. 31, 2012 Audi [Member] Customer Concentration Risk [Member]	Sep. 30, 2012 Audi [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2011 Audi [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2012 CODA Automotive [Member]	Sep. 30, 2011 CODA Automotive [Member]	Sep. 30, 2012 CODA Automotive [Member]	Sep. 30, 2011 CODA Automotive [Member]	Sep. 30, 2012 CODA Automotive [Member] Customer Concentration Risk [Member]	Mar. 31, 2012 CODA Automotive [Member] Customer Concentration Risk [Member]	Sep. 30, 2012 CODA Automotive [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2011 CODA Automotive [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2012 CODA Automotive [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2011 CODA Automotive [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2012 Meggitt (Addison), Inc. [Member]	Sep. 30, 2011 Meggitt (Addison), Inc. [Member]	Sep. 30, 2012 Meggitt (Addison), Inc. [Member]	Sep. 30, 2011 Meggitt (Addison), Inc. [Member]	Sep. 30, 2012 Meggitt (Addison), Inc. [Member] Customer Concentration Risk [Member]	Mar. 31, 2012 Meggitt (Addison), Inc. [Member] Customer Concentration Risk [Member]	Sep. 30, 2012 Meggitt (Addison), Inc. [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2011 Meggitt (Addison), Inc. [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2012 Meggitt (Addison), Inc. [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2011 Meggitt (Addison), Inc. [Member] Customer Concentration Risk [Member] Sales Revenue, Goods, Net [Member]	Sep. 30, 2012 United States Government and Government Prime Contractors [Member]	Sep. 30, 2011 United States Government and Government Prime Contractors [Member]	Sep. 30, 2012 United States Government and Government Prime Contractors [Member]	Sep. 30, 2011 United States Government and Government Prime Contractors [Member]	Sep. 30, 2012 United States Government and Government Prime Contractors [Member] Customer Concentration Risk [Member] Sales Revenue, Services, Net [Member]	Sep. 30, 2011 United States Government and Government Prime Contractors [Member] Customer Concentration Risk [Member] Sales Revenue, Services, Net [Member]	Sep. 30, 2012 United States Government and Government Prime Contractors [Member] Customer Concentration Risk [Member] Sales Revenue, Services, Net [Member]	Sep. 30, 2011 United States Government and Government Prime Contractors [Member] Customer Concentration Risk [Member] Sales Revenue, Services, Net [Member]	Sep. 30, 2012 United States Government and Government Prime Contractors [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]	Mar. 31, 2012 United States Government and Government Prime Contractors [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]
Concentration Risk [Line Items]
Revenue from major customer, amount	$ 728,000	$ 0					$ 47,764	$ 818,555	$ 112,984	$ 818,555							$ 229,429	$ 159,038	$ 455,490	$ 318,515							$ 326,950	$ 135,547	$ 620,586	$ 208,849
Trade accounts receivable and inventory			$ 0	$ 0							$ 14,473,809	$ 11,068,462									$ 381,836	$ 315,896
Concentration risk, percentage					20.00%	0.00%							4.00%	35.00%	3.00%	22.00%							19.00%	7.00%	13.00%	9.00%					27.00%	6.00%	17.00%	6.00%	9.00%	9.00%

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Fair Value Measurements (Tables)

6 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

Liabilities Measured At Fair Value On A Recurring Basis

Liabilities measured at fair value on a recurring basis as of September 30, 2012 are summarized below:

			Fair Value at Reporting Date Using
			Quoted Prices
			In Active		Significant
			Markets		Other		Significant
			For Identical		Observable		Unobservable
			Liabilities		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Deferred compensation under
executive employment agreements (1)	$	602,081		-		-		602,081
Note (1) Included in long term liabilities on our consolidated balance sheet as of September 30, 2012.

Liabilities measured at fair value on a recurring basis as of March 31, 2012 are summarized below:

			Fair Value at Reporting Date Using
			Quoted Prices
			In Active		Significant
			Markets		Other		Significant
			For Identical		Observable		Unobservable
			Liabilities		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Deferred compensation under
executive employment agreements (1)	$	715,107		-		-		715,107
Note (1) $152,007 included in current liabilities and $563,100 included in long term liabilities on our consolidated balance sheet as of March 31, 2012.

Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation

	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Deferred Compensation On Executive Employment Agreements
	Quarter Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Balance at beginning of period	$	589,242		614,381		715,107		1,316,372
Transfers into Level 3		-		-		-		-
Transfers out of Level 3		-		-		-		-
Total gains or losses (realized and unrealized):
Included in earnings		12,839		17,810		38,981		55,019
Included in other comprehensive income		-		-		-		-
Settlements		-		-		(152,007)		(739,200)
Balance at the end of period	$	602,081		632,191		602,081		632,191
Loss for the period included in earnings
attributable to the Level 3 liability still
held at the end of the period	$	12,839		17,810		38,981		55,019

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Stock-Based Compensation (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	0		0
Plan term			10 years
Award, expiration period			10 years
Vesting period			3 years
Maximum number of grants, per employee, per year	500,000
Unrecognized compensation costs	$ 898,902		$ 898,902
Unrecognized compensation costs, period for recognition			2 years 5 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value	719,857	209,581	719,857	209,581
Non-Employee Director Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	231,565		231,565
Cash received from settlement of share-based awards	0	0
Non-Employee Director Stock Option Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award, expiration period			3 years
Non-Employee Director Stock Option Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award, expiration period			10 years
Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	428,785		428,785
Maximum percentage of base compensation that may be contributed to purchase shares of common stock	10.00%		10.00%
Purchase of common stock under share-based compensation plan, percentage of fair market value			85.00%
Shares issued in period for share-based awards	141	523	26,836	11,497
Cash received from settlement of share-based awards	172	1,375	32,473	22,994
Stock Bonus Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	509,386		509,386
Award, expiration period			10 years
Vesting period			3 years
Shares issued in period for share-based awards	440,934	213,398	440,934	213,398
Unrecognized compensation costs	390,544		390,544
Unrecognized compensation costs, period for recognition			2 years 6 months
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value	$ 237,904	$ 245,745	$ 354,969	$ 245,745

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New Accounting Pronouncements

6 Months Ended

Sep. 30, 2012

New Accounting Pronouncements

New Accounting Pronouncements

(2)   New Accounting Pronouncements

As of September 30, 2012 there were no new accounting pronouncements expected to significantly impact our consolidated financial statements, results of operations, or cash flows.

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Stock-Based Compensation (Schedule Of Share-Based Compensation Expense) (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 599,836	$ 558,538	$ 800,677	$ 649,625
Costs Of Contract Services [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	4,774	5,430	10,301	8,877
Costs Of Product Sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	11,089	22,885	21,836	42,861
Research And Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	792	22	1,305	47
Production Engineering [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	48,041	54,379	78,596	98,027
Selling, General And Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 535,140	$ 475,822	$ 688,639	$ 499,813

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Government Grants (Narrative) (Details) (USD $)	6 Months Ended
	Sep. 30, 2012
Government Grants [Abstract]
Government grant, approved funding	$ 45,145,534
Percentage of eligible costs reimbursed by government grants	50.00%
Maximum project expenditures before DOE is provided with an updated total estimated cost	32,000,000
Threshold for government reimbursement, asset fair value	5,000
Grant reimbursements received	18,200,000
Grant funds receivable	$ 400,000

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Consolidated Balance Sheets (USD $)	Sep. 30, 2012	Mar. 31, 2012
Assets
Cash and cash equivalents	$ 6,780,447	$ 11,637,940
Short-term investments	245,987	482,909
Accounts receivable, net	4,757,740	4,929,117
Costs and estimated earnings in excess of billings on uncompleted contracts	183,665	78,376
Inventories	13,427,859	10,564,148
Facility held for sale	1,621,257	1,621,257
Prepaid expenses and other current assets	622,270	556,592
Total current assets	27,639,225	29,870,339
Property and equipment, at cost:
Land	1,683,330	1,683,330
Building	4,516,301	4,484,493
Machinery and equipment	8,048,746	7,868,481
Property, plant and equipment, gross	14,248,377	14,036,304
Less accumulated depreciation	(5,320,920)	(4,677,827)
Net property and equipment	8,927,457	9,358,477
Patent costs, net of accumulated amortization of $833,098 and $816,259	221,453	222,836
Trademark costs, net of accumulated amortization of $61,987 and $59,743	111,600	113,844
Other assets	73,043	90,105
Total assets	36,972,778	39,655,601
Liabilities and Stockholders' Equity
Accounts payable	1,549,003	2,356,513
Other current liabilities	3,496,252	2,329,101
Short-term deferred compensation under executive employment agreements		152,007
Billings in excess of costs and estimated earnings on uncompleted contracts	136,025	7,201
Total current liabilities	5,181,280	4,844,822
Long-term deferred compensation under executive employment agreements	602,081	563,100
Total liabilities	5,783,361	5,407,922
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, 50,000,000 shares authorized; 36,591,451 and 36,356,177 shares issued and outstanding	365,915	363,562
Additional paid-in capital	115,161,473	114,371,106
Accumulated deficit	(84,337,971)	(80,486,989)
Total stockholders' equity	31,189,417	34,247,679
Total liabilities and stockholders' equity	$ 36,972,778	$ 39,655,601

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Loss Per Common Share (Details)			3 Months Ended	6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Outstanding Stock Awards [Member]	Sep. 30, 2012 Outstanding Stock Awards [Member]	Sep. 30, 2011 Outstanding Stock Awards [Member]	Sep. 30, 2012 Stock Options, Out Of The Money [Member]	Sep. 30, 2011 Stock Options, Out Of The Money [Member]	Sep. 30, 2012 Stock Options, Out Of The Money [Member]	Sep. 30, 2011 Stock Options, Out Of The Money [Member]	Sep. 30, 2012 Stock Options, In The Money [Member]	Sep. 30, 2011 Stock Options, In The Money [Member]	Sep. 30, 2012 Stock Options, In The Money [Member]	Sep. 30, 2011 Stock Options, In The Money [Member]	Sep. 30, 2012 Stock Bonus Plan [Member]	Jun. 30, 2012 Stock Bonus Plan [Member]	Mar. 31, 2012 Stock Bonus Plan [Member]	Sep. 30, 2011 Stock Bonus Plan [Member]	Jun. 30, 2011 Stock Bonus Plan [Member]	Mar. 31, 2011 Stock Bonus Plan [Member]
Earnings (Loss) Per Common Share [Line Items]
Common shares issued under the Stock Bonus Plan														358,855	120,676	167,680	167,680	62,199	62,199
Antidilutive shares excluded from computation of diluted loss per share			32,681	47,430	0	3,181,758	3,423,669	3,156,758	2,430,435	163,541	919	224,330	34,474
Outstanding, Options	4,590,325	3,450,310

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Consolidated Statements Of Cash Flows (Parenthetical) (USD $)	Sep. 30, 2011
Facility Held For Sale [Abstract]
Facility, gross value	$ 2,645,793
Facility, accumulated depreciation	$ 1,024,536

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Investments (Schedule Of Amortized Cost And Unrealized Gains (Losses) On Investments) (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Schedule of Held-to-maturity Securities [Line Items]
Short-term investments, Amortized Cost	$ 245,987	$ 482,909
Long-term investments, Amortized Cost	62,146	61,855
Held-to-maturity securities, Amortized Cost	308,133	544,764
Unrealized Gain	4	11,626
Commercial Paper Corporate And Foreign Bonds [Member]
Schedule of Held-to-maturity Securities [Line Items]
Short-term investments, Amortized Cost	245,987	482,909
Unrealized Gain	4	11,626
Certificates Of Deposit [Member]
Schedule of Held-to-maturity Securities [Line Items]
Long-term investments, Amortized Cost	62,146	61,855
Unrealized Gain

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Commitments And Contingencies

6 Months Ended

Sep. 30, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

(16) Commitments and Contingencies

Employment Agreements

We have entered into employment agreements with five of our officers. Two of these agreements expired on August 22, 2012, one agreement expires November 30, 2014, one agreement expires on May 31, 2015 and one agreement expires on August 31, 2015. The aggregate future base salary payable to these five executive officers under the employment agreements over their remaining terms is $2,244,833. In addition, we have recorded a liability of $602,081 and $715,107 at September 30, 2012 and March 31, 2012, respectively, representing the potential future compensation payable under the retirement and voluntary termination provisions of the employment agreements of the Company’s current officers.   

Lease Commitments

At September 30, 2012 there were no operating leases. 

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.

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Investments (Investments Classified By Contractual Maturity Date) (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Investments [Abstract]
Three to six months	$ 245,987	$ 432,985
Six months to one year		49,924
Over one year	62,146	61,855
Held-to-maturity securities, Amortized Cost	$ 308,133	$ 544,764

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Investments (Tables)

6 Months Ended

Sep. 30, 2012

Investments [Abstract]

Schedule Of Amortized Cost And Unrealized Gains (Losses) On Investments

	September 30, 2012			March 31, 2012
	Amortized Cost		Gain (Loss)	Amortized Cost		Gain (Loss)
Short-term investments:
Commercial paper, corporate and foreign bonds	$	245,987	4		482,909	11,626
		245,987	4		482,909	11,626
Long-term investments:
Certificates of deposit (included in other assets)		62,146	-		61,855	-
	$	308,133	4		544,764	11,626

Investments Classified By Contractual Maturity Date

	September 30, 2012		March 31, 2012
Three to six months	$	245,987		432,985
Six months to one year		-		49,924
Over one year		62,146		61,855
	$	308,133		544,764

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Basis Of Presentation

6 Months Ended

Sep. 30, 2012

Basis Of Presentation [Abstract]

Basis Of Presentation

(1) The accompanying consolidated financial statements are unaudited; however, in the opinion of management, alladjustments, 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 year ended March 31, 2012.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Consolidated Balance Sheets [Abstract]
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common Stock, Shares, Outstanding	36,591,451	36,356,177

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Significant Customers

6 Months Ended

Sep. 30, 2012

Significant Customers [Abstract]

Significant Customers

(11) Significant Customers 

We have historically derived significant revenue from a few key customers. Revenue from Audi totaled $728,000 and zero for the six month periods ended September 30, 2012 and 2011, respectively, which was 20 percent and nil of our consolidated total revenue, respectively. There were no shipments to Audi during the quarters ended September 30, 2012 and 2011.

Trade accounts receivable and inventories associated with this customer totaled zero as of September 30, 2012 and March 31, 2012.

Revenue from CODA Automotive totaled $47,764 and $818,555for the quarters ended September 30, 2012 and 2011, respectively, which was 4 percent and 35 percent of our consolidated total revenue, respectively.Revenue from CODA Automotive totaled $112,984 and $818,555 for the six month periods ended September 30, 2012 and 2011, respectively, which was 3 percent and 22 percent of our consolidated total revenue, respectively.

Trade accounts receivable and inventories associated with the CODA Automotive production program totaled $14,473,809 and $11,068,462 at September 30, 2012 and March 31, 2012, respectively. 

Revenue from Meggitt (Addison), Inc. totaled $229,429 and $159,038 for the quarters ended September 30, 2012 and 2011, respectively, which was 19 percent and 7 percent of our consolidated total revenue, respectively. Revenue fromMeggitt (Addison), Inc. totaled $455,490 and $318,515 for the six month periods ended September 30, 2012 and 2011, respectively, which was 13 percent and 9 percent of our consolidated total revenue, respectively.

Trade accounts receivable and inventories associated with this customer totaled $381,836 and $315,896 at September 30, 2012 and March 31, 2012, respectively.

Revenue derived from contracts with agencies of the U.S. Government and from subcontracts with U.S. Government prime contractors totaled $326,950 and $135,547, and $620,586 and $208,849 for the quarters and six month periods ended September 30, 2012 and 2011, respectively, which was 27 percent and 6 percent, and  17 percent and 6 percent of our consolidated total revenue for the quarters and six month periods ended September 30, 2012 and 2011, respectively. Accounts receivable from government-funded contracts represented 9 percent of total accounts receivable as of September 30, 2012 and March 31, 2012.

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Document And Entity Information	6 Months Ended
	Sep. 30, 2012	Oct. 23, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013
Entity Registrant Name	UQM TECHNOLOGIES INC
Entity Central Index Key	0000315449
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		36,649,951

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Income Taxes

6 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

Income Taxes

(12)  Income Taxes

The Company currently has a full valuation allowance, 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 September 30, 2012 and 2011, we had no provisions for interest or penalties related to uncertain tax positions. 

The tax years 2007 through2011 remain open to examination by both the Internal Revenue Service of the United States and by the various state taxing authorities where we file. 

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Consolidated Statements Of Operations (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue:
Contract services	$ 350,634	$ 135,547	$ 716,013	$ 211,849
Product sales	845,470	2,198,676	2,876,519	3,437,434
Total Revenues	1,196,104	2,334,223	3,592,532	3,649,283
Operating costs and expenses:
Costs of contract services	213,459	86,123	396,535	131,693
Costs of product sales	518,754	1,227,559	1,801,617	1,909,154
Research and development	19,810	647	32,457	4,810
Production engineering	1,505,103	1,622,163	2,655,322	3,196,986
Reimbursement of costs under DOE grant	(965,564)	(1,111,034)	(1,730,200)	(2,232,670)
Selling, general and administrative	2,472,653	2,099,025	4,295,500	3,288,628
Gain on sale of long-lived asset		(3,138)		(3,138)
Total Costs and Expenses	3,764,215	3,921,345	7,451,231	6,295,463
Loss before other income	(2,568,111)	(1,587,122)	(3,858,699)	(2,646,180)
Other income:
Interest income	2,260	641	5,006	15,895
Other	2,303	296	2,711	557
Total nonoperating income	4,563	937	7,717	16,452
Net loss	$ (2,563,548)	$ (1,586,185)	$ (3,850,982)	$ (2,629,728)
Net loss per common share - basic and diluted	$ (0.07)	$ (0.04)	$ (0.11)	$ (0.07)
Weighted average number of shares of common stock outstanding - basic and diluted	36,547,878	36,304,613	36,471,063	36,263,640

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Inventories

6 Months Ended

Sep. 30, 2012

Inventories [Abstract]

Inventories

(6)    Inventories at September 30, 2012 and March 31, 2012 consist of:

	September 30, 2012		March 31, 2012
Raw materials	$	10,106,396		7,189,930
Work-in-process		428,362		710,603
Finished products		2,893,101		2,663,615
	$	13,427,859		10,564,148

Our raw material inventory is subject to obsolescence and potential impairment due to bulk purchases in excess of customers’ requirements. We periodically assess our inventories for recovery of carrying value based on available information, expectations and estimates, and adjust inventory carrying values to the lower of cost or market for estimated declines in the realizable value. There was no impairment for obsolete inventory during the six month periods ended September 30, 2012 and 2011.

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Contracts In Process

6 Months Ended

Sep. 30, 2012

Contracts In Process [Abstract]

Contracts In Process

(5)  At September 30, 2012 and March 31, 2012, the estimated period to complete contracts in process ranged from one to four months and one to ten months, respectively. We expect to collect all related accounts receivable arising therefrom within sixty days of billing. The following summarizes contracts in process:

	September 30, 2012		March 31, 2012
Costs incurred on uncompleted contracts	$	1,063,024		1,206,786
Estimated earnings		608,179		380,713
		1,671,203		1,587,499
Less billings to date		(1,623,563)		(1,516,324)
	$	47,640		71,175
Included in the accompanying balance sheets as follows:
Costs and estimated earnings in excess of billings on
uncompleted contracts	$	183,665		78,376
Billings in excess of costs and estimated earnings on
uncompleted contracts		(136,025)		(7,201)
	$	47,640		71,175

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Stock-Based Compensation (Tables)

6 Months Ended

Sep. 30, 2012

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule Of Share-Based Compensation Expense

	Quarter Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Costs of contract services	$	4,774		5,430		10,301		8,877
Costs of product sales		11,089		22,885		21,836		42,861
Research and development		792		22		1,305		47
Production engineering		48,041		54,379		78,596		98,027
Selling, general and administrative		535,140		475,822		688,639		499,813
	$	599,836		558,538		800,677		649,625

Equity Incentive Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule Of Nonvested Share Activity

	Six Months Ended September 30, 2012			Six Months Ended September 30, 2011
		Weighted-Average			Weighted-Average
	Shares Under	Grant Date		Shares Under	Grant Date
	Option	Fair Value		Option	Fair Value
Non-vested at April 1	668,722	$	1.69	475,934	$	1.73
Granted	25,000	$	0.71	-	$	-
Vested	-	$	-	-	$	-
Forfeited	(2,518)	$	1.61	(3,610)	$	1.79
Non-vested at June 30	691,204	$	1.65	472,324	$	1.73
Granted	1,075,000	$	0.89	389,588	$	1.68
Vested	(543,557)	$	1.32	(149,126)	$	1.41
Forfeited	(16,985)	$	1.89	(931)	$	1.61
Non-vested at September 30	1,205,662	$	0.88	711,855	$	1.77

Summary Of Stock Option Activity

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2012 under our 2012 Plan and its predecessor plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2012	2,782,456	$	2.81		4.0 years	$	-
Granted	25,000	$	1.03
Exercised	-	$	-			$	-
Forfeited	(2,518)	$	2.40
Outstanding at June 30, 2012	2,804,938	$	2.80		3.8 years	$	-
Granted	1,075,000	$	0.89
Exercised	-	$	-			$	-
Forfeited	(16,985)	$	2.73
Outstanding at September 30, 2012	3,862,953	$	2.27		5.2 years	$	293,500
Exercisable at September 30, 2012	2,657,290	$	2.71		3.4 years	$	49,972
Vested and expected to vest at September 30, 2012	3,804,454	$	2.28		5.2 years	$	241,164

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2011 under our 2002 Equity Incentive Plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2011	2,630,491	$	3.00		3.7 years	$	959,001
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	(6,309)	$	3.08
Outstanding at June 30, 2011	2,624,182	$	3.00		3.5 years	$	39,661
Granted	389,588	$	2.40
Exercised	-	$	-			$	-
Forfeited	(35,931)	$	3.54
Outstanding at September 30, 2011	2,977,839	$	2.92		4.1 years	$	-
Exercisable at September 30, 2011	2,265,984	$	2.94		2.9 years	$	-
Vested and expected to vest at September 30, 2011	2,937,409	$	2.92		4.0 years	$	-

Stock Bonus Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule Of Nonvested Share Activity

	Six Months Ended September 30, 2012			Six Months Ended September 30, 2011
		Weighted-Average			Weighted-Average
	Shares Under	Grant Date		Shares Under	Grant Date
	Contract	Fair Value		Contract	Fair Value
Non-vested at April 1	167,680	$	2.44	62,199	$	2.50
Granted	-	$	-	-	$	-
Vested	(47,004)	$	2.49	-	$	-
Forfeited	-	$	-	-	$	-
Non-vested at June 30	120,676	$	2.42	62,199	$	2.50
Granted	440,934	$	0.87	213,398	$	2.34
Vested	(202,755)	$	1.17	(107,917)	$	2.28
Forfeited	-	$	-	-	$	-
Non-vested at September 30	358,855	$	1.22	167,680	$	2.44

Non-Employee Director Stock Option Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary Of Stock Option Activity

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2012 under our Directors Plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2012	445,754	$	2.59		3.3 years	$	-
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	-	$	-
Outstanding at June 30, 2012	445,754	$	2.59		3.1 years	$	-
Granted	282,051	$	0.79
Exercised	-	$	-			$	-
Forfeited	(51,949)	$	2.18
Outstanding at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359
Exercisable at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359
Vested and expected to vest at September 30, 2012	675,856	$	1.87		3.5 years	$	104,359

Additional information with respect to stock option activity during the quarter and six month period ended September 30, 2011 under our Directors Plan is as follows:

				Weighted-
		Weighted-		Average
	Shares	Average		Remaining		Aggregate
	Under	Exercise		Contractual		Intrinsic
	Option	Price		Life		Value
Outstanding at April 1, 2011	329,786	$	2.86		3.1 years	$	129,642
Granted	-	$	-
Exercised	-	$	-			$	-
Forfeited	-	$	-
Outstanding at June 30, 2011	329,786	$	2.86		2.9 years	$	9,734
Granted	155,122	$	2.04
Exercised	-	$	-			$	-
Forfeited	(25,996)	$	2.33
Outstanding at September 30, 2011	458,912	$	2.61		3.7 years	$	-
Exercisable at September 30, 2011	458,912	$	2.61		3.7 years	$	-
Vested and expected to vest at September 30, 2011	458,912	$	2.61		3.7 years	$	-

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Loss Per Common Share

6 Months Ended

Sep. 30, 2012

Loss Per Common Share [Abstract]

Loss Per Common Share

(13) Loss Per Common Share

Basic earnings per share is computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed by dividing income or loss available to common stockholders by all outstanding and potentially dilutive shares during the periods presented, unless the effect is antidilutive. At September 30, 2012 and 2011, respectively, common shares issued under the Stock Bonus Plan but not yet earned totaling 358,855and167,680 were being held by the Company. For the quarters and six month periods ended September 30, 2012 and 2011, respectively,32,681 and zero, and47,430 and zero shares, were potentially includable in the calculation of diluted loss per share under the treasury stock method but were not included, because to do so would be antidilutive. At September 30, 2012 and 2011, options to purchase 4,590,325 and 3,450,310 shares of common stock, respectively, were outstanding. For the quarters and six month periods ended September 30, 2012 and 2011, respectively, options for 3,181,758 and3,423,669,  and  3,156,758and2,430,435 shares were not included in the computation of diluted loss per share because the option exercise price was greater than the average market price of the common stock. In-the-money options determined under the treasury stock method to acquire163,541 and 919, and 224,330 and 34,474 shares of common stock for the quarters and six month periods ended September 30, 2012 and 2011, respectively, were potentially includable in the calculation of diluted loss per share but were not, because to do so would be antidilutive.

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Other Current Liabilities

6 Months Ended

Sep. 30, 2012

Other Current Liabilities [Abstract]

Other Current Liabilities

(9)   Other current liabilities at September 30, 2012 and March 31, 2012 consist of:

	September 30, 2012		March 31, 2012
Accrued payroll and employee benefits	$	248,695		206,919
Accrued personal property and real estate taxes		248,500		229,470
Accrued warranty costs		151,261		154,978
Unearned revenue		1,928,486		1,705,715
Accrued royalties		48,336		31,493
Accrued import duties		813,740		-
Other		57,234		526
	$	3,496,252		2,329,101

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Facility Held For Sale

6 Months Ended

Sep. 30, 2012

Facility Held For Sale [Abstract]

Facility Held For Sale

(7)   Facility Held for Sale

The Company has listed its former facility in Frederick, Colorado for sale with a commercial real estate broker.

The facility has been reclassified as a current asset and the Company has discontinued depreciating the asset pending its sale, which is expected to occur within one year.

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Government Grants

6 Months Ended

Sep. 30, 2012

Government Grants [Abstract]

Government Grants

(8)   Government Grants

We have a $45,145,534 grant (the “Grant”) with the U.S. Department of Energy (“DOE”) under the American Recovery and Reinvestment Act. The Grant provides funds to facilitate the manufacture and deployment of electric drive vehicles, batteries and electric drive vehicle components in the United States. Pursuant to the terms of the Agreement, the DOE will reimburse 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 and other products. The period of the Grant is through January 12, 2015. We recognize government grants when it is probable that the Company will comply with the conditions attached to the grant arrangement and the grant will be received.

Funding for qualifying project costs incurred is initially limited to $32.0 million until we provide the DOE with an updated total estimated cost of the project along with evidence of firm commitments for our 50 percent share of the total estimated cost of the project no later than July 12, 2013. If all such funds have not been secured, we must submit, by such date, a funding plan to obtain the remainder of such funds, which is acceptable to the DOE. In the event we do not satisfy the foregoing contingency, the Grant may be terminated. In addition, the Grant may be terminated at any time at the convenience of the government.

The Grant is also subject to our compliance with certain reporting requirements. The American Recovery and Reinvestment Act imposes 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.

While UQM has exclusive patent ownership rights for any technology developed with Grant funds, we are required to grant the DOE a non-exclusive, non-transferable, paid-up license to use such technology.

At September 30, 2012 we had received reimbursements from the DOE under the Grant totaling $18.2 million and had grant funds receivable of $0.4 million.

The application of grant funds to eligible capital asset purchases under the Grant as of September 30, 2012 and March 31, 2012 are as follows:

	September 30, 2012
	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		7,355,957		3,677,978		3,677,979
	$	18,159,081		9,079,540		9,079,541
	March 31, 2012
	Purchase Cost		Grant Funding		Recorded Value
Land	$	896,388		448,194		448,194
Building		9,865,371		4,932,685		4,932,686
Machinery and equipment		7,163,597		3,581,799		3,581,798
	$	17,925,356		8,962,678		8,962,678

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Stockholders' Equity

6 Months Ended

Sep. 30, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

10) Stockholders’ Equity

Changes in the components of stockholders’ equity during the quarter and six month period ended September 30, 2012 were as follows: 

	Number of
	common				Additional				Total
	shares		Common		paid-in		Accumulated		stockholders’
	issued		stock		capital		deficit		equity
Balances at April 1, 2012		36,356,177	$	363,562		114,371,106		(80,486,989)		34,247,679
Issuance of common stock under
employee stock purchase plan		26,695		267		32,034		-		32,301
Purchase of treasury stock		(14,609)		(146)		(16,508)		-		(16,654)
Issuance of common stock under
stock bonus plan		47,004		470		(470)		-		-
Compensation expense from
employee and director stock
option and common stock grants		-		-		200,841		-		200,841
Net loss		-		-		-		(1,287,434)		(1,287,434)
Balances at June 30, 2012		36,415,267	$	364,153		114,587,003		(81,774,423)		33,176,733
Issuance of common stock under
employee stock purchase plan		141		1		171		-		172
Purchase of treasury stock		(26,712)		(267)		(23,509)		-		(23,776)
Issuance of common stock under
stock bonus plan		202,755		2,028		133,464		-		135,492
Compensation expense from
employee and director stock
option and common stock grants		-		-		464,344		-		464,344
Net loss		-		-		-		(2,563,548)		(2,563,548)
Balances at September 30, 2012		36,591,451	$	365,915		115,161,473		(84,337,971)		31,189,417

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Stock-Based Compensation (Summary Of Stock Option Activity) (Details) (USD $)	3 Months Ended				6 Months Ended		12 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Sep. 30, 2011	Jun. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012	Mar. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at Period End, Options	4,590,325		3,450,310		4,590,325	3,450,310
Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at Period Start, Options	2,804,938	2,782,456	2,624,182	2,630,491	2,782,456	2,630,491	2,630,491
Granted, Options	1,075,000	25,000	389,588
Forfeited, Options	(16,985)	(2,518)	(35,931)	(6,309)
Outstanding at Period End, Options	3,862,953	2,804,938	2,977,839	2,624,182	3,862,953	2,977,839	2,782,456	2,630,491
Exercisable, Options	2,657,290		2,265,984		2,657,290	2,265,984
Vested and expected to vest, Options	3,804,454		2,937,409		3,804,454	2,937,409
Outstanding at Period Start, Weighted-Average Exercise Price	$ 2.80	$ 2.81	$ 3.00	$ 3.00	$ 2.81	$ 3.00	$ 3.00
Granted, Weighted-Average Exercise Price	$ 0.89	$ 1.03	$ 2.40
Forfeited, Weighted-Average Exercise Price	$ 2.73	$ 2.40	$ 3.54	$ 3.08
Outstanding at Period End, Weighted-Average Exercise Price	$ 2.27	$ 2.80	$ 2.92	$ 3.00	$ 2.27	$ 2.92	$ 2.81	$ 3.00
Exercisable, Weighted-Average Exercise Price	$ 2.71		$ 2.94		$ 2.71	$ 2.94
Vested and expected to vest, Weighted-Average Exercise Price	$ 2.28		$ 2.92		$ 2.28	$ 2.92
Outstanding, Weighted Average Remaining Contractual Life		3 years 9 months 18 days		3 years 6 months	5 years 2 months 12 days	4 years 1 month 6 days	4 years	3 years 8 months 12 days
Exercisable, Weighted Average Remaining Contractual Life					3 years 4 months 24 days	2 years 10 months 24 days
Vested and expected to vest, Weighted Average Remaining Contractual Life					5 years 2 months 12 days	4 years
Outstanding at Period Start, Aggregate Intrinsic Value			$ 39,661	$ 959,001		$ 959,001	$ 959,001
Outstanding at Period End, Aggregate Intrinsic Value	293,500			39,661	293,500			959,001
Exercisable, Aggregate Intrinsic Value	49,972				49,972
Vested and expected to vest, Aggregate Intrinsic Value	241,164				241,164
Non-Employee Director Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at Period Start, Options	445,754	445,754	329,786	329,786	445,754	329,786	329,786
Granted, Options	282,051		155,122
Exercised, Options	(51,949)
Forfeited, Options			(25,996)
Outstanding at Period End, Options	675,856	445,754	458,912	329,786	675,856	458,912	445,754	329,786
Exercisable, Options	675,856		458,912		675,856	458,912
Vested and expected to vest, Options	675,856		458,912		675,856	458,912
Outstanding at Period Start, Weighted-Average Exercise Price	$ 2.59	$ 2.59	$ 2.86	$ 2.86	$ 2.59	$ 2.86	$ 2.86
Granted, Weighted-Average Exercise Price	$ 0.79		$ 2.04
Forfeited, Weighted-Average Exercise Price	$ 2.18		$ 2.33
Outstanding at Period End, Weighted-Average Exercise Price	$ 1.87	$ 2.59	$ 2.61	$ 2.86	$ 1.87	$ 2.61	$ 2.59	$ 2.86
Exercisable, Weighted-Average Exercise Price	$ 1.87		$ 2.61		$ 1.87	$ 2.61
Vested and expected to vest, Weighted-Average Exercise Price	$ 1.87		$ 2.61		$ 1.87	$ 2.61
Outstanding, Weighted Average Remaining Contractual Life		3 years 1 month 6 days		2 years 10 months 24 days	3 years 6 months	3 years 8 months 12 days	3 years 3 months 18 days	3 years 1 month 6 days
Exercisable, Weighted Average Remaining Contractual Life					3 years 6 months	3 years 8 months 12 days
Vested and expected to vest, Weighted Average Remaining Contractual Life					3 years 6 months	3 years 8 months 12 days
Outstanding at Period Start, Aggregate Intrinsic Value			9,734	129,642		129,642	129,642
Exercised, Aggregate Intrinsic Value
Outstanding at Period End, Aggregate Intrinsic Value	104,359			9,734	104,359			129,642
Exercisable, Aggregate Intrinsic Value	104,359				104,359
Vested and expected to vest, Aggregate Intrinsic Value	$ 104,359				$ 104,359

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Fair Value Measurements

6 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

(15) Fair Value Measurements

Liabilities measured at fair value on a recurring basis as of September 30, 2012 are summarized below:

			Fair Value at Reporting Date Using
			Quoted Prices
			In Active		Significant
			Markets		Other		Significant
			For Identical		Observable		Unobservable
			Liabilities		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Deferred compensation under
executive employment agreements (1)	$	602,081		-		-		602,081
Note (1) Included in long term liabilities on our consolidated balance sheet as of September 30, 2012.

Liabilities measured at fair value on a recurring basis as of March 31, 2012 are summarized below:

			Fair Value at Reporting Date Using
			Quoted Prices
			In Active		Significant
			Markets		Other		Significant
			For Identical		Observable		Unobservable
			Liabilities		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Deferred compensation under
executive employment agreements (1)	$	715,107		-		-		715,107
Note (1) $152,007 included in current liabilities and $563,100 included in long term liabilities on our consolidated balance sheet as of March 31, 2012.

Deferred compensation under executive employment agreements represents the future compensation potentially payable under the retirement and voluntary termination provisions of executive employment agreements. The value of the Level 3 liability in the foregoing table was determined using a discounted cash flow model with a discount rate of 14 percent based on the expected cost of capital for the Company.

A summary of the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) follows:

	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Deferred Compensation On Executive Employment Agreements
	Quarter Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Balance at beginning of period	$	589,242		614,381		715,107		1,316,372
Transfers into Level 3		-		-		-		-
Transfers out of Level 3		-		-		-		-
Total gains or losses (realized and unrealized):
Included in earnings		12,839		17,810		38,981		55,019
Included in other comprehensive income		-		-		-		-
Settlements		-		-		(152,007)		(739,200)
Balance at the end of period	$	602,081		632,191		602,081		632,191
Loss for the period included in earnings
attributable to the Level 3 liability still
held at the end of the period	$	12,839		17,810		38,981		55,019

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Inventories (Tables)

6 Months Ended

Sep. 30, 2012

Inventories [Abstract]

Schedule Of Inventories

	September 30, 2012		March 31, 2012
Raw materials	$	10,106,396		7,189,930
Work-in-process		428,362		710,603
Finished products		2,893,101		2,663,615
	$	13,427,859		10,564,148

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Commitments And Contingencies (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Commitments And Contingencies [Abstract]
Aggregate future base salary payable	$ 2,244,833
Potential future compensation payable	$ 602,081	$ 715,107

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Government Grants (Schedule Of Capital Asset Purchases, Partially Funded By Government Grants) (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Government Grants [Line Items]
Purchase Cost	$ 18,159,081	$ 17,925,356
Grant Funding	9,079,540	8,962,678
Recorded Value	9,079,541	8,962,678
Land [Member]
Government Grants [Line Items]
Purchase Cost	896,388	896,388
Grant Funding	448,194	448,194
Recorded Value	448,194	448,194
Building [Member]
Government Grants [Line Items]
Purchase Cost	9,906,736	9,865,371
Grant Funding	4,953,368	4,932,685
Recorded Value	4,953,368	4,932,686
Machinery and equipment [Member]
Government Grants [Line Items]
Purchase Cost	7,355,957	7,163,597
Grant Funding	3,677,978	3,581,799
Recorded Value	$ 3,677,979	$ 3,581,798

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Consolidated Statements Of Cash Flows (USD $)	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net loss	$ (3,850,982)	$ (2,629,728)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	662,175	575,529
Non-cash equity based compensation	800,677	649,625
Gain on sale of long-lived asset		(3,138)
Change in operating assets and liabilities:
Accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts	39,814	295,287
Inventories	(2,863,711)	(2,043,855)
Prepaid expenses and other current assets	(65,678)	(811,632)
Accounts payable and other current liabilities	359,641	(239,982)
Billings in excess of costs and estimated earnings on uncompleted contracts	128,824	(15,726)
Deferred compensation under executive employment agreements	(113,026)	(684,181)
Net cash used in operating activities	(4,902,266)	(4,907,801)
Cash flows from investing activities:
Purchases of short-term investments	(246,136)	(6,636,954)
Maturities of short-term investments	483,058	8,030,336
Increase in other long-term assets	(293)
Acquisition of property and equipment	(311,580)	(1,329,245)
Property and equipment reimbursements received from DOE under grant	143,136	1,078,743
Increase in patent and trademark costs	(15,455)	(17,981)
Cash proceeds from the sale of equipment		3,825
Net cash provided by investing activities	52,730	1,128,724
Cash flows from financing activities:
Issuance of common stock under employee stock purchase plan	32,473	22,994
Purchase of treasury stock	(40,430)	(12,376)
Net cash provided by (used in) financing activities	(7,957)	10,618
Decrease in cash and cash equivalents	(4,857,493)	(3,768,459)
Cash and cash equivalents at beginning of period	11,637,940	15,878,752
Cash and cash equivalents at end of period	6,780,447	12,110,293
Supplemental cash flow information:
Interest paid in cash during the period

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Investments

6 Months Ended

Sep. 30, 2012

Investments [Abstract]

Investments

(4)  We have an investment policy approved by the Board of Directors that governs the quality, acceptability and dollar concentration of our investments. Investments are comprised of marketable securities and consist primarily of commercial paper, asset-backed and mortgage-backed notes and bank certificates of deposits with original maturities beyond three months. All marketable securities and corporate bonds are held in our name at three major financial institutions who hold custody of the investments. All of our investments are held-to-maturity investments as we have the positive intent and ability to hold until maturity. These securities are recorded at amortized cost.

The amortized cost and unrealized gain or loss of our investments at September 30, 2012 and March 31, 2012 were:

	September 30, 2012			March 31, 2012
	Amortized Cost		Gain (Loss)	Amortized Cost		Gain (Loss)
Short-term investments:
Commercial paper, corporate and foreign bonds	$	245,987	4		482,909	11,626
		245,987	4		482,909	11,626
Long-term investments:
Certificates of deposit (included in other assets)		62,146	-		61,855	-
	$	308,133	4		544,764	11,626

The time to maturity of held-to-maturity securities were:

	September 30, 2012		March 31, 2012
Three to six months	$	245,987		432,985
Six months to one year		-		49,924
Over one year		62,146		61,855
	$	308,133		544,764

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Government Grants (Tables)

6 Months Ended

Sep. 30, 2012

Government Grants [Abstract]

Schedule Of Capital Asset Purchases, Partially Funded By Government Grants

	September 30, 2012
	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		7,355,957		3,677,978		3,677,979
	$	18,159,081		9,079,540		9,079,541
	March 31, 2012
	Purchase Cost		Grant Funding		Recorded Value
Land	$	896,388		448,194		448,194
Building		9,865,371		4,932,685		4,932,686
Machinery and equipment		7,163,597		3,581,799		3,581,798
	$	17,925,356		8,962,678		8,962,678

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Contracts In Process (Summary Of Contract In Process) (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Contracts In Process [Abstract]
Costs incurred on uncompleted contracts	$ 1,063,024	$ 1,206,786
Estimated earnings	608,179	380,713
Contracts in process, Gross	1,671,203	1,587,499
Less billings to date	(1,623,563)	(1,516,324)
Contracts in process	47,640	71,175
Costs and estimated earnings in excess of billings on uncompleted contracts	183,665	78,376
Billings in excess of costs and estimated earnings on uncompleted contracts	$ (136,025)	$ (7,201)

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Fair Value Of Financial Instruments

6 Months Ended

Sep. 30, 2012

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

(14) 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. The carrying value of investments is the amortized cost of the investments which approximates fair value. See Note 4.